EXHIBIT 10.1


 




 





STOCK AND ASSET PURCHASE AGREEMENT


 


by and among


 


TYCO ELECTRONICS GROUP S.A.,


 


COBHAM DEFENSE ELECTRONIC SYSTEMS CORPORATION


 


and


 


COBHAM PLC


 


DATED MAY 12, 2008


 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I DEFINITIONS AND TERMS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 1.1

  	
  Definitions

  	
   

  	
  1

  
	
  Section 1.2

  	
  Construction

  	
   

  	
  15

  
	
  Section 1.3

  	
  Exhibits and Seller Disclosure Letter

  	
   

  	
  16

  
	
  Section 1.4

  	
  Knowledge

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II PURCHASE AND SALE

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 2.1

  	
  Purchase and Sale of the Equity Interests

  	
   

  	
  16

  
	
  Section 2.2

  	
  Purchase and Sale of the Purchased Assets

  	
   

  	
  17

  
	
  Section 2.3

  	
  Excluded Assets of the Business

  	
   

  	
  19

  
	
  Section 2.4

  	
  Assumption of Certain Obligations of the Business

  	
   

  	
  20

  
	
  Section 2.5

  	
  Retained Liabilities of the Business

  	
   

  	
  22

  
	
  Section 2.6

  	
  Purchase Price

  	
   

  	
  23

  
	
  Section 2.7

  	
  Purchase Price Adjustment

  	
   

  	
  23

  
	
  Section 2.8

  	
  Purchase Price Allocation

  	
   

  	
  25

  
	
  Section 2.9

  	
  Closing

  	
   

  	
  26

  
	
  Section 2.10

  	
  Further Conveyances

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 3.1

  	
  Organization and Qualification

  	
   

  	
  27

  
	
  Section 3.2

  	
  Corporate Authority; Binding Effect

  	
   

  	
  27

  
	
  Section 3.3

  	
  Conveyed Entities; Capital
  Structure

  	
   

  	
  28

  
	
  Section 3.4

  	
  Non-Contravention

  	
   

  	
  28

  
	
  Section 3.5

  	
  Permits

  	
   

  	
  28

  
	
  Section 3.6

  	
  Financial Information; Undisclosed Liabilities

  	
   

  	
  29

  
	
  Section 3.7

  	
  Absence of Certain Changes

  	
   

  	
  29

  
	
  Section 3.8

  	
  No Litigation

  	
   

  	
  30

  
	
  Section 3.9

  	
  Compliance with Laws

  	
   

  	
  30

  
	
  Section 3.10

  	
  Environmental Matters

  	
   

  	
  30

  
	
  Section 3.11

  	
  Material Contracts

  	
   

  	
  30

  
	
  Section 3.12

  	
  Intellectual Property

  	
   

  	
  31

  
	
  Section 3.13

  	
  Real Property

  	
   

  	
  32

  
	
  Section 3.14

  	
  Employee Benefit Plans

  	
   

  	
  32

  
	
  Section 3.15

  	
  Labor Matters

  	
   

  	
  33

  
	
  Section 3.16

  	
  Taxes

  	
   

  	
  34

  
	
  Section 3.17

  	
  Brokers

  	
   

  	
  34

  
	
  Section 3.18

  	
  Title to Purchased Assets; Sufficiency

  	
   

  	
  34

  
	
  Section 3.19

  	
  Tangible Personal Property

  	
   

  	
  35

  
	
  Section 3.20

  	
  Illegal Payments

  	
   

  	
  35

  
	
  Section 3.21

  	
  Government Contracts

  	
   

  	
  35

  
	
  Section 3.22

  	
  Exclusivity of Representations

  	
   

  	
  36

  



 


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  ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.1

  	
  Organization and Qualification

  	
   

  	
  36

  
	
  Section 4.2

  	
  Corporate Authority

  	
   

  	
  36

  
	
  Section 4.3

  	
  Non-Contravention

  	
   

  	
  37

  
	
  Section 4.4

  	
  Permits

  	
   

  	
  37

  
	
  Section 4.5

  	
  Third-Party Approvals

  	
   

  	
  37

  
	
  Section 4.6

  	
  Financial Capability

  	
   

  	
  37

  
	
  Section 4.7

  	
  Securities Act

  	
   

  	
  37

  
	
  Section 4.8

  	
  Investigation by Purchaser; Seller’s Liability

  	
   

  	
  38

  
	
  Section 4.9

  	
  No Litigation

  	
   

  	
  38

  
	
  Section 4.10

  	
  Brokers

  	
   

  	
  38

  
	
  Section 4.11

  	
  Solvency

  	
   

  	
  38

  
	
  Section 4.12

  	
  Confidentiality Agreement

  	
   

  	
  38

  
	
  Section 4.13

  	
  Absence of Arrangements with Management

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V COVENANTS

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.1

  	
  Information and Documents

  	
   

  	
  39

  
	
  Section 5.2

  	
  Conduct of Business

  	
   

  	
  40

  
	
  Section 5.3

  	
  Efforts to Close

  	
   

  	
  42

  
	
  Section 5.4

  	
  Antitrust Laws

  	
   

  	
  42

  
	
  Section 5.5

  	
  Non-EU Business Employees and Employee Benefits

  	
   

  	
  43

  
	
  Section 5.6

  	
  EU Business Employees

  	
   

  	
  47

  
	
  Section 5.7

  	
  Wage Reporting

  	
   

  	
  48

  
	
  Section 5.8

  	
  Bulk Transfer Laws

  	
   

  	
  48

  
	
  Section 5.9

  	
  Seller’s Marks

  	
   

  	
  48

  
	
  Section 5.10

  	
  Resale or Other Exemption Certificates

  	
   

  	
  49

  
	
  Section 5.11

  	
  Post-Closing Information

  	
   

  	
  49

  
	
  Section 5.12

  	
  Indemnification of Officers and Directors

  	
   

  	
  50

  
	
  Section 5.13

  	
  Replacement of Certain Obligations

  	
   

  	
  50

  
	
  Section 5.14

  	
  Exclusive Dealing

  	
   

  	
  51

  
	
  Section 5.15

  	
  No Hire and Non-Solicitation of Employees

  	
   

  	
  52

  
	
  Section 5.16

  	
  Post-Closing Obligations for Leases

  	
   

  	
  52

  
	
  Section 5.17

  	
  Purchaser Trademarks and Trade Names

  	
   

  	
  53

  
	
  Section 5.18

  	
  Novation and Assignment of Assumed Contracts

  	
   

  	
  53

  
	
  Section 5.19

  	
  CFIUS Notification

  	
   

  	
  54

  
	
  Section 5.20

  	
  Termination of Intercompany Contracts

  	
   

  	
  55

  
	
  Section 5.21

  	
  Collection of Accounts Receivable

  	
   

  	
  55

  
	
  Section 5.22

  	
  Assumed Liabilities Covered by Tyco Electronics Insurance

  	
   

  	
  55

  
	
  Section 5.23

  	
  Delivery of Product Specifications

  	
   

  	
  55

  
	
  Section 5.24

  	
  Delivery of the Tax Opinion

  	
   

  	
  55

  
	
  Section 5.25

  	
  Cork Sublease

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI CONDITIONS PRECEDENT

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 6.1

  	
  Conditions to the Obligations of Each Party

  	
   

  	
  56

  
	
  Section 6.2

  	
  Conditions to the Obligations of Purchaser

  	
   

  	
  56

  



 


ii

















 


	
  Section 6.3

  	
  Conditions to the Obligations of Seller

  	
   

  	
  57

  
	
  Section 6.4

  	
  Frustration of Closing Conditions

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII TAX MATTERS

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 7.1

  	
  Allocation of Taxes to Seller

  	
   

  	
  58

  
	
  Section 7.2

  	
  Allocation of Taxes to Purchaser

  	
   

  	
  58

  
	
  Section 7.3

  	
  Allocation of Straddle Period Taxes

  	
   

  	
  59

  
	
  Section 7.4

  	
  Tax Returns; Payment of Taxes

  	
   

  	
  59

  
	
  Section 7.5

  	
  Tax Contests

  	
   

  	
  61

  
	
  Section 7.6

  	
  Indemnification

  	
   

  	
  62

  
	
  Section 7.7

  	
  Refunds

  	
   

  	
  64

  
	
  Section 7.8

  	
  Assistance and Cooperation

  	
   

  	
  65

  
	
  Section 7.9

  	
  Tax Records

  	
   

  	
  65

  
	
  Section 7.10

  	
  Dispute Resolution

  	
   

  	
  65

  
	
  Section 7.11

  	
  Payment

  	
   

  	
  66

  
	
  Section 7.12

  	
  Termination of Tax Allocation Agreements

  	
   

  	
  66

  
	
  Section 7.13

  	
  Adjustment

  	
   

  	
  66

  
	
  Section 7.14

  	
  Section 338(h)(10) Election

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII SURVIVAL; INDEMNIFICATION

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 8.1

  	
  Survival of Representations and Warranties

  	
   

  	
  67

  
	
  Section 8.2

  	
  Indemnification by Seller

  	
   

  	
  68

  
	
  Section 8.3

  	
  Indemnification by Purchaser

  	
   

  	
  70

  
	
  Section 8.4

  	
  Limitation on Indemnification, Mitigation

  	
   

  	
  70

  
	
  Section 8.5

  	
  Losses Net of Insurance, Etc.

  	
   

  	
  71

  
	
  Section 8.6

  	
  Indemnification Procedure

  	
   

  	
  71

  
	
  Section 8.7

  	
  Third-Party Claims

  	
   

  	
  72

  
	
  Section 8.8

  	
  Sole Remedy/Waiver

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX GUARANTEE

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 9.1

  	
  Guarantee

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X TERMINATION

  	
   

  	
  74

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 10.1

  	
  Termination

  	
   

  	
  74

  
	
  Section 10.2

  	
  Effect of Termination

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI MISCELLANEOUS

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 11.1

  	
  Notices

  	
   

  	
  75

  
	
  Section 11.2

  	
  Joinder

  	
   

  	
  76

  
	
  Section 11.3

  	
  Amendment; Waiver

  	
   

  	
  76

  
	
  Section 11.4

  	
  Assignment

  	
   

  	
  76

  
	
  Section 11.5

  	
  Entire Agreement

  	
   

  	
  76

  
	
  Section 11.6

  	
  Parties in Interest

  	
   

  	
  77

  
	
  Section 11.7

  	
  Public Disclosure

  	
   

  	
  77

  
	
  Section 11.8

  	
  Return of Information

  	
   

  	
  77

  



 


iii

















 


	
  Section 11.9

  	
  Expenses

  	
   

  	
  77

  
	
  Section 11.10

  	
  Governing Law; Jurisdiction; Waiver of Jury Trial

  	
   

  	
  77

  
	
  Section 11.11

  	
  Counterparts

  	
   

  	
  78

  
	
  Section 11.12

  	
  Headings

  	
   

  	
  78

  
	
  Section 11.13

  	
  No Strict Construction

  	
   

  	
  78

  
	
  Section 11.14

  	
  Severability

  	
   

  	
  78

  
	
  Section 11.15

  	
  Specific Performance

  	
   

  	
  79

  



 


EXHIBITS


	
  Exhibit A

  	
  Specified Accounting Policies; General Ledger Accounts

  
	
  Exhibit B

  	
  Cross License Agreement

  
	
  Exhibit C

  	
  Distribution Agreement

  
	
  Exhibit D

  	
  Supply Agreement

  
	
  Exhibit E

  	
  Transition Services Agreement

  
	
  Exhibit F

  	
  Working Capital Limit Calculations

  
	
  Exhibit G

  	
  Sublease Agreement

  



 


iv

















 


STOCK AND ASSET PURCHASE AGREEMENT


 


This Stock and Asset Purchase Agreement (this “Agreement”)
is made and entered into this 12th day of May, 2008 among Tyco Electronics
Group S.A., a company organized under the laws of Luxembourg (“Seller”),
Cobham Defense Electronic Systems Corporation a, Massachusetts corporation (“Purchaser”),
and, solely for the purposes of Article IX, Cobham plc, a company
incorporated under the laws of England and Wales (“Guarantor”).  Seller and Purchaser are herein referred to
individually as a “Party” and collectively as the “Parties.”


 


W  I  T  N  E  S
S  E  T  H:


 


WHEREAS, Seller, through certain of its Subsidiaries,
is engaged in the Business;


 


WHEREAS, Seller is the direct or indirect owner of
controlling stock, partnership or limited liability company interests in the
Equity Selling Entities as set forth in Schedule 1.1(a) of the Seller
Disclosure Letter and of controlling stock, partnership or limited
liability company interests  in the Asset
Selling Entities as set forth in Schedule 1.1(a) of the Seller
Disclosure Letter;


 


WHEREAS, the Equity Selling Entities are the record
and beneficial owners of the issued and outstanding shares of capital stock
(collectively, the “Shares”) or the partnership or limited liability
company interests (together with the Shares, the “Equity Interests”) of
the Conveyed Entities, as set forth in Schedule 3.3(b) of the
Seller Disclosure Letter;


 


WHEREAS, the Asset Selling Entities own the Purchased
Assets; and


 


WHEREAS, the Parties desire that, at the Closing, (i) Seller
shall cause the Equity Selling Entities to sell and transfer to Purchaser, and
Purchaser shall purchase from the Equity Selling Entities, all of the Equity
Interests of the Conveyed Entities owned by such Equity Selling Entities, and (ii) Seller
shall cause the Asset Selling Entities to sell and transfer to Purchaser, and
Purchaser shall purchase from the Asset Selling Entities, all of the Purchased
Assets and assume all of the Assumed Liabilities, upon the terms and conditions
set forth herein.


 


NOW, THEREFORE, in consideration of the foregoing and
the representations, warranties, covenants and agreements contained herein, the
Parties, intending to be legally bound, hereby agree as follows:


 


ARTICLE I



DEFINITIONS AND TERMS


 


Section 1.1             Definitions.  As used in this Agreement, the following
terms shall have the meanings set forth or as referenced below:


 


“Accountant” shall have the meaning set forth
in Section 2.7(b).


 

















 


“Actual Value” shall have the meaning set forth
in Section 2.7(b)(iii).


 


“ADSP” shall have the meaning set forth in Section 7.14(c).


 


“ADSP Allocation” shall have the meaning set
forth in Section 7.14(c).


 


“Affiliate” shall mean, with respect to any
Person, any other Person directly or indirectly controlling, controlled by, or
under common control with, such Person; provided, that, for the purposes
of this definition, “control” (including with correlative meanings, the terms
“controlled by” and “under common control with”), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise.


 


“Aggregate Purchase
Price” shall have the meaning set forth in Section 2.6.


 


“Agreed Claims” shall have the meaning set
forth in Section 8.6(c).


 


“Agreement” shall have the meaning set forth in
the preamble of this Agreement.


 


“Allocation” shall have the meaning set forth
in Section 2.8(a).


 


“Antitrust Laws” shall mean the Sherman Act of
1890, as amended, the Clayton Act of 1914, as amended, the Federal Trade
Commission Act of 1914, as amended, the HSR Act, and all other federal or state
Laws or Orders or Laws or Orders of any other country, in effect from time to
time that are designed or intended to prohibit, restrict or regulate actions
having the purpose or effect of monopolization or restraint of trade.


 


“Arbiter” shall have the meaning set forth in Section 2.8(b).


 


“Asset Acquisition Statement” shall have the
meaning set forth in Section 7.14(c).


 


“Asset Selling Entities Closing Cash” shall
mean the aggregate bank balance of cash, checks, money orders, marketable
securities, short-term instruments and other cash equivalents, funds in time
and demand deposits or similar accounts, and any evidence of Indebtedness
issued or guaranteed by any Governmental Authority of the Asset Selling
Entities calculated in a manner consistent with the policies, principles, practices
and methodologies set forth on Exhibit A of the Conveyed Entities
and Asset Selling Entities.  For the
avoidance of doubt, book overdrafts (outstanding checks in excess of cash
balances in bank) will be included in accounts payable.


 


“Asset Selling Entity” shall mean each entity
listed as such on Schedule 1.1(a) of the Seller Disclosure Letter,
and all such entities shall be referred to collectively as the “Asset
Selling Entities.”


 


“Assumed Contracts” shall have the meaning set
forth in Section 2.2(e).


 


2

















 


“Assumed Intercompany Receivables” shall mean
the trade receivables due and owing to the Business from Seller and its
Affiliates.


 


“Assumed Intercompany Payables” shall mean the
trade payables due and payable by the Business to Seller and its Affiliates.


 


“Assumed Liabilities” shall have the meaning
set forth in Section 2.4.


 


“Balance Sheet” shall have the meaning set
forth in Section 3.6(a).


 


“Balance Sheet Date” shall have the meaning set
forth in Section 3.6(a).


 


“Benefit Plan” shall mean each “employee
benefit plan” as defined in Section 3(3) of ERISA (whether or not
subject to ERISA) and each other bonus, stock option, equity, severance,
employment, change-in-control, fringe benefit, deferred compensation,
perquisite, tuition reimbursement and incentive plan, agreement, program or
policy, whether written or unwritten, contributed to or maintained by an Asset
Selling Entity, a Conveyed Entity or any Affiliate of either for the benefit of
any Business Employee.  For the avoidance
of doubt, for purposes hereof a “collective bargaining” plan or arrangement
shall not include any works council, national union or similar body or
organization, or the statutory obligations pertaining thereto.


 


“Bidder Representative” shall mean any of
Purchaser’s directors, officers, employees, advisors and agents to whom
Evaluation Material (as defined in the Confidentiality Agreement) was disclosed
under the Confidentiality Agreement.


 


“Business” shall mean as of the date hereof of (A) Tyco
Electronics’ M/A-COM integrated products business unit which designs,
manufactures and distributes (i) microwave, millimeter wave and radio
frequency components; (ii) microwave, millimeter wave and radio frequency
subassembly solutions; (iii) microwave, millimeter wave and radio
frequency systems and subsystems; (iv) radio frequency identification
components and systems, waveguide components and subassemblies, antenna and
antenna subassemblies and high performance cable and cable assemblies including
connectors and interconnect products that reside in the ACW product area; and (v) WANN
products for and to aerospace and defense, semiconductor, automotive and
communications equipment customers, and (B) the business conducted by
Laser Diode Incorporated.  For the avoidance of doubt, the Tyco
Electronics Core Businesses, or any portion thereof, are not included in the
Business.


 


“Business Day” shall mean any day other than a
Saturday, a Sunday or a day on which banks in New York City are authorized or
obligated by Law or executive order to close.


 


“Business Employee” shall mean and include,
without limitation, each individual listed on Schedule 1.1(b) of
the Seller Disclosure Letter who, immediately prior to the Closing:  (i) shall be (or, in the case of clause (C) below,
is scheduled to become) an employee of (1) an Asset Selling Entity or
another Affiliate of Seller and who primarily performs (or will, on commencing
work, primarily perform) services on behalf of the Business or (2) a
Conveyed Entity; and (ii) either (A) shall have been employed and at
work on the Closing Date; (B) shall have been absent on the Closing Date
because of illness or being on short-term disability


 


3

















 


(including maternity leave)
workers’ compensation, vacation, parental leave of absence, military leave of
absence or other authorized leave of absence; or (C) shall have received
an offer of employment with the Business in the ordinary course of the Business
consistent with past practice from an Asset Selling Entity, a Conveyed Entity
or another Affiliate of Seller on or prior to the Closing Date, but shall have
not yet commenced work as of the Closing Date. 
Any employee of Seller or its Affiliates who is not otherwise a Business
Employee but who is offered and accepts employment with Purchaser or its
Affiliates, pursuant to mutual agreement with Seller and otherwise in
compliance with Section 5.15 hereof, during the ninety (90) days following
the Closing Date, shall be deemed to be a Business Employee as of the date of
actual employment with Purchaser or its Affiliates.  The individuals listed on Schedule 1.1(c) of
the Seller Disclosure Letter shall not be deemed to be Business Employees.  The term “Business Employee” shall exclude
any other employee and any Former Employee, including any individual who: (i) is
on long-term disability, unauthorized leave of absence or lay-off with or
without recall rights on the Closing Date; or (ii) has been terminated or
has terminated his or her employment or retired before the Closing Date.  Notwithstanding the foregoing, Business
Employee shall include such inactive employees and Former Employees if and to
the extent that Purchaser and its Affiliates have obligations to such employees
under Transfer Regulations.


 


“CFIUS” shall mean the Committee on Foreign
Investment in the United States.


 


“Claim Certificate” shall have the meaning set
forth in Section 8.6(a).


 


“Closing” shall mean the closing of the
transactions contemplated by this Agreement pursuant to the terms and
conditions of this Agreement.


 


“Closing Cash Amount” shall have the meaning
set forth in Section 2.7(b).


 


“Closing Date” shall have the meaning set forth
in Section 2.9(a).


 


“Closing
Date Working Capital” shall have the meaning set forth in Section 2.7(b).


 


“Closing Statement” shall have the meaning set
forth in Section 2.7(a).


 


“COBRA” shall have the meaning set forth in Section 5.5(b).


 


“Code” shall mean the Internal Revenue Code of
1986, as amended from time to time.


 


“Collateral Source” shall have the meaning set
forth in Section 8.5.


 


“Confidentiality Agreement” shall mean the
Confidentiality Agreement dated as of December 12, 2007 between Seller and
an Affiliate of Purchaser.


 


“Contest” shall mean any audit, court
proceeding or other dispute with respect to any Tax matter that affects any of
the Conveyed Entities.


 


4

















 


“Contract” shall mean any written, legally
binding agreement or contract (other than purchase orders) including all
amendments thereto.


 


“Conveyed Entities” shall mean those entities
listed on Schedule 3.3(b) of the Seller Disclosure Letter, and each
of the Conveyed Entities shall be referred to individually as a “Conveyed
Entity.”


 


“Conveyed Entities Closing Cash” shall mean the
aggregate bank balance of cash, checks, money orders, marketable securities,
short-term instruments and other cash equivalents, funds in time and demand
deposits or similar accounts, and any evidence of Indebtedness issued or
guaranteed by any Governmental Authority of the Conveyed Entities calculated in
a manner consistent with the policies, principles, practices and methodologies
set forth on Exhibit A of the Conveyed Entities and Asset Selling
Entities.  For the avoidance of doubt,
book overdrafts (outstanding checks in excess of cash balances in bank) will be
included in accounts payable.


 


“Conveyed Entity Covered Person” shall have the
meaning set forth in Section 5.12.


 


“Cork Overlease” shall have the meaning set
forth in Section 5.25.


 


“Cork Sublease” shall have the meaning set
forth in Section 5.25.


 


“Cross License Agreement” shall mean the Cross
License Agreement between Seller and Purchaser to be entered into at the
Closing in substantially the form attached hereto as Exhibit B.


 


“DOJ” shall have the meaning set forth in Section 5.4(a).


 


“Disputed Item” shall have the meaning set
forth in Section 2.7(b).


 


“Distribution Agreement” shall mean the
Distributor Contract between Seller and Purchaser to be entered into at the
Closing in substantially the form attached hereto as Exhibit C.


 


“Divestiture” shall have the meaning set forth
in Section 5.4(c).


 


“Dollars” and “$” shall each mean lawful
money of the United States.


 


“Due Diligence Materials” shall mean any of the
information, including replacement and other cost estimates and financial and
other projections, made available to Purchaser, its Affiliates or the Bidder
Representatives and set forth in materials contained in any “data room”
(virtual or otherwise), in presentations by the management of the Business, in
“break-out” discussions with the management of the Business, in responses to
questions submitted by or on behalf of Purchaser, its Affiliates or the Bidder
Representatives, in materials prepared by or on behalf of Seller, or in any
other written or oral form.


 


“Effective Time” shall have the meaning set
forth in Section 2.9(a).


 


“End Date” shall have the meaning set forth in Section 10.1(b).


 


5














 


“Environmental Indemnity Claim” shall mean an
Environmental Representations Claim, an Environmental Retained Liability Claim
or an Environmental Standalone Claim, or all or any combination of the
foregoing.


 


“Environmental
Law” shall mean any Law, Order or other requirement of Law for the
protection of the environment, or for the use, transport, treatment, storage,
disposal, discharge, emission, release or threatened release of petroleum
products, asbestos, urea formaldehyde insulation, polychlorinated biphenyls or
any substance listed, classified or regulated as “hazardous” or “toxic” or any
similar term under such Environmental Law (collectively, “Hazardous Substances”).


 


“Environmental Representations Claim” shall
mean a claim for indemnification under Section 8.2(a)(i) with respect
to a breach of Section 3.10.


 


“Environmental Retained Liability Claim” shall
mean a claim for indemnification under Section 8.2(a)(iii) with
respect to Retained Liabilities arising under Environmental Laws or relating to
Hazardous Substances, including all Excluded Environmental Liabilities.


 


“Environmental Standalone Claim” shall mean a
claim for indemnification under Section 8.2(b).


 


“Equipment” shall have the meaning set forth in
Section 2.2(d).


 


“Equipment Leases” shall have the meaning set
forth in Section 2.2(d).


 


“Equity Interests” shall have the meaning set
forth in the recitals hereto.


 


“Equity Selling Entity” shall mean each entity
listed as such on Schedule 1.1(a) of the Seller Disclosure Letter,
and all such entities shall be referred to, collectively, as the “Equity
Selling Entities.”


 


“ERISA” shall mean the Employee Retirement
Income Security Act of 1974, as amended from time to time.


 


“EU Asset Selling Entity” shall mean each of
the Asset Selling Entities based in any member state of the European Union.


 


“EU Business Employee” shall mean any Business
Employee employed by an EU Asset Selling Entity or Conveyed Entity based in any
member state of the European Union, ordinarily working in any member state of
the European Union.


 


“Evaluation Material” shall have the meaning
set forth in Section 5.1(b).


 


“Excluded Assets” shall have the meaning set
forth in Section 2.3(a).


 


“Excluded Contracts” shall have the meaning set
forth in Section 2.3(a)(x).


 


6

















 


“Excluded Environmental Liabilities” shall mean
all Liabilities arising prior to, on or after the Closing under any
Environmental Law or relating to Hazardous Substances (i) in connection
with any real property or facility owned, leased or operated by the Business,
the Equity Selling Entities, the Asset Selling Entities or the Conveyed
Entities prior to the Closing Date (other than the Leased Real Property, the
Real Property, the property subject to the Sublease Agreement, the property
subject to the Cork Sublease and any of the “Premises” as defined in the
Transition Services Agreement), including the formerly operated facilities of
the Business at 63 South Avenue, Burlington, Massachusetts (Second Avenue
Industrial Park); 52 Second Avenue, Burlington, Massachusetts (N.W. Industrial
Park); 9 & 11 Executive Park Drive, Billerica, Massachusetts; 1130
Somerset Street, New Brunswick, New Jersey; 205 Liberty Street, Metuchen, New
Jersey; 85 Prodelin Way, Millstone Township, New Jersey; and 999 W. Arques
Avenue, Sunnyvale, California; (ii) arising from the disposal, or
arranging for the disposal or treatment, of Hazardous Substances to any
third-party or Superfund waste disposal, reclamation or recycling site by the
Business, any Asset Selling Entity, Equity Selling Entity or any Conveyed
Entity, to the extent treated, disposed of, or arranged for, prior to the
Closing Date; and (iii) arising out of any filing, submission, public
notification, investigation, monitoring, testing, evaluation, determination,
remediation or other obligation (including providing funding sources or other
evidence of financial assurance) required pursuant to ISRA to consummate the
transactions contemplated hereby.


 


“Excluded Records” shall have the meaning set
forth in Section 2.3(a)(xiv).


 


“FINSA” shall have the meaning set forth in Section 5.19.


 


“FTC” shall have the meaning set forth in  Section 5.4(a).


 


“Final Determination” shall mean, with respect
to any Taxes, (i) the expiration of the statute of limitations on both
assessments and refunds of such Taxes, or (ii) the final settlement of
Taxes through agreement of the parties to an administrative or judicial
proceeding or by an administrative or judicial decision from which no appeal
can be taken or the time for taking any such appeal has expired.


 


“Former Employee” shall mean any individual
(including any common law employee) who was employed by Seller in connection
with the Business but who is no longer so employed as of the Closing Date.


 


“GAAP” shall mean generally accepted accounting
principles in the United States in effect as of the date hereof.


 


“Government Contract” shall mean any Contract
entered into by Seller or its Affiliates or any Seller Entity or any Conveyed
Entity with (i) the United States government or (ii) any subcontract
which by its terms relates to a Contract to which the United States government
is a party thereto.


 


“Governmental Authority” shall mean any
transnational, domestic or foreign federal, state or local, governmental
authority, department, court, agency or official, including any political
subdivision thereof.


 


7

















 


“Gross Asset Purchase Price” shall have the
meaning set forth in Section 2.6.


 


“Gross Equity Purchase Price” shall have the
meaning set forth in Section 2.6.


 


“Gross Purchase Price” shall have the meaning
set forth in Section 2.6.


 


“Guarantor” shall have the meaning set forth in
the preamble of this Agreement.


 


“Hazardous Substance” shall have the meaning
set forth in the definition of Environmental Law.


 


“High Value” shall have the meaning set forth
in Section 2.7(b)(ii).


 


“Hours Cap” shall have the meaning set forth in
Section 5.1(a).


 


“HSR Act” shall mean the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended from time to time.


 


“Income Taxes” shall mean any Taxes based on or
measured by or with respect to gross or net income or gross receipts (including
capital gains Taxes, minimum Taxes, income Taxes collected by withholding, and
Taxes on Tax preference items, but excluding sales Taxes, value-added Taxes, or
similar Taxes), together with any interest, penalties, or additions imposed
with respect thereto.


 


“Indebtedness” of any Person shall mean
indebtedness of such Person for borrowed money. 
For the avoidance of doubt, Indebtedness shall not include any
capitalized lease obligations or any current Liabilities for trade payables or
accrued expenses incurred and payable in the ordinary course of business.


 


“Indemnified Party” shall have the meaning set
forth in Section 8.6(a).


 


“Indemnifying Party” shall have the meaning set
forth in Section 8.6(a).


 


“Intellectual Property” shall mean any of the
following:  United States or foreign (i) patents,
and applications therefore; (ii) registered and unregistered trademarks,
service marks and other indicia of origin, pending trademark and service mark
registration applications, and intent-to-use registrations or similar
reservations of marks; (iii) registered and unregistered copyrights and
applications for registration; (iv) Internet domain names, applications
and reservations therefore and uniform resource locators; and (v) trade
secrets and proprietary information not otherwise listed in (i) through (iv) above,
including unpatented inventions, invention disclosures, moral and economic
rights of authors and inventors (however denominated), confidential
information, technical data, customer lists, computer software programs,
databases, data collections and other proprietary information or material of
any type.


 


“Intellectual Property License” shall mean any
Contract pursuant to which an Asset Selling Entity is a licensee of any
Intellectual Property which is used directly and predominantly in the Business.


 


8

















 


“Inventory” shall mean any inventory, including
goods, purchased and manufactured parts, goods-in-transit, supplies,
containers, packaging materials, raw materials, work-in-progress, finished
goods, samples and other consumables.


 


“IRS” shall mean the Internal Revenue Service
of the United States of America.


 


“ISRA” shall mean the New Jersey Industrial
Site Recovery Act, N.J.S.A. 13:1k and N.J.A.C. 7:26B, as amended, and any rules or
regulations promulgated thereunder.


 


“Joint Notice” shall have the meaning set forth
in Section 5.19.


 


“Knowledge of Seller” shall have the meaning
set forth in Section 1.4.


 


“Law” shall mean any federal, state,
territorial, foreign or local law, common law, statute or ordinance or any
rule, regulation or code of any Governmental Authority.


 


“Leased Real Property” shall have the meaning
set forth in Section 2.2(a).


 


“Liabilities” shall mean any and all debts,
liabilities and obligations, whether accrued or fixed, known or unknown,
absolute or contingent, matured or unmatured or determined or determinable.


 


“Licensed Mark” shall have the meaning set
forth in Section 5.17.


 


“Liens” shall mean any lien, security interest,
mortgage, encumbrance or charge of any kind.


 


“Litigation” shall have the meaning set forth
in Section 3.8.


 


“Loss” or “Losses” shall mean any
claims, actions, causes of action, judgments, awards, out-of-pocket losses and
out-of-pocket costs or damages (including reasonable attorneys’ and consultants’
fees and expenses) and, only to the extent payable in respect of a Third-Party
Claim, incidental and consequential, punitive or exemplary damages and
diminution in value.


 


“Low Value” shall have the meaning set forth in
Section 2.7(b)(i).


 


“Lower Working Capital Limit” shall have the
meaning set forth in Section 2.7(c)(i).


 


“Material Adverse Effect” shall mean any
circumstances, change or effect having a material adverse effect on the assets,
operations, results of operations or financial condition of the Business; provided,
however, that changes or effects relating to:  (i) changes in economic or political
conditions or the financing, banking, currency or capital markets in general; (ii) changes
in Laws or Orders or interpretations thereof or changes in accounting
requirements or principles (including GAAP); (iii) changes affecting industries,
markets or geographical areas in which the Business operates; (iv) the
announcement or pendency of the transactions contemplated by this Agreement or
other communication by Purchaser or any of its Affiliates of its plans or
intentions


 


9

















 


(including in respect of
employees) with respect to the Business, including losses or threatened losses
of employees, customers, suppliers, distributors or others having relationships
with the Business; (v) the consummation of the transactions contemplated
by this Agreement or any actions by Purchaser or Seller taken pursuant to this
Agreement or in connection with the transactions contemplated hereby; (vi) conduct
by the Business prohibited by Section 5.2 for which prior written consent
from Purchaser was sought but not received; (vii) any natural disaster or
any acts of terrorism, sabotage, military action or war (whether or not
declared) or any escalation or worsening thereof, whether or not occurring or
commenced before, on or after the date of this Agreement; or (viii) any
failure by the Business to meet any internal projections or forecasts and
seasonal changes in the results of operations of the Business, in each case,
shall be deemed to not constitute a “Material Adverse Effect” and shall not be
considered in determining whether a “Material Adverse Effect” has occurred.
Notwithstanding the foregoing, it is understood that the underlying cause or
causes of any failure described in (viii) above may constitute a Material
Adverse Effect.


 


“Materials” shall have the meaning set forth in
Section 5.9.


 


“Material Contracts” shall have the meaning set
forth in Section 3.11(a).


 


“NFA Letter” shall have the meaning set forth
in Section 8.2(d)(iii).


 


“Non-EU Business Employee” shall mean any
Business Employee who is not an EU Business Employee.


 


“On-Sale” shall have the meaning set forth in Section 5.1(a).


 


“Order” shall mean any judgment, order,
injunction, decree, writ, permit or license of any Governmental Authority or any
arbiter.


 


“Parent Guarantees” shall have the meaning set
forth in Section 5.13(a).


 


“Parent LofCs” shall have the meaning set forth
in Section 5.13(a).


 


“Parties” shall have the meaning set forth in
the preamble of this Agreement.


 


“Party” shall have the meaning set forth in the
preamble of this Agreement.


 


“Payee” shall have the meaning set forth in Section 7.11.


 


“Payor” shall have the meaning set forth in Section 7.11.


 


“Performance Bonus” shall mean any cash bonus payable under a
Benefit Plan of Seller and its Affiliates to a Business Employee on the basis
of achievement of pre-determined performance of Seller, a subdivision of Seller
or such Business Employee for the 2008 fiscal year or any prior fiscal
year.  For the avoidance of doubt, any
awards, commissions, bonuses or targeted annual income incentive payments
earned by the Business’ sales force shall not be deemed a Performance Bonus.


 


10

















 


“Per-Claim Deductible” shall have the meaning
set forth in Section 8.4(a).


 


“Permit” shall mean each permit, certificate,
license, consent, approval or authorization of any Governmental Authority.


 


“Permitted
Liens” shall mean: (i) Liens for Taxes, assessments and other
governmental charges that are not yet due and payable or that may be paid after
payment thereof is due and payable without penalty or the amount or validity of
which is being contested in good faith by appropriate proceedings; (ii) Liens
arising under original purchase price conditional sales contracts and equipment
leases with third parties; (iii) easements, covenants, conditions and
restrictions, whether of record or not, which would not materially interfere
with the conduct of the Business; (iv) any zoning or other governmentally
established restrictions or encumbrances; (v) pledges or deposits to
secure obligations under workers or unemployment compensation Laws or similar
legislation or to secure public or statutory obligations; (vi) mechanic’s,
materialman’s, warehouse man’s, supplier’s, vendor’s or similar Liens arising
or incurred in the ordinary course of business securing amounts that are not
overdue for a period of more than sixty (60) days or the amount or validity of
which is being contested in good faith by appropriate proceedings; (vii) railroad
trackage agreements, utility, slope and drainage easements, right of way
easements and leases regarding signs; (viii) other Liens, if any, that do
not have or would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect; and (ix) Liens listed on Schedule
1.1(d) of the Seller Disclosure Letter.


 


“Person” shall mean an individual, a limited
liability company, a joint venture, a corporation, a company, a partnership, an
association, a trust, a division or operating group of any of the foregoing or
any other entity or organization.


 


“Pre-Closing Period Tax Returns” shall have the
meaning set forth in Section 7.4(a).


 


“Proceeding” shall have the meaning set forth
in Section 11.10(b).


 


“Purchased Assets” shall have the meaning set
forth in Section 2.2, it being understood that the Purchased Assets do not
include the Excluded Assets or the Equity Interests.


 


“Purchased Division” shall have the meaning set
forth in Section 5.9.


 


“Purchaser” shall have the meaning set forth in
the preamble of this Agreement.


 


“Purchaser Cafeteria Plan” shall have the
meaning set forth in Section 5.5(g).


 


“Purchaser Indemnitees” shall have the meaning
set forth in Section 8.2.


 


“Purchaser Savings Plan” shall have the meaning
set forth in Section 5.5(e).


 


“Purchaser’s Refunds” shall have the meaning
set forth in Section 7.7(b).


 


“Re-Opener” shall have the meaning set forth in
Section 8.2(d)(iii).


 


11

















 


“Real Property” shall have the meaning set
forth in Section 3.13(a).


 


“Real Property Leases” shall have the meaning
set forth in Section 2.2(a).


 


“Related Obligation or Contract” shall have the
meaning set forth in Section 5.13(a).


 


“Representatives” of any Person shall mean such
Person’s directors, managers, members, officers, employees, agents, advisors
and representatives (including attorneys, accountants, consultants, financial
advisors, financing sources and any representatives of such advisors or
financing sources).


 


“Retained Liabilities” shall have the meaning
set forth in Section 2.5.


 


“Section 338(h)(10) Election” shall
have the meaning set forth in Section 7.14(a).


 


“Securities Act” shall mean the Securities Act
of 1933, as amended from time to time.


 


“Seller” shall have the meaning set forth in
the preamble of this Agreement.


 


“Seller Disclosure Letter” shall have the
meaning set forth in the preamble to Article III.


 


“Seller Entities” shall mean, collectively, the
Equity Selling Entities and the Asset Selling Entities, and each of the Seller
Entities shall be referred to individually as a “Seller Entity.”


 


“Seller Indemnitees” shall have the meaning set
forth in Section 8.3.


 


“Seller Surety Bonds” shall have the meaning
set forth in Section 5.13(a).


 


“Seller’s Marks” shall have the meaning set
forth in Section 5.9.


 


“Seller’s Refunds” shall have the meaning set
forth in Section 7.7(a).


 


“Seller’s Taxes” shall have the meaning set
forth in Section 7.1.


 


“Services and Pricing Schedule” shall have the
meaning as such term is defined in the Transition Services Agreement.


 


“Shares” shall have the meaning set forth in
the recitals hereto.


 


“Solvent” shall mean, with respect to any
Person, that (i) the property of such Person, at a present fair saleable
valuation, exceeds the sum of its Liabilities (including contingent and
unliquidated Liabilities), (ii) the present fair saleable value of the
property of such Person exceeds the amount that will be required to pay such
Person’s probable Liabilities as they become absolute and matured, (iii) such
Person has adequate capital to carry on its business and (iv) such Person
does not intend to incur, or believe it will incur, Liabilities beyond its


 


12

















 


ability to pay as such
Liabilities mature.  In computing the
amount of contingent or unliquidated Liabilities at any time, such Liabilities
will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become actual or matured Liabilities.


 


“Straddle Period” shall have the meaning set
forth in Section 7.3(a).


 


“Straddle Period Returns” shall have the
meaning set forth in Section 7.4(b).


 


“Sublease Agreement” shall mean the Sublease
Agreement between M/A-COM, Inc. and Purchaser to be entered into at the
Closing in substantially the form attached hereto as Exhibit G.


 


“Subsidiary”
shall mean, with respect to any Person, (i) any corporation more than
fifty percent (50%) of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is owned by such Person directly or
indirectly through one or more Subsidiaries of such Person and (ii) any
partnership, association, joint venture or other entity in which such Person
directly or indirectly through one or more Subsidiaries of such Person has more
than a fifty percent (50%) equity interest.


 


“Supply Agreement” shall mean the Master Supply &
Purchasing Agreement between Seller and Purchaser to be entered into at the
Closing in substantially the form attached hereto as Exhibit D.


 


“Tax Claim” shall have the meaning set forth in
Section 7.6(d).


 


“Tax Indemnified Party” shall have the meaning
set forth in Section 7.6(d).


 


“Tax Indemnifying Party” shall have the meaning
set forth in Section 7.6(d).


 


“Tax Notice” shall have the meaning set forth
in Section 7.6(d).


 


“Tax Objection Notice” shall have the meaning
set forth in Section 7.6(e).


 


“Tax Opinion” shall have the meaning set forth
in Section 6.3(d).


 


“Tax Return” shall mean any report of Taxes
due, any information return with respect to Taxes, or other similar report,
statement, declaration or document required to be filed under the Code or other
Laws in respect of Taxes, including the Foreign Investment in Real Property Tax
Act, any amendment to any of the foregoing, any claim for refund of Taxes paid,
and any attachments, amendments or supplements to any of the foregoing.


 


“Taxes” shall mean any federal, state, county,
local, or foreign tax (including Transfer Taxes), charge, fee, levy, impost,
duty, or other assessment, including income, gross receipts, excise,
employment, sales, use, transfer, recording, license, payroll, franchise,
severance, documentary, stamp, occupation, windfall profits, environmental,
highway use,


 


13

















 


commercial rent, customs
duty, capital stock, paid-up capital, profits, withholding, Social Security,
single business, unemployment, disability, real property, personal property,
registration, ad valorem, value added, alternative or add-on minimum, estimated,
or other tax or governmental fee of any kind whatsoever, imposed or required to
be withheld by any Governmental Authority, including any estimated payments
relating thereto, any interest, penalties, and additions imposed thereon or
with respect thereto, and including liability for taxes of another person under
Treas. Reg. Section 1.1502-6 or similar provision of state, local or
foreign law, or as a transferee or successor, by contract or otherwise.


 


“Taxing Authority” or “Taxing Authorities”
shall mean any Governmental Authority or Authorities having jurisdiction over
the assessment, determination, collection, or other imposition of any Taxes.


 


“Taxing Authority Notice” shall have the
meaning set forth in Section 7.6(d).


 


“Third-Party Claim” shall have the meaning set
forth in Section 8.7(a).


 


“Transaction Documents” means this Agreement,
the Cross License Agreement, the Distribution Agreement, the Supply Agreement,
the Transition Services Agreement and the Sublease Agreement.


 


“Transfer Regulations” means any Law
implementing the provisions of Council Directive 2001/23/EEC dated 12 March 2001.


 


“Transfer Taxes” means all stamp, transfer,
real property transfer, recordation, grantee/grantor, documentary, sales and
use, value added, registration, occupation, privilege, or other such similar
taxes, fees and costs (including any penalties and interest) incurred in
connection with the consummation of the transactions contemplated by this
Agreement.


 


“Transferred Employee” and “Transferred
Employees” shall have the meaning set forth in Section 5.5(a).


 


“Transferred Intellectual Property” shall have
the meaning set forth in Section 2.2(g).


 


“Transition Services Agreement” shall mean the
Transition Services Agreement between Seller and Purchaser to be entered into
at the Closing in substantially the form attached hereto as Exhibit E.


 


“TSA” shall have the meaning set forth in Section 6.3(d).


 


“Tyco Electronics Cafeteria Plan” shall have
the meaning set forth in Section 5.5(g).


 


“Tyco Electronics Core Businesses” shall mean
as of the date hereof: Tyco Electronics’ (i) electronic components
business segment, which manufactures passive electronic components, including
connectors and interconnect systems, relays, electromechanical switches,
circuit protection devices, touch screens, application tools and machinery,
sensors and wires and


 


14

















 


cable, for use in the
automotive, computer, consumer electronics, communications equipment,
appliance, aerospace and defense, medical equipment, and industrial machinery
and instrumentation markets; (ii) wireless network systems business
segment which designs, manufactures and distributes land mobile radio and
broadband equipment systems and networks for and to the aerospace and defense,
public safety, transit, transportation, utility, communication equipment and
automotive markets and which designs, manufactures and distributes auto sensor
products, (iii) network solutions business segment, which supplies network
test and monitoring services, infrastructure components, including connectors,
above- and below-ground enclosures, optical switches, heat shrink tubing,
non-power related cable accessories, surge arrestors, fiber optic cabling,
copper cabling and racks for copper and fiber networks, to the
telecommunications and energy markets; and (iv) business that
manufactures, distributes, maintains and installs undersea telecommunication
systems.  For the avoidance of doubt, the
Tyco Electronics Core Businesses do not include high performance cable and
cable assemblies, including connectors and interconnect products that reside in
M/A-COM’s ACW product area.


 


“Tyco Electronics Savings Plan” shall have the
meaning set forth in Section 5.5(e).


 


“Upper Working Capital Limit” shall have the
meaning set forth in Section 2.7(c)(i).


 


“U.S. Business Employee” shall mean any
Business Employee employed by an Asset Selling Entity or Conveyed Entity, in
either case, based in the United States or ordinarily working in the United
States.


 


“WANN” shall mean the wireless adaptable
network node, a handheld radio, as contemplated by BAA 06-26 issued for the
Defense Advanced Research Projects Agency, that is currently being developed by
Tyco Electronics’ M/A-COM integrated products business unit under contract FA8750-07-C-005
from the Contracting Office of the Air Force.


 


“Working Capital” shall mean the current assets
of the Business (excluding Conveyed Entities Closing Cash, Asset Selling
Entities Closing Cash and deferred income tax assets) less the current liabilities
of the Business (excluding interest obligations but including other contractual
payment obligations related to the License Agreement, dated as of October 10,
2001, by and between M/A-COM, Inc. and Xemod Incorporated, deferred income
tax liabilities and, for the avoidance of doubt, accrued income tax
liabilities), in each case included in the Purchased Assets and Assumed
Liabilities or owned or owing by the Conveyed Entities, taken as a whole and
determined in a manner consistent with the policies, principles, practices and
methodologies set forth on Exhibit A.  The calculations of the Lower Working Capital
Limit and the Upper Working Capital Limit have been included in Exhibit F.


 


Section 1.2             Construction.  In this Agreement, unless the context otherwise
requires:


 


(a)           any reference in this Agreement to “writing”
or comparable expressions includes a reference to facsimile transmission or
comparable means of communication (but excluding e-mail communications);


 


15














 


(b)   the phrases “delivered” or “made
available”, when used in this Agreement, shall mean that the information
referred to has been physically or electronically delivered to the relevant
parties including, in the case of “made available” to Purchaser, material that
has been posted in the “data room” (virtual or otherwise) established by
Seller;


 


(c)   words expressed in the
singular number shall include the plural and vice versa, and words expressed in
the masculine shall include the feminine and neuter genders and vice versa;


 


(d)   references to Articles,
Sections, Exhibits, Schedules and Recitals are references to articles,
sections, exhibits, schedules and recitals of this Agreement;


 


(e)   references to “day” or “days”
are to calendar days;


 


(f)    references to “the date
hereof” shall mean as of the date of this Agreement;


 


(g)   unless expressly indicated
otherwise, the words “hereof”, “herein”, “hereto” and “hereunder”, and words of
similar import, when used in this Agreement, shall refer to this Agreement as a
whole and not to any provision of this Agreement;


 


(h)   references to this “Agreement”
or any other agreement or document shall be construed as references to this
Agreement or, as the case may be, such other agreement or document as the same
may have been, or may from time to time be, amended, varied, novated or
supplemented; and


 


(i)    “include”, “includes”, and “including”
are deemed to be followed by “without limitation” whether or not they are in
fact followed by such words or words of similar import.


 


Section 1.3             Exhibits
and Seller Disclosure Letter.  The
Exhibits to this Agreement and the Seller Disclosure Letter are incorporated
into and form an integral part of this Agreement.  If an Exhibit is a form of agreement,
such agreement, when executed and delivered by the parties thereto, shall
constitute a document independent of this Agreement.


 


Section 1.4             Knowledge.  Where any representation or warranty or other
provision contained in this Agreement is expressly qualified by reference to
the “Knowledge of Seller”, such knowledge shall mean to the actual knowledge
(as distinguished from constructive or imputed knowledge) of those individuals
listed on Schedule 1.4 of the Seller Disclosure Letter, after due
inquiry.


 


ARTICLE II



PURCHASE AND SALE


 


Section 2.1             Purchase
and Sale of the Equity Interests. 
Upon the terms and subject to the conditions set forth herein, at the
Closing, Seller shall cause the Equity Selling Entities to sell to Purchaser,
and Purchaser agrees to purchase from the Equity Selling Entities, free and
clear of all Liens other than Permitted Liens, the Equity Interests.  The certificates, if any, representing the
Equity Interests shall be duly endorsed in blank, or accompanied either by 


 


16

















 


stock powers duly executed in
blank by the respective Equity Selling Entities or by such other instruments of
transfer as are reasonably acceptable to Purchaser.


 


Section 2.2             Purchase
and Sale of the Purchased Assets. 
Upon the terms and subject to the conditions set forth herein, at the
Closing, Seller shall cause each Asset Selling Entity to sell, convey, assign
and transfer to Purchaser, and Purchaser shall purchase, acquire and accept
from each Asset Selling Entity, free and clear of all Liens other than
Permitted Liens, all of such Asset Selling Entity’s right, title and interest
in the following assets, properties and rights owned or held by such Asset
Selling Entity (collectively, the “Purchased Assets”), as the same may
exist on the Closing Date:


 


(a)   the real property leasehold
interests of the Asset Selling Entities to be assigned to Purchaser, including (x) any
prepaid rent, security deposits and options to purchase in connection therewith
and (y) the Asset Selling Entities’ right, title or interest in and to any
fixtures, structures or improvements appurtenant to such real property
(collectively, the “Leased Real Property”, with the leases relating to
such Leased Real Property being collectively referred to herein as the “Real
Property Leases”), as set forth on Schedule 2.2(a) of the
Seller Disclosure Letter;


 


(b)   the Real Property set forth
on Schedule 2.2(b) of the Seller Disclosure Letter;


 


(c)   all Asset Selling Entities
Closing Cash, if any, to the extent that it is held in bank accounts dedicated
to the Business, net of withholding or similar Taxes, in all countries (other
than in the United States, the United Kingdom and Ireland) which levy such
Taxes;


 


(d)   all personal property and
interests therein, including all the equipment, vehicles, machinery, tools,
spare parts, furniture and other tangible personal property owned, leased or
licensed by the Asset Selling Entities and used primarily in the Business
(collectively, the “Equipment”, with the leases relating to any
Equipment so leased being referred to herein as the “Equipment Leases”);


 


(e)   all other Contracts relating
primarily to the Business (other than the Real Property Leases, Equipment
Leases and Contracts relating to the Excluded Assets) (collectively, the “Assumed
Contracts”) and all outstanding purchase orders relating directly and
predominantly to the Business (other than such purchase orders relating to the
Excluded Assets);


 


(f)    all Inventory used
primarily in the Business;


 


(g)   the registered trademarks
and copyrights and the patents and any applications for the foregoing set forth
on Schedule 2.2(g) of the Seller Disclosure Letter and all other
Intellectual Property used exclusively in the Business (collectively, the “Transferred
Intellectual Property”);


 


(h)   all transferable Permits
owned, utilized, held or maintained by or licensed to the Asset Selling
Entities (subject to the terms of such Permits) relating primarily to the
Business;


 


17

















 


(i)    the computer software
programs and source codes owned, used or leased by, or licensed to, the Asset
Selling Entities that are set forth on Schedule 2.2(i) of the
Seller Disclosure Letter;


 


(j)    all customer, vendor,
supplier, contractor, and service-provider lists to the extent relating directly
and predominantly to the Business, and all files, documents and records
(including billing, payment, dispute and credit information and similar data)
to the extent relating directly and predominantly to customers, vendors,
suppliers, contractors or service-providers of the Business, and other business
and financial records, files, books and documents (whether in hard copy or
computer format) to the extent relating directly and predominantly to the
Business;


 


(k)   all accounts and notes
receivable of the Business, including Assumed Intercompany Receivables and all
loans and other advances owing to Seller or any of its Affiliates by any
Business Employee who becomes a Transferred Employee;


 


(l)    all prepaid expenses and
deposits and refunds of the Business (other than prepaid insurance) received
after the Closing Date;


 


(m)  all claims, causes of action,
defenses and rights of offset or counterclaim (at any time or in any manner
arising or existing, whether choate or inchoate, known or unknown, contingent
or noncontingent) relating to any of the Purchased Assets or Assumed
Liabilities to be conveyed to and/or assumed by Purchaser as of the Closing
Date;


 


(n)   the goodwill of the
Business;


 


(o)   all advertising, marketing,
sales and promotional materials relating directly and predominantly to the
Business;


 


(p)   (i) all property and
casualty insurance proceeds received or receivable in connection with the
damage or complete destruction of any of the Purchased Assets that would have
been included in the Purchased Assets but for such damage or complete
destruction, in each case net of any deductible and the cost of repair or
replacement and related administrative costs and (ii) as provided in Section 5.22
of this Agreement;


 


(q)   all rights and claims under
any and all transferable warranties extended by suppliers, vendors,
contractors, manufacturers and licensors in relation to any of the Equipment,
the Transferred Intellectual Property and the software and hardware assets
described in this Section 2.2;


 


(r)    all collective bargaining,
union and other similar Contracts covering the Business Employees, but only to
the extent such Contracts cover Business Employees;


 


(s)   all other assets set forth
on Schedule 2.2(s) of the Seller Disclosure Letter; and


 


(t)    to the extent permitted by
applicable Law, copies of the personnel records (including all human resources
and other records) of each Asset Selling Entity relating to the Transferred
Employees of such Asset Selling Entity.


 


18

















 


Section 2.3             Excluded
Assets of the Business.  (a) Notwithstanding
any provision in this Agreement to the contrary, Purchaser is not purchasing
from any of the Asset Selling Entities any of the following (collectively, the “Excluded
Assets”), and shall acquire no right to or interest in any Excluded Assets
under this Agreement or as a result of the transactions contemplated hereby:


 


(i)          Asset Selling Entities Closing Cash to
the extent that it is held in bank accounts not dedicated to the Business;


 


(ii)         all intercompany receivables of the
Business payable by Seller or a Seller Affiliate, other than Assumed
Intercompany Receivables;


 


(iii)        the corporate books and records of
Seller and each of its Affiliates;


 


(iv)       all current and prior insurance policies
of Seller and its Affiliates and all rights of any nature with respect thereto,
including all insurance proceeds received or receivable thereunder (other than
any such amounts included in the Purchased Assets pursuant to Section 2.2(p))
and rights to assert claims with respect to any such insurance recoveries;


 


(v)        the assets of any Benefit Plan that is
contributed to or maintained for the benefit of any Business Employees of any
Asset Selling Entity;


 


(vi)       the “Tyco” and “Tyco Electronics” names,
marks and logos, and any other item set forth on Schedule 5.9 of the
Seller Disclosure Letter and any Intellectual Property relating thereto;


 


(vii)      all loans and other advances owing to
Seller or any of its Affiliates by each Business Employee who does not become a
Transferred Employee;


 


(viii)     the Tax records (including Tax Returns and
supporting workpapers) covering any period ending, or any transaction of any
Asset Selling Entity occurring ,on or 
prior to the Closing Date;


 


(ix)        the original personnel records (including
all human resources and other records) of each Asset Selling Entity relating to
the Transferred Employees of such Asset Selling Entity;


 


(x)         all of the rights and interests of any
Asset Selling Entity in and to the Contracts specified in Schedule 2.3(a)(x) of
the Seller Disclosure Letter (the “Excluded Contracts”);


 


(xi)        any assets and associated claims arising
out of the Retained Liabilities;


 


(xii)       all claims, causes of action, defenses
and rights of offset or counterclaim (at any time or in any manner arising or
existing, whether choate or inchoate, known or unknown, contingent or
noncontingent) not included in the Purchased Assets under Section 2.2(m);


 


19

















 


(xiii)      all of the rights and interests of Seller
and its Affiliates (including the Seller Entities) in and to all correspondence
and documents, including the confidentiality agreements entered into by
Purchaser or any of its Affiliates, in connection with the sale of the
Business;


 


(xiv)      all of the rights and interests of the
Asset Selling Entities in all information, files, records, data, plans,
contracts and recorded knowledge related to or used in connection with the
Business, to the extent that any of the foregoing: (i) relate directly and
predominantly to the Excluded Assets; (ii) relate to the Excluded Assets
and can be easily separated from the Purchased Assets; or (iii) are
comprised predominantly of written materials that a Seller Entity is required
by Law to retain and with respect to which Seller shall have provided (or
caused to be provided) a copy to Purchaser (collectively, the “Excluded
Records”);


 


(xv)       any legal or beneficial interest in the
share capital of the entities and other assets listed on Schedule 2.3(a)(xv)
of the Seller Disclosure Letter, notwithstanding the fact that such entities or
assets are related directly and predominantly to the Business;


 


(xvi)      any legal or beneficial interest in the
Internet websites listed on Schedule 2.3(a)(xvi) of the Seller
Disclosure Letter, notwithstanding the fact that such sites are related
directly and predominantly to the Business;


 


(xvii)     all Seller’s Refunds or credits of Taxes
due to Seller or its Affiliates pursuant to Section 7.7;


 


(xviii)    all other assets set forth on Schedule
2.3(a)(xviii) of the Seller Disclosure Letter;


 


(xix)      any Intellectual Property owned by an
Asset Selling Entity and not exclusively used in the Business (including all
Seller Patents and Seller Information as such terms are defined in the Cross
License Agreement, but excluding items set forth on Schedule 2.2(g) of
the Seller Disclosure Letter); and


 


(xx)       any computer software programs and source
codes, other than such computer software programs and source codes set forth on
Schedule 2.2(i).


 


(b)   After the Closing Date,
Purchaser shall take all actions (or shall cause its Affiliates to take all
actions) reasonably requested by the Seller Entities to effect the provisions
of this Section 2.3, including the prompt return of any Excluded Assets
and any other assets that are not Purchased Assets that are owned by any Asset
Selling Entity and are transferred to Purchaser inadvertently at the Closing.


 


Section 2.4             Assumption
of Certain Obligations of the Business. 
Upon the terms and subject to the conditions of this Agreement,
Purchaser agrees, effective at the Closing, to assume and to satisfy and
discharge all Liabilities to the extent relating to the ownership, use or
operation of the Purchased Assets or the Business, whether arising prior to, at
or after the Closing, and whether accrued or fixed, known or unknown, absolute
or contingent, matured or unmatured or determined or determinable as of the
Closing Date, other than the Retained 


 


20

















 


Liabilities
(all of the foregoing Liabilities to be so assumed, satisfied or discharged
being herein collectively called the “Assumed Liabilities”).  Assumed Liabilities shall include the
following:


 


(a)   all lawsuits to the extent
resulting from the conduct of the Business or the ownership of the Equity
Interests or the Purchased Assets prior to, at or after the Closing, including
lawsuits and claims relating to any alleged Intellectual Property infringement;


 


(b)   all Liabilities, including
all lawsuits, arising from the design, construction, testing, marketing,
service, operation or sale of the products and services of the Business prior
to, at or after the Closing, including warranty obligations and irrespective of
any legal theory asserted, other than lawsuits arising under Environmental
Laws, to the extent resulting from the conduct of the Business or the ownership
of the Equity Interests or the Purchased Assets prior to or at the Closing;


 


(c)   all Liabilities arising
prior to, at or after the Closing under the Real Property Leases, the Equipment
Leases and the Assumed Contracts (including all purchase orders in respect
thereof) included in the Purchased Assets;


 


(d)   all accounts payable and
other accrued expenses of the Business, including accrued Taxes (other than
accrued Income Taxes) and Assumed Intercompany Payables (other than accounts
payable of the Business described in Section 2.5(a)(iii)), and all
Liabilities to customers under purchase orders for products of the Business
which at the Closing have not yet been provided;


 


(e)   all Liabilities set forth in
Schedule 2.4(e) of the Seller Disclosure Letter;


 


(f)    all Liabilities arising
prior to, at or after the Closing under Environmental Law or relating to
Hazardous Substances, in each case, arising in connection with the ownership,
leasing, operation or use of the Purchased Assets, the Business, the Equity
Interests, the Conveyed Entities, the property subject to the Sublease
Agreement, the property subject to the Cork Sublease and any of the “Premises”
as defined in the Transition Services Agreement (other than any ownership,
leasing, operation or use by Seller), including, without limitation,
Liabilities relating to lease restoration, lease termination and
asbestos-related asset retirement obligations;


 


(g)   all Liabilities with respect
to Business Employees (including Liabilities arising under any employment,
consulting, severance or similar agreement or other obligation), except to the
extent provided otherwise in Sections 5.5 and 5.6 and other than Liabilities of
the type described in Sections 2.5(a)(vii) through 2.5(a)(xii), regardless
of whether any such Liability is that of an Asset Selling Entity or a Conveyed
Entity, and other than Liabilities relating to any Litigation brought by or on
behalf of any Former Employee or Business Employee who does not become a
Transferred Employee (or, in each case, any beneficiary thereof); provided
that no provision of this Section 2.4(g) or Sections 2.5(a)(vii) through
2.5(a)(xii) shall be interpreted to relieve Purchaser of any obligation to
Former Employees or Business Employees imposed by Transfer Regulations; and provided,
further, that, for the avoidance of doubt, Litigation shall not include
any legal proceeding or claim related to workers’ compensation or equal
opportunity and brought by or on behalf of any Former Employee or Business
Employee who does not become a Transferred Employee (or, in each case, any 


 


21

















 


beneficiary thereof), the Equal Employment Opportunity Commission or
the Office of Federal Contract Compliance; and


 


(h)   all Liabilities for or with
respect to Taxes for which Purchaser bears responsibility pursuant to Article VII.


 


Section 2.5             Retained
Liabilities of the Business.  (a) Notwithstanding
any provision in this Agreement, the Asset Selling Entities (and, in the case
of Section 2.5(a)(iv) and Section 2.5(a)(vi) below, the
Equity Selling Entities) shall retain and be responsible only for the following
liabilities relating to the Business (collectively, the “Retained Liabilities”):


 


(i)          Liabilities for which any Asset
Selling Entity expressly has responsibility pursuant to the terms of this
Agreement;


 


(ii)         Liabilities solely related to the
Excluded Assets;


 


(iii)        intercompany payables of the Business
owed to Seller or a Seller Affiliate other than Assumed Intercompany Payables;


 


(iv)       Excluded
Environmental Liabilities;


 


(v)        any Liabilities of any Asset Selling
Entity to pay any Indebtedness incurred prior to the Closing Date, subject to
the provisions of Section 5.13;


 


(vi)       all Liabilities for or with respect to
Taxes for which Seller or the Seller Entities bear responsibility pursuant to Article VII;


 


(vii)      all Liabilities for Performance Bonuses,
all Liabilities arising under any retention, change in control or similar agreement
or obligation entered into or otherwise agreed upon with a Business Employee
prior to the Closing and all Liabilities arising under any deferred
compensation arrangement of Seller and its Affiliates;


 


(viii)     all Liabilities for any claim by a Business Employee under any
Seller Benefit Plan that is a medical, dental or vision plan, incurred prior to
the Closing, regardless of when such claim is reported by such Business
Employee;


 


(ix)        all Liabilities arising under post-retirement health and
post-retirement life insurance plans of Seller and its Affiliates and all
Liabilities under stock option and other equity-based compensation plans of
Seller and its Affiliates;


 


(x)         all
Liabilities arising under the Tyco International (US) Inc. Retirement Savings and
Investment Plan I, as amended and restated as of August 3, 2002, relating
to the special pension supplement credited as a transitional benefit on behalf
of eligible Business Employees who were participants in the AMP Incorporated
Pension Plan;


 


(xi)        all Liabilities arising under the Tyco Electronics Pension
Plan Part II - AMP dated as of October 1, 2000;


 


22

















 


(xii)       (A) all
Liabilities with respect to U.S. Business Employees who do not become
Transferred Employees; and (B) all Liabilities with respect to Business
Employees who are not U.S. Business Employees who do not become Transferred
Employees, unless such Liabilities arise pursuant to Law (e.g.,
if applicable, statutorily required severance pay); provided that, for
the avoidance of doubt, any Liability arising under any legal proceeding or
claim related to workers’ compensation or equal opportunity and brought by or
on behalf of any Former Employee or Business Employee (or any beneficiary
thereof), the Equal Employment Opportunity Commission or the Office of Federal
Contract Compliance shall be an Assumed Liability; and


 


(xiii)      all Liabilities set forth in Schedule
2.5(a)(xiii) of the Seller Disclosure Letter.


 


Section 2.6             Purchase
Price.  In consideration of the sale
and transfer of the Equity Interests and the Purchased Assets, Purchaser agrees
to purchase from the Equity Selling Entities the Equity Interests for an
aggregate purchase price of Three Million Five Hundred Thousand Dollars
($3,500,000) (the “Gross Equity Purchase Price”) and to purchase from
the Asset Selling Entities the Purchased Assets for an aggregate purchase price
of Four Hundred Twenty-One Million Five Hundred Thousand Dollars ($421,500,000)
(the “Gross Asset Purchase Price”, and together with the Gross Equity
Purchase Price, the “Gross Purchase Price”), subject to adjustment
pursuant to Section 2.7 (as so adjusted, the “Aggregate Purchase Price”).  The Gross Purchase Price shall be allocated
as described in Section 2.8(a).  At
the Closing, Purchaser shall deliver to Seller the Gross Purchase Price by wire
transfer of immediately available funds to the account or accounts previously
notified by Seller in writing to Purchaser.


 


Section 2.7             Purchase
Price Adjustment  (a) Promptly
after the Closing Date, and in any event not later than thirty (30) days
following the Closing Date, Seller shall prepare and deliver to Purchaser for
its review a statement (the “Closing Statement”) of (i) the Working
Capital at the Closing Date and (ii) the amount of Conveyed Entities
Closing Cash and Asset Selling Entities Closing Cash (to the extent
constituting a Purchased Asset).  The
Closing Statement shall be prepared in a manner consistent with Exhibit A.  Purchaser shall give Seller and its
Representatives access, to the premises, books and records, and appropriate
personnel of the Business, the Conveyed Entities and Purchaser for purposes of
the preparation of the Closing Statement in accordance with this Section 2.7(a) (and
during the periods contemplated by Section 2.7(b)).  Purchaser shall instruct its employees
(including the Transferred Employees) and Representatives to cooperate with,
and promptly and completely respond to all reasonable requests and inquiries
of, Seller and its Representatives, and, upon execution of a customary access
letter if required by Purchaser’s outside accountants, Seller and its
Representatives shall have reasonable access, upon reasonable notice, to all
relevant work papers, schedules, memoranda and other documents prepared by
Purchaser or its Representatives (including its outside accountants) to the
extent such materials have been prepared by Purchaser or its Representatives
and relate to the calculation of Working Capital and/or the Conveyed Entities
Closing Cash and the Asset Selling Entities Closing Cash in any respect.


 


(b)   Purchaser and Purchaser’s
accountants and financial and other advisors may make reasonable inquiries of
Seller and/or Seller’s accountants regarding questions concerning or
disagreements with the Closing Statement arising in the course of Purchaser’s
review.  


 


23

















 


Purchaser shall complete its review of the Closing Statement within
thirty (30) days after the delivery thereof to Purchaser.  Promptly following completion of its review
(but in no event later than ten (10) Business Days following the
conclusion of the thirty (30) day period), Purchaser shall submit to Seller a
letter regarding its concurrence or disagreement with the accuracy of the
Closing Statement; provided that if Purchaser submits a letter of
disagreement such letter will specify (i) the items of the Closing
Statement with which Purchaser disagrees, (ii) the adjustments that
Purchaser proposes to be made to the Closing Statement and (iii) the
specific amount of such disagreement and all supporting documentation and
calculations; and provided, further, that (i) Purchaser may
only disagree with the Closing Statement to the extent Purchaser claims Seller
did not prepare the Closing Statement in a manner consistent with the policies
and principles set forth on Exhibit A, and (ii) Purchaser may
only disagree with the Closing Statement if Purchaser’s proposed calculation
will result in an adjustment to the Gross Purchase Price.  Unless Purchaser delivers a letter
disagreeing with the accuracy of the Closing Statement within ten (10) Business
Days following the conclusion of such thirty (30) day period, the Closing
Statement shall be final and binding upon the Parties.  Following delivery of such a letter so
disagreeing, Seller and Purchaser shall attempt in good faith to resolve
promptly any disagreement as to the computation of any item in the Closing
Statement and any items as to which there is no disagreement shall be deemed
agreed.  If a resolution of such
disagreement has not been effected within fifteen (15) days (or longer, as
mutually agreed by the Parties) after delivery of such letter, then Seller and
Purchaser shall submit any disagreement regarding the Closing Statement (a “Disputed
Item”) to Ernst & Young L.L.P. (the “Accountant”) for
determination.  The determination of the
Accountant with respect to any Disputed Item shall be completed within thirty
(30) days after the appointment of the Accountant and shall be determined in
accordance with this Agreement and be final and binding upon Seller and
Purchaser.  The Accountant shall adopt a
position within the range of positions submitted by Seller and Purchaser with
respect to any Disputed Item.  The
Accountant’s determination regarding any Disputed Item shall be based solely on
whether Seller included such Disputed Item in or excluded such Disputed Item
from the Closing Statement or calculated such Disputed Item, as the case may
be, in a manner consistent with the policies and principles set forth on Exhibit A.  Working Capital as finally determined in
accordance herewith shall be referred to as “Closing Date Working Capital.”  The Conveyed Entities Closing Cash and the
Asset Selling Entities Closing Cash as finally determined in accordance herewith
shall be referred to as the “Closing Cash Amount.”  The fees, costs, and expenses of the
Accountant shall be shared as follows:


 


(i)          if the Accountant resolves all of the
Disputed Items in favor of Purchaser’s position (the Closing Date Working Capital
and/or the Closing Cash Amount, as the case may be, so determined is referred
to herein as the “Low Value”), then Seller shall be obligated to pay for
all of the fees and expenses of the Accountant;


 


(ii)         if the Accountant resolves all of the
Disputed Items in favor of Seller’s position (the Closing Date Working Capital
and/or the Closing Cash Amount, as the case may be, so determined is referred
to herein as the “High Value”), then Purchaser shall be obligated to pay
for all of the fees and expenses of the Accountant; and


 


(iii)        if the Accountant neither resolves all
of the Disputed Items in favor of Purchaser’s position nor resolves all of the
Disputed Items in favor of Seller’s position (the Closing Date Working Capital
and/or the Closing Cash Amount, as the case may 


 


24

















 


be, so determined is referred
to herein as the “Actual Value”), Seller shall be responsible for such
fraction of the fees and expenses of the Accountant for the Closing Date
Working Capital and/or the Closing Cash Amount, as the case may be, equal to (x) the
difference between the High Value and the Actual Value over (y) the
difference between the High Value and the Low Value, for the Closing Date
Working Capital and/or the Closing Cash Amount, as the case may be, and
Purchaser shall be responsible for the remainder of the fees and expenses of
the Accountant.


 


(c)   If Closing Date Working
Capital:


 


(i)          is equal to or greater than One
Hundred Million Seven Hundred Thousand 
Dollars ($100,700,000) (the “Lower Working Capital Limit”) and is
equal to or less than One Hundred Two Million Seven Hundred Thousand Dollars
($102,700,000) (the “Upper Working Capital Limit”), then no adjustments
will be made to the Gross Purchase Price in respect of Working Capital;


 


(ii)         exceeds the Upper Working Capital
Limit, then Purchaser shall be obligated to pay to Seller the amount by which
Closing Date Working Capital exceeds the Upper Working Capital Limit; or


 


(iii)        is less than the Lower Working Capital
Limit, then Seller shall be obligated to repay to Purchaser the amount by which
the Lower Working Capital Limit exceeds Closing Date Working Capital.


 


(d)   Purchaser shall be obligated
to pay to Seller the Closing Cash Amount, if any.


 


(e)   Any payments to be made
pursuant to Sections 2.7(c) and (d) shall be made by wire transfer of
immediately available funds to the account designated in writing by Purchaser
or Seller, as the case may be, within five (5) Business Days after the
determination of the Closing Date Working Capital and the Closing Cash Amount,
as the case may be.  For the avoidance of
doubt, if either the Closing Date Working Capital or the Closing Cash Amount,
as the case may be, is determined before the other, Purchaser or Seller, as the
case may be, shall pay the other party any amounts owed pursuant to Sections
2.7(c) and (d) in respect of such determination within five (5) Business
Days after such determination (notwithstanding that the other has not yet been
determined).  Any payment made pursuant
to Sections 2.7(c) and (d) shall be made with interest (such interest
to be calculated on the basis of a year of three-hundred sixty (360) days and
the actual number of days elapsed) on such amount from (i) the date of the
delivery of a letter of disagreement, if there is a disagreement or (ii) 45
days from the Closing if there is no such letter of disagreement, to the date
of such payment at a rate equal to eight percent (8%) per annum.


 


Section 2.8             Purchase
Price Allocation.  (a) Within
ninety (90) days after the Closing Date, Purchaser shall prepare and
deliver to Seller a statement (the “Allocation”), allocating the Gross
Purchase Price (plus Assumed Liabilities, to the extent properly taken into
account under Section 1060 of the Code) among the Equity Interests and the
Purchased Assets in accordance with Section 1060 of the Code.  Seller shall notify Purchaser of any
disagreement within five (5) Business Days of Seller’s receipt of the
proposed Allocation. Any 


 


25

















 


dispute regarding
the Allocation shall be resolved pursuant to the procedures set forth below in Section 2.8(b).  Each of Seller and the Seller Entities on the
one hand and Purchaser on the other hand shall (x) be bound by the
Allocation for purposes of determining any Taxes; (y) prepare and file,
and cause its Affiliates to prepare and file, its Tax Returns on a basis
consistent with the Allocation; and (z) take no position, and cause its
Affiliates to take no position, inconsistent with the Allocation on any
applicable Tax Return or in any proceeding before any Taxing Authority or
otherwise.  In the event that the
Allocation is disputed by any Taxing Authority, the Party receiving notice of
the dispute shall promptly notify the other Party hereto, and Seller and
Purchaser agree to use their commercially reasonable efforts to defend such
Allocation in any audit or similar proceeding. 
The adjustments to the Gross Purchase Price determined pursuant to Section 2.7
shall be allocated to and among the Equity Interests and the Purchased Assets
in the same proportion as the original Allocation of the Gross Purchase Price
(plus Assumed Liabilities, to the extent properly taken into account under Section 1060
of the Code) among the Equity Interests and the Purchased Assets to the extent
permitted by applicable Law.


 


Notwithstanding the foregoing, prior to Closing,
Seller and Purchaser shall agree upon a valuation for the Real Property to be
used in connection with any real estate Transfer Taxes and relevant Tax
Returns.


 


(b)   If Seller and Purchaser fail
to agree on the Allocation, such matter shall be referred to a law firm or
accounting firm (the “Arbiter”) for binding arbitration. Seller and
Purchaser shall mutually agree on an Arbiter. 
Within thirty (30) days of the selection of the Arbiter, Seller and
Purchaser shall deliver to the Arbiter copies of any schedules or documentation
which may reasonably be required by the Arbiter to make its determination.  Each of Purchaser and Seller shall be
entitled to submit to the Arbiter a memorandum setting forth its position with
respect to such arbitration.  The Arbiter
shall render a determination within sixty (60) days of its selection.  The determination of the Arbiter shall be
final and binding on all Parties.  The
costs incurred in retaining the Arbiter shall be shared equally, fifty percent
(50%) by Seller and fifty percent (50%) by Purchaser.


 


Section 2.9             Closing.  (a) The Closing shall take place at the
offices of Davis Polk & Wardwell, 450 Lexington Avenue, New York, New
York 10017, at 10:00 A.M., New York time on the third (3rd)
Business Day following the satisfaction or waiver of the conditions precedent
specified in Article VI (other than the conditions to be satisfied on the
Closing Date, but subject to the waiver or satisfaction of such conditions) or
at such other times and places as the Parties may mutually agree.  The date on which the Closing occurs is
called the “Closing Date.”  The
Closing shall be deemed to occur and be effective as of 11:59 P.M. New
York time on the Closing Date (the “Effective Time”).


 


(b)   At the Closing, Purchaser
shall deliver or cause to be delivered to Seller (i) the Gross Purchase
Price by wire transfer of immediately available funds to an account or accounts
specified by Seller and (ii) the officer’s certificate referenced in Section 6.3(c).


 


(c)   At the Closing, Seller shall
deliver or cause to be delivered to Purchaser (i) all certificates (if
any) representing the Equity Interests, (ii) the officer’s certificate
referenced in Section 6.2(c), (iii) the deed conveying the Real
Property to Purchaser, (iv) subject to the provisions of Section 5.18,
the assignment of the Real Property Leases to 


 


26

















 


Purchaser, and (v) any other documents requested by Purchaser and
reasonably necessary or appropriate to transfer and convey fully to Purchaser
all of the rights, titles and interests intended to be conveyed to Purchaser
under this Agreement and the other Transaction Documents.


 


(d)        At the Closing, Seller
and Purchaser shall enter into the Transaction Documents (other than this
Agreement).


 


Section 2.10           Further
Conveyances.  From time to time
following the Closing, Seller and Purchaser shall execute, acknowledge and
deliver all such further conveyances, notices, assumptions, releases and
acquittances and such other instruments, and shall take such further actions,
as may be reasonably necessary or appropriate to transfer and convey fully to
Purchaser and its successors or assigns, all of the rights, titles and
interests intended to be conveyed to Purchaser under this Agreement and the
other Transaction Documents and to perfect the assumption of the Liabilities
intended to be assumed by Purchaser under this Agreement and the other Transaction
Documents, and to otherwise make effective the transactions contemplated hereby
and in the other Transaction Documents.


 


ARTICLE III


 


REPRESENTATIONS AND WARRANTIES OF SELLER


 


Except as set forth in the letter (the “Seller
Disclosure Letter”) delivered by Seller to Purchaser concurrently with the
execution of this Agreement (it being understood that any matter disclosed on
any Schedule of the Seller Disclosure Letter will be deemed to be disclosed on
any other Schedule of the Seller Disclosure Letter to the extent that it is
reasonably apparent from such disclosure that such disclosure is applicable to
such other Schedule or Schedules, but shall expressly not be deemed to
constitute an admission by Seller, or to otherwise imply, that any such matter
is material for the purposes of this Agreement), Seller hereby represents and
warrants to Purchaser as follows:


 


Section 3.1             Organization
and Qualification.  Seller is a
corporation duly organized and validly existing under the Laws of
Luxembourg.  Each Equity Selling Entity
and Asset Selling Entity is an entity duly organized, validly existing and,
where applicable, in good standing under the Laws of the jurisdiction of its
organization.


 


Section 3.2             Corporate
Authority; Binding Effect.  (a) Seller
has all requisite corporate power and authority to execute and deliver the
Transaction Documents and to perform its obligations hereunder and
thereunder.  The execution and delivery
by Seller of the Transaction Documents and each other document, agreement or
instrument to be executed and delivered by Seller pursuant to the Transaction
Documents, and the performance by Seller of its obligations hereunder and
thereunder, have been, or will have been at the Closing, duly authorized by all
requisite corporate action on the part of Seller.


 


(b)   The Transaction Documents,
when executed and delivered by Seller, assuming due execution and delivery
hereof and thereof by Purchaser, constitute the valid and binding obligations
of Seller, enforceable against Seller in accordance with their terms, except as
such enforcement may be limited by bankruptcy, insolvency, reorganization,
fraudulent 


 


27

















 


conveyance, moratorium or similar Laws affecting creditors’ rights
generally or by general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law).


 


Section 3.3             Conveyed
Entities; Capital Structure.  (a) Each
of the Conveyed Entities is duly organized, validly existing and, where
applicable, in good standing under the Laws of its jurisdiction of
organization, except in jurisdictions where the failure to be in good standing
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, with the corporate, limited liability company or
limited partnership power and authority to own and operate its properties and
assets and to carry on its business as currently conducted.  Each of the Conveyed Entities is duly
qualified to do business in each jurisdiction where the nature of its business
or properties makes such qualification necessary, except in jurisdictions where
the failure to be so qualified would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.


 


(b)   Schedule 3.3(b) of
the Seller Disclosure Letter sets forth the authorized capitalization of the
Conveyed Entities and the number of shares of each class of capital stock or
other equity interests in each such Conveyed Entity, which are (to the extent
applicable) validly issued and outstanding, fully paid and non-assessable.  There are no outstanding warrants, options,
agreements, subscriptions, convertible or exchangeable securities or other
Contracts pursuant to which any of the Conveyed Entities is or may become obligated
to issue, sell, purchase, return or redeem any shares of capital stock or other
securities or other equity interests of the Conveyed Entities, and no equity
securities or other equity interests of any of the Conveyed Entities are
reserved for issuance for any purpose. 
The Equity Selling Entities own of record the outstanding Equity
Interests as indicated on Schedule 3.3(b) of the Seller Disclosure
Letter, free and clear of all Liens other than Permitted Liens. The Conveyed
Entities have no Subsidiaries.


 


Section 3.4             Non-Contravention.  The execution, delivery and performance of
the Transaction Documents by Seller, and the consummation of the transactions
contemplated hereby and thereby, do not and will not (i) violate any
provision of the certificate of incorporation, bylaws or comparable
organizational document of Seller or any of the Equity Selling Entities, the
Asset Selling Entities or the Conveyed Entities, as applicable; (ii) subject
to obtaining the consents referred to in Schedule 3.4 of the Seller
Disclosure Letter, conflict with, result in a breach of, constitute a default
under, or result in the termination, cancellation or acceleration (whether
after the giving of notice or the lapse of time or both) of any right or
obligation of the Seller Entities or the Conveyed Entities under, or to a loss
of any benefit of the Business to which the Seller Entities or the Conveyed
Entities are entitled under, any Material Contract, Real Property Lease or
material license of Transferred Intellectual Property and (iii) assuming
the accuracy of Section 4.3, violate or result in a breach of or
constitute a default under any Law or other restriction of any Governmental
Authority to which any Seller Entity or Conveyed Entity is subject; except,
with respect to clauses (ii) and (iii), for any violations, breaches,
conflicts, defaults, terminations, cancellations or accelerations as would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.


 


Section 3.5             Permits.  Except as set forth on Schedule 3.5 of
the Seller Disclosure Letter, the execution and delivery by Seller of the
Transaction Documents and each 


 


28

















 


other
document, agreement or instrument to be executed and delivered by Seller
pursuant to the Transaction Documents do not require any Permits, except where
the failure to obtain such Permits would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.


 


Section 3.6             Financial
Information; Undisclosed Liabilities. 
(a) The audited combined balance sheets of the Business as at September 28,
2007, September 29, 2006 and September 30, 2005, the related combined
statements of income and cash flows for the fiscal years then ended and the
unaudited combined balance sheet of the Business as at March 28, 2008 and
the related statement of income (subject to normal year-end adjustments and the
omission of footnotes to the financial statements) for the period then ended (September 28,
2007 being referred to herein as the “Balance Sheet Date”) (the combined
balance sheet of the Business at the Balance Sheet Date is hereinafter referred
to as the “Balance Sheet”), are included as Schedule 3.6(a)(i) of
the Seller Disclosure Letter and were prepared in accordance with GAAP
consistently applied, except as described in Schedule 3.6(a)(ii) and
Schedule 3.6(a)(iii) of the Seller Disclosure Letter.


 


(b)   Except as described in Schedule
3.6(a)(ii) and Schedule 3.6(a)(iii) of the Seller
Disclosure Letter, as of the date of such financial statements, the combined
balance sheets of the Business referred to in Section 3.6(a) fairly
presented, in all material respects, the financial position of the Business at September 28,
2007, September 29, 2006, September 30, 2005 and March 28, 2008,
respectively, and the related statements of income and cash flows referred to
in Section 3.6(a) fairly presented, in all material respects, the
results of operations and cash flows of the Business for the periods then
ended.


 


(c)   The Business does not have
any Liabilities (whether accrued, absolute, contingent or otherwise) that would
be required to be set forth on a consolidated balance sheet prepared in
accordance with GAAP (or in the notes thereto), except (i) Liabilities
reflected on the Balance Sheet or disclosed in the notes thereto included in
the financial statements referred to in Section 3.6(a), (ii) Retained
Liabilities, (iii) Liabilities incurred in the ordinary course of the
Business and consistent with past practice since the Balance Sheet Date or
which would be included in Closing Date Working Capital, (iv) Liabilities
incurred in connection with the transactions contemplated hereby, (v) Liabilities
arising from performance obligations under any Contract or outstanding purchase
order, or (vi) Liabilities which would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.  For the avoidance of doubt, this Section 3.6(c) does
not address any matters specifically addressed elsewhere in Article III,
including those matters addressed in Sections 3.10 and 3.16.


 


Section 3.7             Absence of Certain Changes.   From the Balance Sheet Date to the date of
this Agreement, there has not occurred a Material Adverse Effect.  Except as set forth on Schedule 3.7 of
the Seller Disclosure Letter, since the Balance Sheet Date to the date of this
Agreement, the Business has been conducted in all material respects in the
ordinary course of business and consistent with past practice.  From the Balance Sheet Date to the date of
this Agreement, the Asset Selling Entities and the Conveyed Entities have not
suffered any material damage, destruction or other casualty loss (whether or
not covered by insurance) with respect to the Business or any Purchased Assets.


 


29














 


Section 3.8             No
Litigation.  Except as set forth on Schedule
3.8 of the Seller Disclosure Letter, there is no action, suit, litigation,
legal proceeding or arbitration (collectively “Litigation”) pending, or,
to the Knowledge of Seller, threatened against any Seller Entity or any
Conveyed Entity by or before any Governmental Authority or arbitrator which
would reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.


 


Section 3.9             Compliance
with Laws.


 


(a)           Except as set forth on Schedule
3.9(a) of the Seller Disclosure Letter, Seller, each Seller Entity and
each Conveyed Entity is in compliance in all material respects with all Laws
applicable to the ownership or operation of the Business, except to the extent
that the failure to comply therewith would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect; and


 


(b)           Seller, each Seller Entity and each
Conveyed Entity possesses all Permits necessary for the conduct of the Business
as it is currently conducted, except where the failure to possess any such
Permit would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.


 


Section 3.10           Environmental
Matters.  (a) Except as would
not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, to the Knowledge of Seller, (i) the Business, the
Conveyed Entities and the Purchased Assets have since January 1, 2006 been
and are currently in compliance with all applicable Environmental Laws and
(ii) there are no claims, proceedings, investigations or actions by any
Governmental Authority or other Person pending or, to the Knowledge of Seller,
threatened in writing in connection with the operation of the Business, the
Conveyed Entities or the Purchased Assets, under any applicable Environmental
Law.


 


(b)           Other than as set
forth in this Section 3.10, Seller does not make any representation or
warranty with respect to environmental matters.


 


Section 3.11           Material
Contracts.  (a) Schedule 3.11
of the Seller Disclosure Letter sets forth as of the date hereof a list of the
following Contracts that relate directly and predominantly to the Business to
which a Seller Entity or a Conveyed Entity is a party (collectively, the “Material
Contracts”), materially correct and complete copies of which Seller has
made available to Purchaser prior to the Closing:


 


(i)          each Equipment Lease which entails annual rental payments
in excess of $250,000 per annum or $1,000,000 in the aggregate;


 


(ii)         each
Contract for goods and/or services between Seller and/or any of its Affiliates
(other than the Business) or any of the officers, directors or employees of
Seller and/or any of its Affiliates (other than the Business), on the one hand,
and the Business, on the other hand;


 


(iii)        each
mortgage, indenture, security agreement, pledge, note, loan agreement or
guarantee (excluding items set forth in Schedule 3.13(a) of the
Seller Disclosure Letter) in respect of Indebtedness in excess of $500,000;


 


30

















 


(iv)       each
customer Contract expected to result in payment to the applicable Asset Selling
Entity or Conveyed Entity in excess of $5,000,000 per annum or $15,000,000 in
the aggregate over the last three years;


 


(v)        each
outstanding Contract with vendors of the Business expected to result in payment
by the applicable Asset Selling Entity or Conveyed Entity, respectively, in
excess of $5,000,000 per annum or $15,000,000 in the aggregate over the last
three years;


 


(vi)       each
Contract materially limiting the ability of the applicable (A) Asset
Selling Entity (or following the Closing, the Business) to compete with any
Person in connection with such entity’s conduct of the Business or
(B) Conveyed Entity to compete with any Person in connection with such
entity’s conduct of the Business;


 


(vii)      each
material joint venture Contract; and


 


(viii)     each
Contract pursuant to which Seller or its Affiliates (A) licenses any
Intellectual Property material to the Business as currently conducted
(excluding licenses for commercial off the shelf computer software that are
generally available which have an aggregate acquisition cost of $100,000 or
less) or (B) grants a license to use any Transferred Intellectual Property
material to the Business (other than agreements entered into in the ordinary
course of business).


 


(b)   Each Contract set forth on Schedule
3.11 of the Seller Disclosure Letter is in full force and effect and there
exists no default or event of default by the applicable Seller Entity or
Conveyed Entity or, to the Knowledge of Seller, any other party to any such
Contract, with respect to any material term or provision of any such Contract,
in each case which would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.


 


Section 3.12           Intellectual
Property.


 


(a)   Except as set forth in Schedule
3.12 of the Seller Disclosure Letter, the Transferred Intellectual Property
constitutes all material Intellectual Property owned by Seller and its
Affiliates (other than the Conveyed Entities) and used exclusively in the
conduct of the Business as currently conducted.


 


(b)           Seller has made available to
Purchaser materially correct and complete lists of all (i) patents and
patent applications, (ii) registrations and applications for any
trademarks, service marks, logos, domain names and trade names, and
(iii) registrations and applications for registration of any copyrights,
in each case, which are material to the Business and owned by any Asset Selling
Entity and included in the Transferred Intellectual Property.  Except as set forth in Schedule 3.12
of the Seller Disclosure Letter, all patents and patent applications included
in the Transferred Intellectual Property and material to the Business have been
validly and properly assigned to an Asset Selling Entity.


 


(c)           The applicable Asset Selling Entity
solely owns or has the right to use, free and clear of all Liens other than
Permitted Liens, all of the Transferred Intellectual Property, except where the
failure to so own or have such right to use would not reasonably be expected to



 


31

















 


have, individually or in the aggregate, a Material Adverse Effect.  Except as set forth on Schedule 3.12
of the Seller Disclosure Letter, there is no claim, demand or proceeding by any
Person which is currently pending or, to the Knowledge of Seller, threatened in
writing, which challenges the rights of the applicable Asset Selling Entity or
Equity Selling Entity in respect of the Transferred Intellectual Property and
Seller has no Knowledge of any third party that is currently infringing,
misappropriating, misusing or violating any Transferred Intellectual Property
in any material respect.  To the
Knowledge of Seller, the Transferred Intellectual Property and conduct of any
material aspect of the Business does not infringe, misappropriate, misuse or
violate any Intellectual Property of any Person in any material respect.  Except as set forth on Schedule 3.12
of the Seller Disclosure Letter, within the last three (3) years, Seller
has not received written notice from any Person, challenging any Asset Selling
Entity’s or Equity Selling Entity’s claim to ownership or right to use any
Transferred Intellectual Property that is material to the Business.


 


Section 3.13           Real
Property.  (a) Schedule
3.13(a) of the Seller Disclosure Letter sets forth a list as of the
date hereof of all of the real property owned by any of the Asset Selling
Entities and the Conveyed Entities and used primarily in the Business
(collectively, the “Real Property”). 
An Asset Selling Entity or a Conveyed Entity has title in fee simple (or
its equivalent under applicable Law) to the Real Property, free and clear of
all Liens, other than Permitted Liens and Liens that will be released at or
prior to the Closing.


 


(b)   Schedule 2.2(a) and
Schedule 3.13(b) of the Seller Disclosure Letter together set forth
a list as of the date hereof of each Real Property Lease and all leasehold
interests (including any prepaid rent, security deposits or options to renew or
purchase in connection therewith) in real property of the Conveyed Entities and
of the Asset Selling Entities used primarily in the Business.  Materially correct and complete copies of all
leases set forth on Schedule 2.2(a) and Schedule 3.13(b) of
the Seller Disclosure Letter have been made available to Purchaser.  Each lease set forth on Schedule 2.2(a) and
Schedule 3.13(b) of the Seller Disclosure Letter is in full force
and effect and there exists no default or event of default by the applicable
Asset Selling Entity or Conveyed Entity or, to the Knowledge of Seller, any
other party to any such lease, with respect to any material term or provision
of any such lease, in each case which would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.


 


Section 3.14           Employee
Benefit Plans.  (a) Except as
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect:  (i) each
Benefit Plan that is maintained by a Conveyed Entity which is intended to be
“qualified” within the meaning of Section 401(a) of the Code has
received a favorable determination letter from the IRS (or has submitted, or is
within the remedial amendment period for submitting, an application for a
determination letter with the IRS and is awaiting receipt of a response) and,
to the Knowledge of Seller, no event has occurred and no condition exists as of
the date hereof which could reasonably be expected to result in the revocation
of any such determination; and (ii) to the Knowledge of Seller, no claim,
action or litigation has been made or commenced with respect to any Benefit
Plan that is maintained by a Conveyed Entity (other than routine claims for
benefits payable in the ordinary course, and appeals of such denied
claims).  Except as would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect, each 


 


32

















 


Benefit
Plan that is maintained by a Conveyed Entity has been administered in
accordance with its terms and ERISA, the Code, and other applicable Law.


 


(b)   Each Asset Selling Entity
and Conveyed Entity has paid and discharged all of its Liabilities arising
under ERISA or the Code of a character which, if unpaid or unperformed, would
result in the imposition of a Lien (other than a Permitted Lien) against the
properties or assets of the Business.


 


(c)           Schedule 3.14(c) of
the Seller Disclosure Letter lists each material Benefit Plan.  Seller has furnished Purchaser with
materially correct and complete copies of the plan documents, summary plan
descriptions, and the related trust agreements, insurance contracts and funding
arrangements that implement each Benefit Plan (to the extent such documentation
exists) or that are reasonably required by Purchaser in connection with its
obligations under Section 5.5 and Section 5.6.


 


(d)           Other than as set
forth in this Section 3.14, Seller does not make any representation or
warranty with respect to employee benefits plan matters.


 


Section 3.15           Labor
Matters.  (a) Except as set
forth on Schedule 3.15(a) of the Seller Disclosure Letter, each
Asset Selling Entity and each Conveyed Entity is in compliance with all
applicable Laws applicable to the ownership and operation of the Business
respecting employment and employment practices, terms and conditions of
employment and wages and hours, and is not engaged in any unfair labor
practice, other than any such non-compliance or unfair labor practice that
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.


 


(b)   No unfair labor practice
complaint against any Asset Selling Entity or Conveyed Entity or any of their
representatives or employees in connection with the ownership and operation of
the Business is pending or, to the Knowledge of Seller, has been threatened
before the National Labor Relations Board, other than any such complaint that
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.


 


(c)           There is no labor strike, dispute,
slowdown or stoppage actually pending, or to the Knowledge of Seller,
threatened or reasonably anticipated, against or involving the Business that
would reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.


 


(d)           As
of the date hereof, there are no collective bargaining and labor union
agreements applicable to any Business Employee. 
No union is currently certified, and there is no union representation question
and no union or other organizational activity that would be subject to the
National Labor Relations Act (20 U.S.C. §151 et. seq.), or any similar law
existing or, to the Knowledge of Seller, threatened with respect to the
operations of the Business.  For the
avoidance of doubt, collective bargaining and labor agreements referred to in
this Section 3.15(d) shall not include any works council, national
union or similar body or organization or the statutory obligations pertaining
thereto.


 


(e)           No grievance exists
or, to the Knowledge of Seller, has been threatened and no arbitration
proceeding arising out of or under any collective bargaining agreement of the 


 


33

















 


Business is pending or, to the Knowledge of Seller, has been
threatened, other than any such grievance or arbitration proceeding that would
not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. There are no actions, suits, claims, charges or
pending matters relating to any employment, safety or discrimination matters
involving any Business Employees that would reasonably be expected to have a
Materially Adverse Effect.


 


(f)            The representations
and warranties in this Section 3.15 are the sole and exclusive
representations and warranties of Seller concerning labor matters.


 


Section 3.16           Taxes.  (a) With respect to all amounts in
respect of Taxes imposed upon Seller, any of the Seller Entities, the Purchased
Assets or any of the Conveyed Entities, or for which Seller , any of the Seller
Entities or any of the Conveyed Entities are or could be liable, whether to
Taxing Authorities or to other Persons (as, for example, under Tax allocation
agreements), in each case with respect to all taxable periods or portions
thereof ending on or before the Closing Date and relating to the Business, the
Purchased Assets or the Conveyed Entities, all applicable Tax Laws have been or
will be complied with by the Closing and all amounts required to be paid by
Seller, any of the Seller Entities or any of the Conveyed Entities to Taxing
Authorities on or before the close of business on the Closing Date have been or
will be timely paid on or before the Closing Date, except Taxes not then due
and payable or being contested in good faith and Taxes assumed by Purchaser
under this Agreement.


 


(b)   Seller, the Seller Entities
and the Conveyed Entities have timely filed or caused to be filed, or will file
or cause to be filed, all Tax Returns required to be filed on or before the
Closing Date (taking into account applicable extensions) with respect to the
Business, the Purchased Assets or the Conveyed Entities and all such Tax
Returns were (or will be when filed) true, correct and complete.


 


(c)           Each of the Conveyed Entities is a
member of a “consolidated group” (within the meaning of U.S. Treasury
Regulations Section 1.1502-1(h)) of which the respective Equity Selling
Entity is also a member.


 


(d)           Other
than
as set forth in this Section 3.16, Seller does not make any representation
or warranty with respect to Tax matters.


 


Section 3.17           Brokers.  Except for Lehman Brothers Inc., no broker,
finder or investment banker is entitled to any brokerage, finder’s or other fee
or commission in connection with the transactions contemplated by the Transaction
Documents based upon arrangements made by or on behalf of Seller or any Seller
Entity or Conveyed Entity.  Seller is
solely responsible for such fees and expenses of Lehman Brothers Inc.


 


Section 3.18           Title
to Purchased Assets; Sufficiency. 
Seller and its Affiliates owns and has good title to all material
Purchased Assets, free and clear of all Liens other than Permitted Liens.  Except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect and subject
to Sections 3.4 and 5.18, the assets owned by the Conveyed Entities and the
Asset Selling Entities and which are being conveyed hereunder are sufficient
for the conduct of the Business conducted as of the date hereof (except for the
conduct of the Business related to (i) the Excluded Assets,
(ii) Intellectual Property, (iii) the provision of 


 


34

















 


the
services to be provided under the Transition Services Agreement and
(iv) shared services utilized both by the Business and the Tyco
Electronics Core Business and not provided under the Transition Services
Agreement).  Nothing in this
Section 3.18 shall be deemed to constitute a representation or warranty as
to the adequacy of the amounts of working capital, including cash, of the
Business as of the Closing or the availability of the same.


 


Section 3.19           Tangible
Personal Property.  Seller has good
and marketable title to, or a valid leasehold interest in, all of the tangible
property and Inventory included in the Purchased Assets, free and clear of any
Liens, other than Permitted Liens, except as would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect.


 


Section 3.20           Illegal
Payments.  Except as set forth in Schedule
3.20 of the Seller Disclosure Letter, since December 31, 2002, neither
Seller, the Conveyed Entities nor any Seller Entity nor any of their officers,
directors, employees, agents or representatives has made, directly or
indirectly, with respect to Seller, the Conveyed Entities or any of the Seller
Entities or any of their business activities, any bribes or kickbacks, illegal
political contributions, payments from corporate funds not recorded on the
books and records of Seller, the Conveyed Entities or any of the Seller
Entities, payments from corporate funds to governmental officials, in their
individual capacities, for the purpose of affecting their action or the action
of the government they represent, to obtain favorable treatment in securing
business or licenses or to obtain special concessions, or illegal payments from
corporate funds to obtain or retain business, expect as would not reasonably
expected to have, individually or in the aggregate, a Material Adverse Effect.


 


Section 3.21           Government
Contracts.  (a) Except as set
forth in Schedule 3.21 of the Seller Disclosure Letter,  to the Knowledge of Seller, (i) none of
the Business Employees is or during the last three years has been (except as to
routine security investigations) under administrative, civil or criminal
investigation, indictment or information by a U.S. Governmental Authority,
(ii) there is no pending audit or investigation by any U.S. Governmental
Authority of the Business or any Business Employee with respect to any alleged
irregularity, misstatement or omission arising under or relating to a
Government Contract and (iii) during the last three years, neither Seller
nor its Affiliates has made a voluntary disclosure with respect to any alleged
irregularity, misstatement or omission arising under or relating to a
Government Contract with respect to the Business, other than inquiries, audits
and reconciliations that would not reasonably be expected to result,
individually or in the aggregate, in a Material Adverse Effect.  Neither Seller and its Affiliates, nor to the
Knowledge of Seller any of the Business Employees has made any intentional
misstatement or omission in connection with any voluntary disclosure that has
led to any of the consequences set forth in clause (i) or (ii) of the
immediately preceding sentence or any other material damage, penalty
assessment, recoupment of payment or disallowance of cost.


 


(b)   Except
as set forth in Schedule 3.21 of the Seller Disclosure Letter, to the
Knowledge of Seller, there are no disputes between Seller or its Affiliates and
a U.S. Governmental Authority under the Contract Disputes Act or any other
federal statute or between Seller and any of its Affiliates and any prime
contractor, subcontractor or vendor arising under or relating to any such
Government Contract with respect to the Business, except any such claim or
dispute that would not reasonably be expected to result, individually or in the
aggregate, in a 


 


35

















 


Material Adverse Effect.


 


(c)   Except
as set forth in Schedule 3.21 of the Seller Disclosure Letter, neither
Seller and its Affiliates nor to the Knowledge of Seller any of the Business
Employees is (or during the last two years has been) suspended or debarred from
doing business with a U.S. Governmental Authority or is (or during such period
was) the subject of a finding of non-responsibility or ineligibility for U.S.
Government contracting.


 


Section 3.22           Exclusivity of Representations.  The representations and warranties made by
Seller in this Article III are the exclusive representations and
warranties made by Seller with respect to the Conveyed Entities, the Asset
Selling Entities, the Business, the Purchased Assets and the Assumed
Liabilities.  Seller hereby disclaims any
other express or implied representations or warranties with respect to the
Conveyed Entities, the Asset Selling Entities, any of their respective
Affiliates, the Business, the Purchased Assets and the Assumed
Liabilities.  It is understood and agreed
that any Due Diligence Materials made available to Purchaser or its Affiliates
or their respective representatives, do not, directly or indirectly, and shall
not be deemed to, directly or indirectly, contain representations or warranties
of Seller or any of its Affiliates.


 


ARTICLE IV



REPRESENTATIONS AND WARRANTIES OF PURCHASER


 


Purchaser and Guarantor, solely with respect to Sections 4.1, 4.2, 4.3,
4.4, and 4.5, hereby jointly and severally represent and warrant to Seller as
follows:


 


Section 4.1             Organization
and Qualification.  Cobham Defense
Electronic Systems Corporation is a corporation duly organized, validly
existing and in good standing under the Laws of Massachusetts.  Cobham plc is a company duly organized and
validly existing under the Laws of England and Wales.


 


Section 4.2             Corporate
Authority.  (a) Each of
Purchaser and Guarantor has all requisite corporate power and authority to
execute and deliver the Transaction Documents to which it is a party and to
perform its respective obligations hereunder and thereunder.  The execution and delivery by each of
Purchaser and Guarantor of the Transaction Documents and each other document,
agreement or instrument to be executed and delivered by Purchaser or Guarantor,
as the case may be, pursuant to the Transaction Documents, and the performance
by each of Purchaser and Guarantor of its obligations hereunder and thereunder,
have been, or will have been at the Closing, duly authorized by all requisite
corporate action on the part of Purchaser or Guarantor, as the case may be.


 


(b)   The Transaction Documents to
which it is a party, assuming due execution and delivery hereof and thereof by
Seller, constitute the valid and binding obligations of each of Purchaser and
Guarantor, enforceable against Purchaser and Guarantor in accordance with their
terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or similar Laws affecting
creditors’ rights generally or by 


 


36

















 


general principles
of equity (regardless of whether enforcement is sought in a proceeding in
equity or at law).


 


Section 4.3             Non-Contravention.  The execution, delivery and performance by
each of Purchaser and Guarantor of the Transaction Documents to which it is a
party, and the consummation of the transactions contemplated hereby and
thereby, do not and will not (i) violate any provision of the certificate
of incorporation, bylaws or other comparable organizational document of
Purchaser or Guarantor; (ii) conflict with, or result in a breach of,
constitute a default under, result in the termination, cancellation or
acceleration (whether after the giving of notice or the lapse of time or both)
of any right or obligation of Purchaser or Guarantor under, or to a loss of any
benefit of Purchaser or Guarantor to which Purchaser or Guarantor is entitled
under, any Contract to which Purchaser or Guarantor is a party or by which any
of its assets are bound, lease of real estate or license of Intellectual
Property to which Purchaser or Guarantor and any of their respective Affiliates
is a party or is subject and (iii) assuming the accuracy of
Section 3.4, violate or result in a breach of or constitute a default
under any Law or other restriction of any Governmental Authority to which
Purchaser or Guarantor is subject.


 


Section 4.4             Permits.  The execution and delivery by each of
Purchaser and Guarantor of the Transaction Documents to which it is a party and
each other document, agreement or instrument to be executed and delivered by
Purchaser or Guarantor pursuant to the Transaction Documents do not require any
Permits.


 


Section 4.5             Third-Party
Approvals. Other than the approvals to be obtained as set forth in
Section 6.1, the execution, delivery and performance by each of Purchaser
and Guarantor of the Transaction Documents to which it is a party and each
other document, agreement or instrument to be executed and delivered by
Purchaser or Guarantor pursuant to the Transaction Documents, and the
transactions contemplated hereby and thereby, do not require any consents,
waivers, authorizations or approvals of, or filings with, any third Persons
which have not been obtained or effected by Purchaser or Guarantor.


 


Section 4.6             Financial
Capability.  As of the date hereof
and on the Closing Date, Purchaser has and will have sufficient funds to pay
the Gross Purchase Price and to perform and discharge all of its other
obligations hereunder, on the terms and conditions provided in or contemplated
by this Agreement.


 


Section 4.7             Securities
Act.  Purchaser is acquiring the
Equity Interests solely for the purpose of investment and not with a view to,
or for sale in connection with, any distribution thereof.  Purchaser acknowledges that the Equity
Interests are not registered under the Securities Act, any applicable state
securities Laws or any applicable foreign securities Laws, and that such Equity
Interests may not be transferred or sold except pursuant to the registration
provisions of the Securities Act or applicable foreign securities Laws or
pursuant to an applicable exemption therefrom and pursuant to applicable state
securities Laws.  Purchaser (either alone
or together with its advisors) has sufficient knowledge and experience in
financial and business matters so as to be capable of evaluating the merits and
risks of its investment in the Equity Interests and is capable of bearing the
economic risks of such investment.


 


37














 


Section 4.8                                      Investigation
by Purchaser; Seller’s Liability. 
Purchaser has conducted its own independent investigation, verification,
review and analysis of the operations, assets, Liabilities, results of
operations, financial condition, technology and the probable success or
profitability of the ownership, use or operation of the Business, the Conveyed
Entities and the Purchased Assets by Purchaser after the Closing, which
investigation, review and analysis was conducted by Purchaser and, to the
extent Purchaser deemed appropriate, by its Affiliates and Bidder
Representatives.  Purchaser has selected
and been represented by, and/or consulted with, such expert advisors as it has
deemed appropriate in connection with the negotiation of this Agreement and its
determination to enter into and consummate the transactions contemplated
hereby.  Purchaser acknowledges that it,
its Affiliates and the Bidder Representatives have been provided adequate
access to the personnel, properties, premises and records of the Business, the
Conveyed Entities and the Purchased Assets for such purpose.  In entering into this Agreement, Purchaser
acknowledges that it has relied solely upon the aforementioned investigation,
review and analysis and not on any factual representations or opinions of
Seller or the Seller Entities and Conveyed Entities or any of Seller’s or its
Affiliates’ Representatives (except the specific representations and warranties
of Seller set forth in Article III). 
Purchaser acknowledges and agrees that neither Seller, any Seller Entity
nor any of their respective Affiliates or Representatives shall have any
liability or responsibility whatsoever to Purchaser, its Affiliates, or the
Bidder Representatives on any basis (including in contract or tort, under federal
or state securities Laws or otherwise) based upon any Due Diligence Materials
delivered or made available to Purchaser, its Affiliates, or the Bidder
Representatives, except that the limitations of this Section 4.8 shall not
apply to Seller insofar as Seller makes the specific representations and
warranties set forth in Article III or in the event of a deliberate
misrepresentation by Seller or its Affiliates or Representatives.


 


Section 4.9                                      No Litigation.  There is no action, Order outstanding, suit,
litigation, legal proceeding or arbitration pending or, to the knowledge of
Purchaser, threatened in writing, against Purchaser or any of its Affiliates by
or before any Governmental Authority or arbitrator which could delay or prevent
the consummation of the transactions contemplated by the Transaction Documents.


 


Section 4.10                                Brokers.  Except for UBS Securities LLC, no broker,
finder or investment banker is entitled to any brokerage, finder’s or other
fee, commission or expenses in connection with the transactions contemplated by
the Transaction Documents based upon arrangements made by or on behalf of
Purchaser.  Purchaser is solely
responsible for such fees and expenses of UBS Securities LLC.


 


Section 4.11                                Solvency.  Purchaser is not entering into the transactions
contemplated hereby with actual intent to hinder, delay or defraud either
present or future creditors.  Immediately
after giving effect to the transactions contemplated hereby Purchaser and its
Subsidiaries will be Solvent and will have adequate capital to carry on their
respective businesses.


 


Section 4.12                                Confidentiality
Agreement.  Purchaser and its
Affiliates that are subject to the terms of the Confidentiality Agreement and
the Bidder Representatives have complied in all material respects with the
terms of the Confidentiality Agreement including the restrictions on contacting
other potential acquirers of the Business and the restriction on limiting 


 


38

















 


Purchaser’s financing sources
from providing financing to, or arranging financing for, any other potential
acquirer of the Business.


 


Section 4.13                                Absence of
Arrangements with Management.  As of
the date hereof, there are no Contracts, undertakings, commitments, agreements
or obligations or understandings between Purchaser or any of its Affiliates, on
the one hand, and any member of the management of the Business, on the other
hand, relating to the transactions contemplated by the Transaction Documents or
the operation of the Business after the Closing.


 


ARTICLE V


 


COVENANTS


 


Section 5.1                                      Information
and Documents.  (a) From and
after the date hereof and prior to the Closing, subject to applicable Law and
any applicable Order, upon reasonable advance notice to Seller, Seller shall
permit Purchaser and its Representatives to have supervised, reasonable access,
during regular normal business hours, to the Business Employees and employee of
Seller, and to the assets, properties, books and records of the Seller Entities
and the Conveyed Entities to the extent relating primarily to the Business and
the Purchased Assets (other than the Excluded Assets and any books and records
relating thereto), and shall, to the extent permitted by applicable Law any
applicable Order, make available to Purchaser such financial and operating data
and other available information with respect to the Business and the Purchased
Assets (to the extent such data or information is readily available under
normal operating procedures), including such information relating to the employment
of the Business Employees with respect to compensation, service and other
similar information relating to Seller’s employment of the Business Employees,
as Purchaser shall from time to time reasonably request for the purposes of
enabling Purchaser to (i) consummate the transactions contemplated by this
Agreement, (ii) evaluate the potential for and to prepare for the sale of
certain of the Purchased Assets (the “On-Sale”) (including but not
limited to cooperating with Purchaser’s independent accountants in preparing an
audit of the financial results of the Purchased Assets of which Purchaser may
dispose, cooperating with Purchaser and its investment bankers and independent
accountants in preparing an information memorandum with respect to such
Purchased Assets and preparing an analysis of issues with respect to the
separation of such Purchased Assets from the Business); provided, however,
that in the event employees of Seller at its Harrisburg, Pennsylvania Shared
Services Facility devote more than one hundred twenty (120) hours (the “Hours
Cap”) of employee time to such On-Sale, Purchase shall reimburse Seller for
any time in excess of the Hours Cap at the rate set forth in item fifteen (15)
of the Services and Pricing Schedule, with respect to information technology
matters, and at the rate set forth in item twenty-one (21) of the Services and
Pricing Schedule, with respect to finance matters and (iii) operate the
Business as operated prior to Closing immediately after Closing; provided,
however, that no such access shall unreasonably interfere with the
Seller Entities’ or the Conveyed Entities’ operation of their respective
businesses, including the Business; and provided, further, that
Seller shall not be required to take any action which could constitute a waiver
of attorney-client privilege.  In
connection with any On-Sale, Purchaser may provide any Information (as such
term is defined in the Confidentiality Agreement) (other than any Information
that was provided to Purchaser and its Representatives in a “restricted folder”
in the on-line data room) in its possession to any potential purchaser; provided
that (i) Purchaser shall 


 


39

















 


provide to Seller the name of
each potential purchaser to whom Purchaser intends to provide Information in
connection with an On-Sale prior to providing any such Information and (ii) no
potential purchaser in connection with an On-Sale shall be granted access to
any employees of Seller and its Affiliates. 
Prior to Purchaser providing any Information to a potential purchaser,
such potential purchaser shall have executed a confidentiality agreement with
terms that are no less restrictive to the potential purchaser than the
Confidentiality Agreement (other than with respect to the cap for consequential
and indirect damages) and that provides that Purchaser shall be liable for any
breaches of the confidentiality agreements by the potential purchasers.  Purchaser shall keep records of all Information
provided to potential purchasers.


 


(b)         All
information received by Purchaser and given by or on behalf of the Seller
Entities and the Conveyed Entities in connection with this Agreement and the
transactions contemplated hereby will be held by Purchaser and its Affiliates
and Representatives as “Evaluation Material”, as defined in, and
pursuant to the terms of, the Confidentiality Agreement.


 


(c)          If,
at any time prior to the Closing, Purchaser becomes aware of any fact or
circumstance relating to any Purchased Asset, Seller Entity or any Conveyed
Entity that would make the representations and warranties of Seller contained
in this Agreement untrue or misleading, Purchaser agrees to promptly notify
Seller of such fact or circumstance.


 


(d)         It
is expressly understood and agreed that, without the prior written consent of
Seller, which consent may be granted or withheld in Seller’s sole and absolute
discretion, nothing in this Agreement shall be construed to grant Purchaser the
right to perform any Phase I, Phase II or other environmental testing on any of
the properties of the Asset Selling Entities or the Conveyed Entities.


 


Section 5.2                                      Conduct of
Business.  (a) From and after
the date hereof to the earlier of (A) the termination of this Agreement
and (B) the Closing Date, Seller shall use commercially reasonable efforts
and shall direct the officers of each Seller Entity and each Conveyed Entity to
conduct the Business in the ordinary course consistent with past practice in
all material respects.  Without limiting
the generality of the foregoing, from and after the date hereof to the earlier
of (A) the termination of this Agreement and (B) the Closing Date
except (i) as otherwise contemplated, permitted or required by the
Transaction Documents, (ii) as Purchaser shall otherwise consent in
writing (for purposes of this Section 5.2(a), such consent may be given by
e-mail and shall be effective upon receipt by Seller), which consent shall not
be unreasonably withheld, delayed or conditioned, (iii) as contemplated by
Schedule 5.2(a) of the Seller Disclosure Letter and (iv) as
may be necessary, in the reasonable judgment of Seller, to remove any Excluded
Assets from any Asset Selling Entity, Seller covenants and agrees that it shall
not, and shall direct the officers of each Seller Entity and each Conveyed
Entity not to:


 


(i)                             sell,
lease, license, abandon or otherwise dispose of any material Purchased Assets,
except (A) in the ordinary course of the Business or (B) to another
Conveyed Entity or Asset Selling Entity;


 


(ii)                          other
than in the ordinary course of the Business consistent with past practice, as
required by applicable Law or pursuant to the terms of any Benefit Plan as 


 


40

















 


in effect on the date hereof
(or as modified to cause it to comply with applicable Law), (A) materially
increase or materially enhance the compensation or benefits of the Business
Employees, (B) grant or enhance any retention, severance, termination or
other similar pay to any Business Employee or (C) make an offer of
employment to any person with an annual base salary in excess of $100,000;


 


(iii)                       change,
amend or restate the charter, certificate of formation or incorporation,
limited partnership agreement, operating agreement or bylaws (or other
comparable organizational or governing documents) of any Conveyed Entity;


 


(iv)                      authorize
for issuance, issue, sell or deliver or agree or commit to issue, sell or
deliver (A) any capital stock of, or other equity or voting interest in,
any Conveyed Entity or (B) any securities convertible into, exchangeable
for or evidencing the right to subscribe for or acquire either (1) any
capital stock of, or other equity or voting interest in, any Conveyed Entity or
(2) any securities convertible into, exchangeable for or evidencing the
right to subscribe for or acquire, any shares of the capital stock of, or other
equity or voting interest in, any Conveyed Entity;


 


(v)                         write-off
as uncollectible any material notes or material accounts receivable of the
Business, except write-offs in the ordinary course of the Business and any
write-off of such notes and accounts receivable that are fully reserved for in
a manner consistent with the policies and principles set forth on Exhibit A;


 


(vi)                      split,
combine, redeem or reclassify, or purchase or otherwise acquire, any shares of
its capital stock or its other securities;


 


(vii)                   (A) incur
any Indebtedness, other than short term Indebtedness or by borrowings under
existing credit facilities or (B) make any loans or advances to any other
Person, other than routine expense advances to employees in the ordinary course
of the Business;


 


(viii)                other than in the
ordinary course of the Business (A) make any material Tax election not
required by Law that would have a continuing effect on the Conveyed Entities,
the Business or the Purchased Assets following the Closing Date or (B) settle
or compromise any material Tax liability for which Purchaser is responsible
under Section 7.2;


 


(ix)                        except as
required by applicable Law or GAAP, make any material change in the Business’
methods, principles and practices of accounting; or


 


(x)                           execute
any Contract or letter of intent (whether or not binding) or other commitment,
whether or not in writing, to do any of the foregoing.


 


(b)         Notwithstanding
anything contained in this Agreement to the contrary, Seller, the Seller
Entities and the Conveyed Entities shall be permitted to (i) maintain
through the Closing Date the cash management system of the Business and the
cash management procedures as currently conducted by Seller, the Seller Entities
and the Conveyed Entities, (ii) withdraw all Conveyed Entities Closing
Cash from each Conveyed Entity and all Asset Selling Entities 


 


41

















 


Closing Cash from each Asset
Selling Entity immediately prior to the Closing (it being understood that
nothing in this Agreement shall require Seller to ensure or otherwise convey to
Purchaser any Conveyed Entities Closing Cash or Asset Selling Entities Closing
Cash) and (iii) settle any intercompany accounts in any manner Seller
deems appropriate.  Notwithstanding
anything contained in this Agreement to the contrary, the Asset Selling
Entities and the Conveyed Entities shall be permitted to borrow funds from
Seller or its Affiliates as is necessary to operate the Business in the
ordinary course and repay such borrowings in the ordinary course.  Nothing contained in this Agreement shall
give Purchaser, directly or indirectly, rights to control or direct the
operations of the Business, the Purchased Assets or the Conveyed Entities prior
to the Closing Date.  During the period
from the date of this Agreement until the earlier of (x) the date this
Agreement is terminated in accordance with its terms and (y) the Closing
Date, Purchaser shall not take any action or omit to take any action for the
purpose of directly or indirectly preventing, materially delaying or materially
impeding (or that would reasonably be expected to prevent, materially delay or
materially impede) the consummation of the transactions contemplated by this
Agreement, permit or cause any of its Subsidiaries or Affiliates to do any of
the foregoing or agree or commit to do any of the foregoing, or agree in
writing or otherwise to take any of the foregoing actions.


 


Section 5.3                                      Efforts to
Close.  Except as otherwise set forth
in Section 5.4, subject to the terms and conditions set forth herein, and
to applicable Law, each Party agrees to use its reasonable best efforts to
take, or cause to be taken, all actions necessary, and assist and cooperate
with the other Party in doing, all things necessary, proper or advisable, to
consummate and make effective, in the most expeditious manner practicable, the
transactions contemplated hereby, including the satisfaction of the respective
conditions set forth in Article VI.


 


Section 5.4                                      Antitrust Laws.  (a) Purchaser and Seller shall as
promptly as practicable take all actions necessary to file or cause to be filed
the filings required of them or any of their Affiliates under any applicable
Antitrust Laws in connection with this Agreement and the transactions
contemplated hereby including filing with the United States Federal Trade
Commission (the “FTC”) and the United States Department of Justice (the “DOJ”)
no later than twenty (20) Business Days following the date hereof the
notification and report forms required for the transactions contemplated by
this Agreement and any supplemental information requested in connection
therewith pursuant to the HSR Act.  Any
such notification and report forms and supplemental information will be in
substantial compliance with the requirements of the HSR Act.  Seller and Purchaser shall furnish to each
other such necessary information and reasonable assistance as the other may
request, in connection with its preparation of any filing or submission that is
necessary under the HSR Act.  Seller and
Purchaser shall keep each other apprised of the status of any communications
with, and inquiries or requests for additional information from the FTC and the
DOJ and shall comply promptly with any such inquiry or request.  Seller and Purchaser will use their
respective reasonable best efforts to obtain any clearance required under the
HSR Act for the transactions contemplated by this Agreement, and to request
early termination under the HSR Act.


 


(b)         Purchaser
shall be responsible for the payment of all filing fees under any Antitrust
Laws.  Each Party shall be responsible
for the fees and costs that it incurs in connection with making such filings
under the Antitrust Laws.


 


42

















 


(c)          Notwithstanding
anything in this Agreement to the contrary, neither Purchaser nor any of its
Affiliates shall be required to: (i) agree to sell, divest, hold separate,
license, cause a third party to acquire, or otherwise dispose of, the Business,
the Purchased Assets, any Subsidiary, operations, divisions, businesses,
product lines, customers or assets of Purchaser, its Affiliates, or any
Conveyed Entity (a “Divestiture”); (ii) take or commit to take such
other actions that may limit Purchaser, its Affiliates, or any Conveyed Entity’s
freedom of action with respect to, or its ability to retain, one or more of its
operations, divisions, businesses, product lines, customers or assets; (iii) terminate
any Contract or other business relationship; or (iv) enter into any Order,
consent decree or other agreement to effectuate any of the foregoing.


 


Section 5.5                                      Non-EU
Business Employees and Employee Benefits. 
(a) Transfer and Terms and Conditions of Employment.  With respect to any Non-EU Business Employee
of an Asset Selling Entity, within a reasonable period of time (but not less
than fifteen (15) days) prior to the Closing Date, Purchaser shall offer
employment to each such Non-EU Business Employee (and, in the case of Non-EU
Business Employees employed by Conveyed Entities, to cause such Conveyed
Entities to continue the employment of each of their Non-EU Business
Employees), commencing as of the Closing Date, in the same job or position and
location as in effect immediately prior to the Closing Date and (x) at a
rate of pay at least equal to, (y) with severance entitlements not less
favorable than, and (z) with other employee benefits, perquisites and
terms and conditions of employment (including benefits pursuant to qualified
and non-qualified retirement and savings plans, medical, life insurance,
disability, dental and pharmaceutical plans and programs, deferred compensation
arrangements and incentive compensation plans) not substantially less favorable
in the aggregate than, the rate of pay, severance entitlements and other
employee benefits, perquisites and terms and conditions of employment provided
to the Non-EU Business Employee, or to which the Non-EU Business Employee would
be entitled, upon commencing employment with the applicable Asset Selling
Entity, Conveyed Entity or applicable Affiliate of Seller, immediately prior to
the Closing Date.  For purposes of this Section 5.5, (i) “pay”
shall include base salary or wages plus any commission, variable pay target
bonus, incentive compensation, premium pay, overtime and shift differentials,
but not stock options or other equity-based compensation and (ii) there
shall be no breach of this Section 5.5(a) if Purchaser does not
grant stock options and other equity-based compensation and does not
provide post-retirement health and post-retirement life insurance benefits to
Non-EU Business Employees; provided, however, that, if and to the
extent stock options or other equity-based compensation are provided to
similarly situated employees of Purchaser and its Affiliates, Purchaser shall
grant (or shall cause to be granted) stock options and other equity-based
compensation to Non-EU Business Employees (or other long-term incentive
compensation, to the extent Purchaser cannot grant such stock options or other
equity-based compensation to a Non-EU Business Employee pursuant to Law).  Purchaser, at the time it extends such
employment offers, shall provide to Seller appropriate information regarding employment
terms and conditions offered to the Non-EU Business Employees, which shall
conform in all respects to the provisions of this Section 5.5.  For Non-EU Business Employees whose terms and
conditions of employment are covered by a collective bargaining agreement,
Purchaser shall offer employment under the same terms and conditions described
in such collective bargaining agreement. 
Purchaser shall consult with Seller prior to extending employment offers
with respect to communicating the offers to the Non-EU Business Employees of
Asset Selling Entities.  Each Non-EU
Business Employee of an Asset Selling Entity who accepts such offer of
employment and each Non-EU Business Employee of a Conveyed Entity 


 


43

















 


who continues employment shall
become an employee of Purchaser or its Affiliates on the Closing Date and is
referred to as a “Transferred Employee,” and all such employees
collectively are referred to as the “Transferred Employees.”  Purchaser acknowledges that by purchasing the
capital stock of the Conveyed Entities, Purchaser or its Affiliates shall
employ (or cause the Conveyed Entities to continue to employ) all Non-EU
Business Employees of the Conveyed Entities commencing as of the Closing Date,
and such Non-EU Business Employees shall be Transferred Employees for purposes
of this Agreement.  For a period of at
least twelve (12) months following the Closing Date, Purchaser covenants and
agrees to (or to cause its Affiliates to) continue to provide each Transferred
Employee with the pay, severance, benefits, perquisites and terms and
conditions of employment described in this Section 5.5(a), unless the
Transferred Employee’s employment is sooner terminated (other than in the case
of severance or similar termination pay and benefits).  No provision in this Agreement shall give any
Business Employee any right to continued employment with Purchaser or impair in
any way the right of Purchaser to terminate the employment of any employee.


 


(b)         Provision
of Health Benefits.  With respect to
U.S. Business Employees, Purchaser shall provide or cause to be provided,
effective commencing on the Closing Date, (i) coverage to all Transferred
Employees and their respective spouses and dependents, under a group health
plan sponsored by Purchaser or its Affiliates, which plan shall have no
pre-existing condition limitations or exclusions with respect to any such
employee, spouse or dependant.  Purchaser
shall be solely responsible for compliance with the requirements of Section 4980B
of the Code and part 6 of subtitle B of Title I of ERISA (“COBRA”),
including the provision of continuation coverage, with respect to all such
Transferred Employees, and their spouses and dependents, for whom a qualifying
event occurs on or after the Closing Date. 
For purposes of this Section 5.5(b), the terms “group health plan,”
“continuation coverage” and “qualifying event” shall have the meanings ascribed
to them in COBRA.


 


(c)          Severance;
Retention; Bonuses.  Without limiting
the generality of the foregoing, (i) Purchaser shall, or shall cause its
Affiliates to, have in effect for at least twelve (12) months following the
Closing Date severance and retention plans, practices and policies applicable
to each Transferred Employee on the Closing Date that are not less favorable
than such policies in effect immediately prior to the Closing Date with respect
to such employee, and Purchaser shall indemnify, in accordance with Article VIII
hereof, and hold harmless Seller and its Affiliates from any severance
Liabilities with respect to Non-EU Business Employees, except as provided in Section 2.5(a)(vii) and
Section 2.5(a)(xii), and (ii) Purchaser shall, or shall cause its
Affiliates to, ensure that each Transferred Employee who was notified of his or
her target bonus for the current fiscal year prior to the Closing Date, and who
meets the performance targets, if any, established at the time of such
notification, receives an annual bonus at least equal to such target
bonus.  For the avoidance of doubt, Seller
agrees to reimburse Purchaser for any payment made by Purchaser to a
Transferred Employee in respect of any retention, change in control or similar
agreement or obligation entered into or otherwise agreed upon prior to the
Closing or any Performance Bonus.


 


(d)         Liabilities.  Except as set forth in Section 2.5(a)(vii) through
2.5(a)(xii) from and after the Closing Date, Purchaser shall, or shall cause
its Affiliates to, (i) honor, pay, perform and satisfy any and all
Liabilities, obligations and responsibilities to, or in respect of, each Transferred
Employee arising, before or upon the Closing Date, under applicable Law or
under 


 


44

















 


the terms of any employment,
consulting, severance or similar agreement or obligation in accordance with the
terms thereof; and (ii) assume, honor and be solely responsible for
paying, providing and satisfying when due (A) all vacation, personal days,
sick pay and other paid time off for Transferred Employees earned or accrued
but unused as of the Closing Date, on terms and conditions not less favorable
than the terms and conditions in effect immediately prior to the Closing Date,
and (B) all compensation (including salary, wages, commissions, bonuses,
incentive compensation, overtime, premium pay and shift differentials),
vacation, personal days, sick pay and other paid time off, benefits and benefit
claims, severance and termination pay, notice and benefits under all applicable
Laws and under any Benefit Plan, collective bargaining agreement, or other
plan, policy, practice or agreement and all other Liabilities, in each case
accruing, incurred or arising as a result of employment or separation from
employment with Purchaser or its Affiliates after the Closing Date with respect
to Transferred Employees.


 


(e)          Tax-Qualified
Plans.  Each Transferred Employee who
is a participant in the Tyco Electronics Retirement Savings and Investment Plan
(the “Tyco Electronics Savings Plan”) shall cease to be an active
participant under such plan effective as of the Closing Date, and each Conveyed
Entity shall cease to be a participating employer in the Tyco Electronics
Savings Plan effective as of the Closing Date. 
Effective as of the Closing Date, Purchaser shall have, or shall cause
its Affiliates to have, in effect a defined contribution plan that is qualified
under Section 401(a) of the Code and that includes a qualified cash
or deferred arrangement within the meaning of Section 401(k) of the
Code with terms and conditions not substantially less favorable than those
provided under the Tyco Electronics Savings Plan (the “Purchaser Savings
Plan”) in which Transferred Employees shall be eligible to
participate.  Effective as of the Closing
Date, each Transferred Employee shall become fully vested in his or her account
balance in the Tyco Electronics Savings Plan. 
As soon as practicable, but no later than sixty (60) days, following the
Closing Date, the Tyco Electronics Savings Plan shall transfer to the Purchaser
Savings Plan, and Purchaser agrees to cause the Purchaser Savings Plan to accept,
the account balance (including promissory notes evidencing all outstanding
loans and subject to any qualified domestic relations orders pursuant to Section 414(p) of
the Code) of each Transferred Employee under the Tyco Electronics Savings Plan
as of the valuation date next preceding the date of transfer.  Such transfer shall be subject to Seller’s
receipt of evidence satisfactory to Seller that the Purchaser Savings Plan is
qualified under Sections 401(a) and 401(k) of the Code, which
evidence may include a current determination letter from the IRS indicating
that the Purchaser Savings Plan is qualified under Sections 401(a) and 401(k) of
the Code.  Following such transfer,
Purchaser shall, or shall cause its Affiliates to, assume all Liabilities of
Seller and its Affiliates under the Tyco Electronics Savings Plan to provide
benefits to or on behalf of the Transferred Employees to the extent of the
account balances so transferred, and neither the Tyco Electronics Savings Plan
nor Seller or its Affiliates shall have any obligation to Purchaser or any of
its Affiliates or with respect to any Transferred Employee with respect
thereto.


 


(f)            Certain
Welfare Plan Matters.  Following the
Closing Date, Purchaser shall use its best efforts (i) to ensure that no
waiting periods, exclusions or limitations with respect to any pre-existing
conditions, evidence of insurability or good health or actively-at-work
exclusions are applicable to any Transferred Employees or their dependents or
beneficiaries under any welfare benefit plans in which such Transferred
Employees may be eligible to participate and (ii) to provide or cause to
be provided that any costs or expenses incurred by the Transferred Employees
(and their respective dependents and beneficiaries) up to (and including) 


 


45

















 


the Closing Date shall be
specifically applied for purposes of satisfying applicable deductible,
co-payment, coinsurance, maximum out-of-pocket provisions and like adjustments
or limitations on coverage under any such welfare benefit plans.  Purchaser shall be responsible under its
employee welfare benefit plans for all amounts payable by reason of claims
incurred by Transferred Employees and their eligible dependents and
beneficiaries after the Closing Date.


 


(g)         Cafeteria
Plan.  Purchaser shall have in
effect, or cause to be in effect, as of the Closing Date, flexible spending
reimbursement accounts under a cafeteria plan qualifying under Section 125
of the Code (the “Purchaser Cafeteria Plan”) that provides benefits to
Transferred Employees not substantially less favorable than those provided by
the flexible spending reimbursement accounts under the cafeteria plans in which
such Transferred Employees are eligible to participate as of the date hereof
(the “Tyco Electronics Cafeteria Plan”). 
As soon as practicable following the Closing Date, Seller shall cause to
be transferred to Purchaser an amount in cash equal to the excess of the
aggregate accumulated contributions to the flexible spending reimbursement
accounts under the Tyco Electronics Cafeteria Plan made during the year in
which the Closing Date occurs by the Transferred Employees over the aggregate
reimbursement payouts made for such year from such accounts to such Transferred
Employees; provided, however, that, if the aggregate payouts from
the flexible spending reimbursement accounts made during the year in which the
Closing Date occurs to such Transferred Employees exceed the aggregate
accumulated contributions to such accounts for such year by such employees,
Purchaser shall cause such excess to be transferred to Seller as soon as
practicable following the Closing Date. 
Purchaser shall cause such amounts to be credited to each such
Transferred Employees’ corresponding accounts under the Purchaser Cafeteria
Plan in which such employees participate following the Closing Date.  On and after the Closing Date, Purchaser
shall assume and be solely responsible for all claims for reimbursement by Transferred
Employees, whether incurred prior to, on or after the Closing Date, that have
not been paid in full as of the Closing Date, which claims shall be paid
pursuant to and under the terms of the Purchaser Cafeteria Plan, and Purchaser
shall indemnify and hold harmless Seller and its Affiliates from any and all
claims by or with respect to Transferred Employees for reimbursement under the
Tyco Electronics Cafeteria Plan that have not been paid in full as of the
Closing Date.  Purchaser agrees to cause
the Purchaser Cafeteria Plan to honor and continue through the end of the
calendar year in which the Closing Date occurs the elections made by each
Transferred Employees under the Tyco Electronics Cafeteria Plan in respect of
the flexible spending reimbursement accounts that are in effect immediately
prior to the Closing Date.


 


(h)         Supplemental
Life and Long Term Disability. 
Effective on and for at least twelve (12) months after the Closing Date,
Purchaser shall, or shall cause its Affiliates to, offer Transferred Employees
coverage for supplemental life insurance and provide Transferred Employees with
long-term disability policies that are not substantially less favorable than
those offered by Seller and that cover Transferred Employees as of the date
hereof, and Purchaser shall indemnify and hold harmless Seller and its
Affiliates from any Liabilities, costs or expenses with respect to such
policies.  For the avoidance of doubt,
Seller shall be responsible for Business Employees and Former Employees who are
receiving long-term disability benefits.


 


(i)             Credited
Service.  With respect to each
employee benefit plan, policy or practice, including severance, vacation and
paid time-off plans, policies or practices, sponsored or maintained by
Purchaser or its Affiliates, Purchaser shall recognize, for all Transferred 


 


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Employees from and after the
Closing Date, credit for all service with the Asset Selling Entities, the
Conveyed Entities and their respective predecessors, prior to the Closing Date
for all purposes (including eligibility to participate, vesting credit,
eligibility to commence benefits, benefit accrual, early retirement subsidies
and severance).


 


(j)             No
Third Party Beneficiaries.  This
Agreement shall inure exclusively to the benefit of and be binding upon the
parties hereto and their respective successors, assigns, executors and legal
representatives.  Without limiting the
generality of Section 11.6, nothing in this Section 5.5(j), express
or implied, is intended to constitute an amendment to any Benefit Plan or
confer on any person other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations or Liabilities under
or by reason of this Agreement.


 


Section 5.6                                      EU Business
Employees.  (a) Transfer via
Transfer Regulations.  With respect
to any EU Business Employees who are not employed by Conveyed Entities, the
Parties agree that the purchase of the Business of any EU Asset Selling Entity
pursuant to this Agreement will constitute a “relevant transfer” for the
purposes of the Transfer Regulations and any applicable Laws, and accordingly,
Purchaser or any relevant Affiliate of Purchaser shall employ each such EU
Business Employee with effect from the Closing Date, as provided in the
Transfer Regulations or any applicable Laws. 
Notwithstanding the foregoing, with respect to such EU Business
Employees, such transfer shall be on terms and conditions of employment that
are not less favorable than the terms and conditions of employment provided to
the EU Business Employees immediately prior to the Closing Date.  Notwithstanding the foregoing, and except to
the extent required by Law, Purchaser shall not be obligated to establish a
defined benefit retirement plan or arrangement for any EU Business Employees or
any other Transferred Employees.  If any
EU Business Employees or any other Transferred Employees were covered by a
defined benefit arrangement of Seller immediately prior to the Closing,
Purchaser shall establish as of the Closing Date a defined contribution
arrangement for the benefit of such employees that provides reasonably
comparable benefits, taking into account the difference in plan design, or such
greater benefits as may be required by Law. 
For a period of at least twelve (12) months following the Closing Date,
Purchaser covenants and agrees to, or to cause its Affiliates to, continue to
provide each EU Business Employee (including, for the avoidance of doubt, EU
Business Employees employed by Conveyed Entities) with the terms and conditions
of employment described in this Section 5.6(a).


 


(b)         Indemnity.  Purchaser shall indemnify and hold harmless
Seller and its Affiliates from any and all Losses incurred prior to, on or
after the Closing Date as a result of, arising out of, or in connection with (i) the
EU Business Employees before the Closing Date in respect of any breach of the
information and consultation provisions of the Transfer Regulations by
Purchaser or any Affiliate of Purchaser; (ii) any claim by an EU Business
Employee (whether or not such EU Business Employee resigns and/or objects to
becoming employed by Purchaser under the Transfer Regulations) that any EU
Asset Selling Entity is in breach of contract and/or in breach of any statutory
employment rights because of any change in, or any plans of Purchaser (or any
relevant Affiliate of Purchaser) to change, any terms and conditions of
employment or working conditions of any EU Business Employee after the Closing
Date; and (iii) the EU Business Employees on and after the Closing Date
and, to the extent the obligation giving rise to such Losses constituted an
Assumed Liability under Section 2.4(g), before the Closing Date.  From and after the Closing Date, Purchaser
shall, or shall cause its Affiliates to, honor, pay, 


 


47

















 


perform and satisfy any and all
Liabilities, obligations and responsibilities to, or in respect of, each EU
Business Employee arising, before or upon the Closing Date, under applicable
law or under the terms of any employment, consulting, severance, information
and/or consultation or similar agreement or other obligation, in accordance
with the terms thereof.  The indemnity
provided in this Section 5.6(b) shall not duplicate any obligation of
Purchaser pursuant to Article VIII of this Agreement, and shall be
governed by the provisions of such Article to the extent applicable.


 


(c)          Non-Transfer
of EU Business Employees.  If the
contract of employment of any EU Business Employee is found (or alleged) not to
have effect after the Closing Date as if originally made with Purchaser,
Purchaser agrees that (i) in consultation with Seller, it will within
seven (7) days of being informed of such finding or allegation make to the
relevant EU Business Employee an offer in writing to employ him or her under a
new contract of employment to take effect on the termination referred to below
and (ii) any such offer made by Purchaser will be on terms and conditions
which taken as a whole do not differ in any material way from the terms and
conditions of employment of that EU Business Employee immediately before the
Closing Date (save as to the identity of the employer).  Upon that offer being made (or at any time
after the offer should have been made if no offer is made) the relevant EU
Asset Selling Entity shall terminate the employment of the relevant EU Business
Employee, and Purchaser shall indemnify and hold harmless Seller and its
Affiliates from any Losses arising directly or indirectly out of the employment
of that EU Business Employee from the Closing Date until such termination and
the termination of such employment.


 


(d)         No
Third Party Beneficiaries.  This
Agreement shall inure exclusively to the benefit of and be binding upon the
parties hereto and their respective successors, assigns, executors and legal
representatives.  Without limiting the
generality of Section 11.6, nothing in this Section 5.6, express or
implied, is intended to constitute an amendment to any Benefit Plan or confer
on any person other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement.


 


Section 5.7                                      Wage Reporting.  Purchaser and Seller shall utilize, or cause
their Affiliates to utilize, the standard procedure set forth in Section 4
of Rev. Proc. 2004-53, with respect to United States wage reporting.


 


Section 5.8                                      Bulk Transfer
Laws.  Purchaser acknowledges that
the Seller Entities have not taken, and do not intend to take, any action
required to comply with any applicable bulk sale or bulk transfer Laws or
similar Laws.  Seller agrees to indemnify
and hold harmless Purchaser from and against any and all Liabilities incurred
that arise out of or result from the failure of Seller and Purchaser to comply
with or perform any actions in connection with the provisions of any such Law.


 


Section 5.9                                      Seller’s Marks.  Immediately upon the Closing, Purchaser shall
cause each division of the Business and each Conveyed Entity (each, a “Purchased
Division”) to change its name to a name that does not include “Tyco”, “Tyco
Electronics”, any of the Seller’s Marks or any derivatives thereof or anything
confusingly similar thereto and Purchaser, each Affiliate thereof, the
Purchased Division(s) and their respective directors, officers, successors,
assigns, agents or representatives shall not register or attempt to register,
and, except as 


 


48

















 


otherwise set forth in this Section 5.9,
shall not directly or indirectly use, in any fashion, including in signage,
corporate letterhead, business cards, Internet websites, marketing material and
the like (collectively, “Materials”), or seek to register, in connection
with any products or services anywhere in the world in any medium, any name,
mark or symbol that includes, is identical to or is confusingly similar to, any
of the trademarks, service marks, domain names, trade names or other indicia of
origin set forth on Schedule 5.9 of the Seller Disclosure Letter or any
other indicia of origin characterized as an Excluded Asset under this Agreement
(collectively, “Seller’s Marks”), nor shall any of them challenge or
assist any third party in opposing the rights of Seller or any Affiliate of
Seller anywhere in the world in any such Intellectual Property.  For the avoidance of doubt, in no event shall
any of the Transferred Intellectual Property be deemed to constitute
Intellectual Property that includes, is identical to or is confusingly similar
to, any of Seller’s Marks.  Purchaser
acknowledges and agrees that no right or grant is provided for herein for
Purchaser or any Purchased Division to (i) use the Seller’s Marks alone or
in combination with any other mark, name or term or (ii) grant sublicenses
to the Seller’s Marks for any purpose whatsoever.  Subject to the restrictions set forth herein,
Seller hereby grants to Purchaser effective as of the Closing Date a personal,
nonexclusive, royalty-free license for nine (9) months  after
the Closing Date, to use tools, dies and molds acquired by Purchaser hereunder
which carry one or more of the Seller’s Marks to be cast, struck or molded into
Inventory.  Purchaser shall in any event
phase out such use of such tools, dies and molds as soon as is reasonably
practicable and, in particular, shall if practicable remove the cast for such
marks from each such tool, die or mold on the first occasion after the Closing
Date when such tool, die or mold is refurbished.  Notwithstanding the foregoing, Seller hereby
grants to Purchaser, effective as of the Closing Date, a royalty-free license
to use Seller’s Marks solely with respect to Inventory, shipping materials
(other than labels and other printed shipping documents) and product catalogues
in existence as of the Closing Date. 
Such limited license shall terminate nine (9) months after the
Closing Date regardless of whether or not Inventory or Materials branded with
Seller’s Marks remain in Inventory or the possession of Purchaser or any
Purchased Division.  Inventory and
Materials subject to this license do not need to be rebranded if sold or used
prior to termination of the nine-month license period.  All use of Seller’s Marks as permitted
hereunder shall inure to the benefit of Seller. 
Purchaser shall ensure that immediately following the Closing Date any
hypertext links to Internet websites operated by Seller or its Affiliates and
any other use of Seller’s Marks are removed from any Internet web sites
operated by any Purchased Division or included in the Purchased Assets.


 


Section 5.10                                Resale or Other
Exemption Certificates.  At the
Closing (or within such reasonable time thereafter as may be necessary to
perfect the resale or other exemption certificates), Purchaser shall deliver to
Seller fully completed and executed resale exemption certificates or other
applicable exemption certificates for all states and localities identified by
Seller in Schedule 5.10 of the Seller Disclosure Letter as jurisdictions
in which Inventory is to be transferred. 
To the extent any jurisdiction refuses to accept any resale exemption
certificate or other applicable exemption certificate provided by Purchaser,
Seller and Purchaser agree that any Transfer Taxes (and related interest and
penalty) assessed by such jurisdiction shall be borne by Purchaser and Seller
as described in Article VII.


 


Section 5.11                                Post-Closing
Information.  For a period of seven (7) years
following the Closing, upon written request delivered to Purchaser, Purchaser
shall, and Purchaser shall cause the Conveyed Entities and the Affiliates of
Purchaser to afford to Seller 


 


49

















 


and its Representatives
reasonable access during regular normal business hours, upon reasonable advance
notice subject restrictions under applicable Law, to the properties, books and
records and employees of Purchaser, the Conveyed Entities and the Affiliates of
Purchaser with respect to the Business to the extent necessary to prepare or
defend any judicial or administrative proceeding related to the Business or to
enable Seller and its Representatives to satisfy Seller’s and its Affiliates’
financial reporting and Tax planning, preparation and reporting obligations.


 


Section 5.12                                Indemnification of
Officers and Directors.  The
certificate of incorporation, bylaws or other comparable organizational
documents of each of the Conveyed Entities shall contain provisions no less
favorable with respect to indemnification for acts or omissions by officers and
directors in their capacities as such at any time prior to the Closing than are
set forth in such documents immediately prior to the Closing, which provisions
shall not be amended, repealed or otherwise modified for a period of six (6) years
after the Closing in any manner that would adversely affect the rights
thereunder of individuals who at or prior to the Closing were present or former
directors or officers of the Conveyed Entities at the Closing (each, together
with such person’s heirs, executors or administrators, a “Conveyed Entity
Covered Person”) relating to service prior to the Closing.  Seller agrees that it will maintain “run-off”
coverage for Conveyed Entity Covered Persons that covers acts or omissions
prior to the Closing.  Purchaser agrees
that after the Closing Date, the Conveyed Entity Covered Persons will be
covered by any directors’ and officers’ liability insurance policy purchased by
Purchaser or an Affiliate of Purchaser, to the extent any such policy exists
and is not a “tail policy” acquired in connection with the acquisition of a
company and limited exclusively to the directors and officers of such company
prior to its acquisition. The rights of each Conveyed Entity Covered Person
hereunder shall be in addition to, and not in limitation of, any other rights
such Conveyed Entity Covered Person may have under the certificate of
incorporation, bylaws or other comparable organizational documents of each of
the Conveyed Entities, any other indemnification arrangement, applicable Laws
or otherwise.  The provisions of this Section 5.12
shall survive the consummation of the transactions contemplated hereby and are
expressly intended to benefit each Conveyed Entity Covered Person.


 


Section 5.13                                Replacement of
Certain Obligations  (a) Prior
to the Closing Date, Purchaser shall use its reasonable best efforts to,
effective as of the Closing Date, (i) cause to be terminated each of the
parent guarantees listed on and described in Schedule 5.13(a)(i) of
the Seller Disclosure Letter or any guarantees entered into after the date
hereof in the ordinary course of the Business (including renewals and
extensions of any of the foregoing) (the “Parent Guarantees”), (ii) replace
the surety and other bonds set forth on Schedule 5.13(a)(ii) of the
Seller Disclosure Letter or any surety and other bonds issued after the date
hereof with respect to the Business (including renewals and extensions of any
of the foregoing) (the “Seller Surety Bonds”), and (iii) replace
the letters of credit set forth on Schedule 5.13(a)(iii) of
the Seller Disclosure Letter or any letters of credit issued after the date
hereof in the ordinary course of the Business (the “Parent LofCs”) and
terminate any reimbursement obligations or other Contracts between and among
Seller and its Affiliates (other than the Conveyed Entities), on the one hand,
and the beneficiary of any such Parent Guarantee or the provider of any such
Seller Surety Bond or any such Parent LofC, on the other hand, in each case
that relates to any such Parent Guarantee, Seller Surety Bond or Parent LofC
(each, a “Related Obligation or Contract”).  In the event that any such Parent Guarantee,
Seller Surety Bond, Parent LofC or Related Obligation or Contract remains
outstanding as of the Closing Date, Purchaser shall deliver to Seller at the 


 


50

















 


Closing an unconditional letter
of credit in form and substance satisfactory to Seller in its sole and absolute
discretion from a bank or other financial institution acceptable to Seller in
its sole and absolute discretion for (A) in the case of any such Parent
Guarantee, the aggregate amount that may be payable under such Parent
Guarantee, (B) in the case of any such Seller Surety Bond, the aggregate
amount that may be payable under such Seller Surety Bond, (C) in the case
any such Parent LofC, the amount of such Parent LofC, and (D) in the case
of any such Related Obligation or Contract, the aggregate amount that may be
payable under such Related Obligation or Contract.


 


(b)         To
the extent Purchaser is unable to terminate or replace a Parent Guarantee,
Seller Surety Bond, Parent LofC or Related Obligation or Contract as
contemplated by Section 5.13(a), Purchaser shall have a continuing
obligation after the Closing to use its reasonable best efforts to have any
such Parent Guarantee, Seller Surety Bond, Parent LofC or Related Obligation or
Contract terminated or replaced as contemplated by Section 5.13(a).  To the extent that Seller or any of its
Affiliates has performance obligations under any such Parent Guarantee, Seller
Surety Bond or Parent LofC or Related Obligation or Contract, Purchaser and its
Affiliates shall use their respective reasonable best efforts to perform such
obligations on behalf of such party or otherwise take such action as reasonably
requested by Seller so as to put such party in the same position as if
Purchaser (or its Affiliates), and not such party, had performed or were
performing such obligations.  Purchaser
shall not, and shall not permit the Business, to enter into any amendment or
waiver with respect to, or exercise any renewal option or other similar
provision under, any Contract, agreement, lease or other arrangement that
pertains to a Parent Guarantee, Seller Surety Bond, Parent LofC or Related
Obligation or Contract that has the effect of extending the term of such
Contract, agreement, lease or other arrangement beyond its current term or
otherwise increasing the exposure under the applicable Parent Guarantee, Seller
Surety Bond, Parent LofC or Related Obligation or Contract or under any such
Contract, agreement, lease or other arrangement.  Neither Seller nor any of its Affiliates
shall have any obligation to extend the term, or otherwise agree to any
amendment or waiver, of any Parent Guarantee, Seller Surety Bond, Parent LofC
or any Related Obligation or Contract that remains outstanding after the
Closing.


 


Section 5.14        Exclusive Dealing.  (a) During the period from the date of
this Agreement until the earlier of (i) the date this Agreement is
terminated in accordance with its terms and (ii) the Closing Date, Seller
shall not take, and shall cause the Seller Entities and their respective
Affiliates and Representatives to refrain from taking, any action, directly or
indirectly, to solicit or engage in discussions or negotiations with, or
provide any information to, any Person, other than Purchaser (and its Affiliates
and the Bidder Representatives), concerning the purchase of the Business, the
Equity Interests or the Purchased Assets (whether by asset sale, stock sale,
merger, recapitalization or other transaction).


 


(b)         Immediately
following the execution of this Agreement, Seller shall, and shall cause its
Affiliates, and each of their respective Representatives to terminate any
existing discussions or negotiations with any Persons, other than Purchaser
(and its Affiliates and the Bidder Representatives), concerning the purchase of
the Business, the Equity Interests or the Purchased Assets.


 


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Section 5.15           No
Hire and Non-Solicitation of Employees. 
(a) Neither Seller nor any of its controlled Affiliates will at any
time prior to two (2) years from the Closing Date, directly or indirectly,
(i) solicit the employment or services (whether as an employee,
consultant, independent contractor or otherwise) of any of the Transferred
Employees specified on Schedule 5.15(a) of the Seller Disclosure
Letter without Purchaser’s prior written consent or (ii) hire in any
capacity (whether as an employee, consultant, independent contractor or
otherwise) any of the Transferred Employees specified on Schedule 5.15(a) of
the Seller Disclosure Letter, who is not terminated by Purchaser or any of its
Affiliates subsequent to the Closing, without Purchaser’s prior written
consent.


 


(b)   Neither Purchaser nor any of its controlled
Affiliates will at any time prior to two (2) years from the Closing Date,
directly or indirectly, (i) solicit the employment or services (whether as
an employee, consultant, independent contractor or otherwise) of any of the
employees of Seller and its Affiliates specified on Schedule 5.15(b) of
the Seller Disclosure Letter without Seller’s prior written consent or (ii) hire
in any capacity (whether as an employee, consultant, independent contractor or
otherwise) any of the employees of Seller and its Affiliates specified on
Schedule 5.15(b) of the Seller Disclosure Letter, who is not terminated by
Seller or any of its Affiliates subsequent to the Closing, without Seller’s
prior written consent.


 


(c)   The Parties acknowledge and agree that
notwithstanding Section 5.15(a), as of the date hereof, Schedule 5.15(a) of
the Seller Disclosure Letter does not contain the names of specific Transferred
Employees but instead contains a list of job categories encompassing the
Transferred Employees in respect of whom Seller and its Affiliates will be
obligated under Section 5.15(a). 
The Parties agree that they will cooperate in good faith between the
date hereof and the Closing Date to modify Schedule 5.15(a) of the
Seller Disclosure Letter so that such Schedule consists of a list of
Transferred Employee names rather than categories of Transferred Employees
(which list of Transferred Employee names will for the avoidance of doubt be
derived from the job categories set forth on such Schedule as of the date
hereof).


 


(d)   For purposes of this Section 5.15, the
term “solicit the employment or services” shall not be deemed to include
generalized searches for employees through media advertisements of general
circulation, employment search firms, open job fairs or otherwise; provided,
that, such searches are not focused or targeted on the employees described on Schedule
5.15(a) or Schedule 5.15(b) of the Seller Disclosure
Letter, as applicable.


 


Section 5.16           Post-Closing
Obligations for Leases.  Purchaser
shall not, without the prior written consent of Seller, exercise any right with
regard to, or enter into, any amendment, renewal, modification or waiver of any
Real Property Lease that could extend the term thereof beyond its then-current
term with respect to any Real Property Lease as to which Seller or one of its
Affiliates remains the leasing party, or a guarantor, or is otherwise
secondarily liable for the obligations of the lessee, under such lease.  Notwithstanding the foregoing, with respect
to any Real Property Lease that involves a month-to-month tenancy and with
respect to which Seller or one of its Affiliates remains the leasing party, or
a guarantor or is otherwise secondarily liable, in no event shall Purchaser
extend such Real Property Lease (or otherwise continue or renew such
month-to-month tenancy) later than the date that is twelve (12) months after
the Closing Date.  Nothing in this
Agreement shall be deemed to prevent Purchaser from seeking a novation of, or
entering into a new lease for the Leased Real Property relating to,


 


52

















 


any Real
Property Lease as to which Seller remains the leasing party, or a guarantor, or
is otherwise secondarily liable for the obligations of the lessee under such
lease so long as such novation or new lease contains a full release of all
obligations of Seller and/or its Affiliate, as the case may be, under such Real
Property Lease.


 


Section 5.17           Purchaser
Trademarks and Trade Names. 
Following the Closing, Purchaser hereby grants to Seller (i) a
three year, exclusive  worldwide,
fully-paid and royalty-free license under the “M/A-COM”
name (the “Licensed Mark”) to use, reproduce and affix the Licensed Mark
in connection with products manufactured by or on behalf of Seller and its
Affiliates in the field of land mobile radio. 
To the extent Seller uses the Licensed Mark in connection with general
marketing materials, including any advertising, brochures or other marketing
materials displayed or distributed at trade shows, in a manner that could
reasonably be expected to result in confusion among customers of Seller and
Purchaser, respectively, Seller shall use the Licensed Mark in combination with
other distinguishing marks, language or means of identification (e.g., use the TYCO ELECTRONICS mark or the
word “wireless” in close proximity to the Licensed Mark).  In addition to, and without limiting, the
foregoing rights, Purchaser hereby grants to Seller and its Affiliates a
non-exclusive, worldwide, fully-paid and royalty-free license under the
Licensed Mark and any other trademarks, service marks, domain names, trade
names or other indicia of origin included in the Transferred Intellectual
Property (i) to use the Licensed Mark or such other trademarks, service
marks, domain names, trade names or other indicia of origin included in the
Transferred Intellectual Property in any marketing materials existing on the
date of the Closing until the time that such marketing materials are consumed
in the ordinary course of business and (ii) for nine (9) months after
the Closing Date  to use tools,
dies and molds which carry the Licensed Mark or such other trademarks, service
marks, domain names, trade names or other indicia of origin included in the
Transferred Intellectual Property and to market and sell any Inventory created
with such tools, dies or molds.  Seller
acknowledges that the products manufactured by or on behalf of Seller and its
Affiliates in the field of land mobile radio and in respect of which the
Licensed Mark or such other trademarks, service marks, domain names, trade
names or other indicia of origin included in the Transferred Intellectual
Property are used, reproduced or affixed shall be of a quality and nature
comparable to such products manufactured by or on behalf of such businesses
prior to the Closing.


 


Section 5.18           Novation
and Assignment of Assumed Contracts.


 


(a)   Purchaser and Seller shall cooperate in
seeking the transfer (by novation or assignment) of all Assumed Contracts from
Seller or any Seller Entity to Purchaser, effective as of or as soon as
practicable after the Closing Date. 
Seller will appoint an individual who has experience in contract
management to assist Purchaser in the novation and assignment process.  For each Government Contract that is an
Assumed Contract directly between Seller and any one or more U.S. Governmental
Authorities, Seller and Purchaser shall use commercially reasonable efforts to
obtain the consents and approvals of the other party or parties to that
Government Contract to novate the obligations and rights to Purchaser,
consistent with 48 C.F.R. § 42.1204 et seq.  For each other Assumed Contract, Seller and
Purchaser shall use commercially reasonable efforts to obtain all required
consents and approvals of the other party or parties to such other Assumed
Contract to novate such Assumed Contract, and if such novation cannot be
obtained, Seller and Purchaser shall use commercially reasonable efforts to
obtain all required consents 


 


53

















 


and approvals of the other
party or parties to such other Assumed Contract for the assignment of such
other Assumed Contract, it being understood that neither Seller nor any of its
Affiliates shall be required to expend money, commence any litigation or offer
or grant any accommodation (financial or otherwise) to any third party to
obtain such consents and approvals. 
Nothing in this Agreement shall be deemed to constitute a novation or
assignment of any Assumed Contract if the attempted novation or assignment
thereof without the consent of the other party or parties thereto would
constitute a breach thereof, would be ineffective with respect to any party or
parties to such Assumed Contract or affect the rights of the applicable Seller
Entity thereunder.


 


(b)   In the event that the transfer of one or more
Assumed Contracts as described in this Section 5.18 cannot be made, or if
such attempted novation or assignment would give rise to any right of
termination, or would otherwise adversely affect the rights of the applicable
Seller Entity or Purchaser under such Assumed Contract, or would not novate or
assign all of the applicable Seller Entity’s rights thereunder at the Closing,
from and after the Closing, Seller and Purchaser shall continue to cooperate
and use commercially reasonable efforts to obtain all consents and approvals
required to provide Purchaser with all such rights.  To the extent that any such consents and
waivers are not obtained, or until the impediments to such novation or
assignment are resolved, to the extent permitted by applicable Law and the
terms of such Assumed Contract, Seller shall and shall cause the Seller
Entities to use commercially reasonable efforts (but without any obligation to
expend money, commence any litigation or offer or grant any accommodation
(financial or otherwise)) to (i) provide to Purchaser, at the request of
Purchaser, the benefits of any such Assumed Contract to the extent related to
the Business, including entering into a subcontract with Purchaser for the
performance of such Assumed Contract until such Assumed Contract is transferred
in accordance with Section 5.18(a); (ii) cooperate in any lawful
arrangement designed to provide such benefits to Purchaser and take all necessary
steps and actions to provide Purchaser with the benefits of such Assumed
Contract and to relieve the applicable Seller Entity of the performance and
other obligations thereunder; and (iii) enforce, at the request of and for
the account of Purchaser, any rights of any Seller Entity arising from any such
Assumed Contract against any third party (including any Governmental Authority)
including the right to elect to terminate in accordance with the terms thereof
upon the advice of Purchaser.  To the extent
that Purchaser is provided the benefits of any Assumed Contract referred to in
this Section 5.18 (whether from Seller or otherwise), Purchaser shall
perform on behalf of the applicable Seller Entity and for the benefit of any
third party (including any Governmental Authority) the obligations of the
applicable Seller Entity thereunder. 
Purchaser agrees to pay, perform and discharge, and defend and indemnify
Seller and its Affiliates against and hold Seller and its Affiliates harmless
from, all Liabilities of Seller and its Affiliates relating to such performance
or failure to perform, and in the event of a failure of such indemnity, Seller
and its Affiliates shall cease to be obligated under this Agreement with
respect to the Assumed Contract that is the subject of such failure.  This Section 5.18 shall also apply to
any Real Property Lease, Equipment Lease, Intellectual Property License, Permit
or right as if such contract, permit or right was an Assumed Contract.


 


Section 5.19    CFIUS Notification.  Seller and Purchaser shall cooperate in the
preparation of a voluntary joint filing of notice of the transaction to the
CFIUS and any requested supplemental information (collectively, the “Joint
Notice”) pursuant to 31 C.F.R. Part 800 and the Foreign Investment and
National Security Act of 2007, P.L. 110-49, 121 Stat. 246, 259 


 


54

















 


(“FINSA”).  Purchaser shall take the lead in preparing
the Joint Notice, and Seller shall provide for inclusion in the Joint Notice
all statements called for by 31 C.F.R. § 800.402(c)(2) through
(c)(4).  Purchaser shall not file any
such Joint Notice without Seller’s consent. 
Purchaser shall take the lead in responding to any post-filing requests
from the CFIUS or any Governmental Authority that may relate to representations
or proposed agreements by Purchaser. 
Seller and Purchaser shall keep one another informed in a timely manner
of communication with any CFIUS or any Governmental Authority with respect to
the Joint Notice and each shall provide the other the opportunity to
participate in such communication.  If at
any point in the CFIUS review process, the CFIUS offers the Parties an
opportunity to withdraw and resubmit the Joint Notice, and either Seller or
Purchaser opts to request withdrawal and resubmission in response to such offer
by the CFIUS, then the other Party shall agree to join the request for
withdrawal and resubmission.


 


Section 5.20   Termination of Intercompany Contracts.  Prior to the Closing,
Seller shall, and shall cause each of the Seller Entities to, and shall cause
the counterparties thereto to, execute and deliver a termination and release
agreement with respect to any Contract with respect to the Business between
Seller and its Affiliates (other than the Business), on the one hand, and the
Business, on the other hand, except for those Contracts that are (i) set
forth in Schedule 5.20 to the Seller Disclosure Letter or (ii) specifically
contemplated by this Agreement.


 


Section 5.21        Collection
of Accounts Receivable.  Seller shall
forward promptly to Purchaser any monies, checks or instruments received by
Seller after the Closing with respect to the accounts receivable purchased by
Purchaser from Seller pursuant to this Agreement.


 


Section 5.22        Assumed
Liabilities Covered by Tyco Electronics Insurance.  With respect to events relating to the
Assumed Liabilities that occurred or existed prior to the Closing Date that are
covered by Seller’s or its Affiliates’ occurrence-based third-party liability
insurance policies, Purchaser may make claims under such policies to the extent
such coverage and limits are available under such policies; provided, however,
that Seller shall not be required to pay any amount to Purchaser pursuant to
this Section 5.22 unless and until it has received payment associated with
claims under such policies from the third-party insurer (net of any
deductible).  Purchaser and Seller shall
cooperate in connection with making such claim and each Party shall provide the
other with all reasonably requested information necessary for Seller to make
such claim.  Seller agrees to take
actions that it believes in good faith are commercially reasonable to permit
Purchaser to make claims under such insurance policies of Seller and its
Affiliates solely in respect of Liabilities that existed or occurred prior to
the Closing Date.


 


Section 5.23        Delivery
of Product Specifications.  Prior to
the Closing Date, Seller shall provide to Purchaser written product
specifications for each of the products to be supplied by Purchaser to Seller
pursuant to the terms of the Supply Agreement.


 


Section 5.24        Delivery
of the Tax Opinion.  No later than
12:01 a.m. on the day after the date hereof, Seller shall deliver to
Purchaser the Tax Opinion to satisfy the condition set forth in Section 6.3(d).


 


Section 5.25        Cork
Sublease. Prior to or upon the Closing, Purchaser (or its 


 


55

















 


Affiliate), as sublessee, shall
enter into a sublease (the “Cork Sublease”) with M/A-COM Eurotec B.V. or
an Affiliate, as sublessor, with respect to the entire premises located at
Building 4, Eastgate Road, Eastgate Business Park, Little Island, Cork,
Ireland, upon the same terms and conditions as the overlease with respect to
such premises (the “Cork Overlease”); provided the initial term
of the Cork Sublease shall be for five (5) years with successive options
to renew for a term of one (1) additional year at the election of
sublessee at least ninety (90) days in advance of the next scheduled expiration
date of the term (but in no event beyond the expiration of the term of the Cork
Overlease).  For the avoidance of doubt, Section 5.13
hereunder shall not be applicable to the Cork Sublease.  Each Party agrees to use its reasonable best
efforts to take, or cause to be taken, all actions necessary to obtain the
consent of the lessor under the Cork Overlease to the Cork Sublease, in the
most expeditious manner practicable, but without any requirement that any Party
expend any money to obtain such consent. 
If such consent is not obtained prior to the Closing, Purchaser (or its
Affiliate) shall be liable under the Cork Sublease as if such consent had been
granted and shall defend and indemnify the Seller Indemnitees and save and hold
each of them harmless against any Losses incurred by them as a result thereof.


 


ARTICLE
VI


 


CONDITIONS PRECEDENT


 


Section 6.1             Conditions
to the Obligations of Each Party. 
The respective obligations of Purchaser and Seller to consummate the
transactions contemplated hereby are subject to the satisfaction or waiver by
Purchaser or Seller, as appropriate, at or before the Closing Date, of each of
the following conditions:


 


(a)   Injunctions; Illegality.  The consummation of the transactions
contemplated hereby shall not be restrained, enjoined or prohibited by any
Order and there shall not have been any Law enacted, promulgated or deemed
applicable to the transactions contemplated hereby by any Governmental
Authority that prevents the consummation of such transactions or has the effect
of making such consummation thereof illegal.


 


(b)   Antitrust Laws Any applicable waiting
period (or any extension thereof) under Antitrust Laws relating to the
transactions contemplated by this Agreement shall have expired or been
terminated and any filings or approvals required under Antitrust Laws relating
to the transactions contemplated by this Agreement shall have been made or
obtained.


 


(c)   CFIUS. 
Purchaser and Seller or their respective counsel shall have received
written notice from CFIUS that the review of the transaction under Section 721
of the United States Defense Production Act of 1950, as amended by FINSA and
otherwise, has been concluded and that the President of the United States has
not announced his intention to suspend or prohibit the transaction or seek
divestment or other relief pursuant to the authority granted to him under the
Defense Production Act of 1950, as amended.


 


Section 6.2             Conditions
to the Obligations of Purchaser.  The
obligations of Purchaser to consummate the transactions contemplated hereby are
subject to the satisfaction or waiver by Purchaser on or prior to the Closing
Date of the following further conditions:


 


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(a)   Performance.  All of the material agreements and covenants
of Seller to be performed prior to the Closing pursuant to this Agreement shall
have been duly performed in all material respects.


 


(b)   Representations and Warranties.  The representations and warranties of Seller
contained in Article III shall be true and correct on and as of the
Closing Date as if made at and as of such date (other than those made as of a
specified date, which shall be true and correct in all respects on and as of
such specified date), except for such failures to be true and correct that do
not have, individually or in the aggregate, a Material Adverse Effect (it being
agreed that in determining whether such failures would, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect, any
materiality or Material Adverse Effect qualification in a particular
representation and warranty shall be disregarded except as set forth in Schedule
6.2(b) of the Seller Disclosure Letter).


 


(c)   Certificate. Purchaser shall have
received a certificate signed by Seller, dated as of the Closing Date, to the
effect that the conditions set forth in Sections 6.2(a) and (b) have
been satisfied.


 


(d)   No Material Adverse Effect.  Since the date of this Agreement, there shall
have been no Material Adverse Effect.


 


Section 6.3             Conditions
to the Obligations of Seller.  The
obligations of Seller to consummate the transactions contemplated hereby are
subject to the satisfaction or waiver by Seller on or prior to the Closing Date
of the following further conditions:


 


(a)   Performance.  All of the material agreements and covenants
of Purchaser to be performed prior to the Closing pursuant to this Agreement
shall have been duly performed in all material respects.


 


(b)   Representations and Warranties.  The representations and warranties of Purchaser
contained in Article IV shall be true and correct in all respects on and
as of the Closing Date as if made on and as of such date (other than those made
as of a specified date, which shall be true and correct in all respects on and
as of such specified date).


 


(c)   Certificate. Seller shall have
received a certificate signed by Purchaser, dated as of the Closing Date, to
the effect that the conditions set forth in Sections 6.3(a) and (b) have
been satisfied.


 


(d)   Tax Opinion.  Pursuant to a Tax Sharing Agreement, dated as
of June 29, 2007, by and among Seller, Tyco International Ltd. and
Covidien Ltd. (the “TSA”), Seller shall have received an unqualified “will”
opinion of qualified tax counsel under the TSA, which opinion in form and
substance is reasonably acceptable to Seller, Tyco International Ltd. and
Covidien Ltd. (the “Tax Opinion”) and upon which each of them may rely,
confirming either (i) that the transactions contemplated by this Agreement
will not, either separately or in conjunction with other actions taken by
Seller, result in any taxes being imposed on or in connection with the
distribution of Seller’s stock and the stock of Covidien Ltd. by Tyco
International Ltd. to its shareholders on June 29, 2007 or any
transactions undertaken in connection with such 


 


57

















 


distributions or (ii) that
the Tax Opinion is not required under the TSA with respect to the transactions
contemplated by this Agreement.


 


Section 6.4             Frustration
of Closing Conditions.  None of
Purchaser or Seller may rely on the failure of any condition set forth in this Article VI
to be satisfied if such failure was caused by such Party’s failure to act in
good faith or such Party’s failure to use its reasonable best efforts to cause the
Closing to occur as required by Section 5.3 or such Party’s compliance
with its obligations under Sections 5.3 or 5.4 or under any other provision of
this Agreement.


 


ARTICLE
VII


 


TAX MATTERS


 


Section 7.1             Allocation
of Taxes to Seller.  Seller shall be
responsible for and will pay or cause to be paid any and all of the following
(collectively, “Seller’s Taxes”):


 


(a)   all Taxes imposed on the Conveyed Entities
with respect to all periods of the Conveyed Entities that end on or before the
Closing Date and all Taxes imposed on Seller, the Equity Selling Entities and
the Asset Selling Entities;


 


(b)   all Income Taxes imposed on the Seller, the
Seller Entities and the Conveyed Entities under any consolidation, combination,
fiscal unity, or similar regime by any U.S. or foreign federal, state or local
Tax Law for all taxable periods or portions thereof of Seller or its Affiliates
that end on or before or include the Closing Date;


 


(c)   Seller’s portion of the Taxes for any
Straddle Period, as determined under Section 7.3;


 


(d)   fifty (50) percent of all Transfer Taxes; and


 


(e)   any Taxes imposed on Seller, the Conveyed
Entities, or the Equity Selling Entities as a result of the Section 338(h)(10) Election.


 


provided, however,
that (i) Seller’s Taxes shall not include any Taxes arising as a result of
actions taken by any Conveyed Entity, Purchaser, or any of their Affiliates
with respect to the Business, the Purchased Assets or any Conveyed Entity after
the Closing Date, and (ii) Seller’s Taxes shall not include any liability
for Taxes to the extent such Taxes are accrued Taxes described in Section 2.4(d).


 


Section 7.2             Allocation
of Taxes to Purchaser.  Purchaser
shall be responsible for, will pay or cause to be paid, and will indemnify
Seller and its Affiliates from and against (i) any and all Taxes of, or
relating to, the Business, the Conveyed Entities or the Purchased Assets with
respect to all periods that begin after the Closing Date, (ii) any and all
Taxes of, or relating to, the Business, the Conveyed Entities or the Purchased
Assets arising as a result of actions taken by any Conveyed Entity, Purchaser,
or any of their Affiliates after the effective time of the Closing, (iii) fifty
(50) percent of all Transfer Taxes and (iv) any and all accrued Taxes
described in Section 2.4(d).


 


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Section 7.3             Allocation
of Straddle Period Taxes.  (a) With
respect to any taxable period of a Conveyed Entity relating to Taxes that would
(absent an election) include, but not end until after, the Closing Date (a “Straddle
Period”), Seller may or may cause one or more of the Conveyed Entities, at
its sole option, to elect with any relevant Taxing Authority to close such
Straddle Period as of the end of the Closing Date.  As a result of such election, Taxes will be
allocated to Seller, on the one hand, and Purchaser, on the other hand,
pursuant to the provisions of Section 7.1 and Section 7.2,
respectively.


 


(b)   In any case where the Straddle Period of a
Conveyed Entity is not closed pursuant to the preceding Section 7.3(a),
Seller will be allocated any Income Taxes imposed on the Conveyed Entity for
the portion of the Straddle Period up to and including the Closing Date.  For purposes of this Section 7.3(b),
Income Taxes for the portion of a Straddle Period up to and including the
Closing Date will be determined based upon an interim closing of the books of a
Conveyed Entity as of 11:59 p.m. on the Closing Date based upon Tax
accounting methods, practices, and procedures last used by such Conveyed Entity
in preparing its Tax Returns.


 


(c)   As to any Tax other than an Income Tax or a
Transfer Tax for any Straddle Period, Seller will be allocated:


 


(i)          for any such Tax that is determined based upon specific
transactions (including, but not limited to, value added, sales, and use
Taxes), all such Taxes applicable to transactions that have been consummated
during the period through the end of the Closing Date; and


 


(ii)         for any such Tax that is not based upon specific
transactions (including, but not limited to, license, real property, personal
property, franchise and doing business Taxes), any such Tax equal to the full
amount of such Tax for the entire Straddle Period multiplied by a fraction, the
numerator of which is the number of days in the Straddle Period ending on the
Closing Date and the denominator of which is the number of days in the entire
Straddle Period.


 


Section 7.4             Tax
Returns; Payment of Taxes.  (a) Except
as set forth on Schedule 7.4(a) of the Seller Disclosure Letter,
Seller shall, and shall cause the Equity Selling Entities, the Asset Selling
Entities, and/or the Conveyed Entities to, prepare and file, or cause to be
prepared and filed, within applicable statutory limits and consistent with
prior practice, all Tax Returns of or which include the Conveyed Entities or
the Purchased Assets (including any amendments thereto) that are due to be
filed (giving effect to any extension of time to file) on or prior to the
Closing Date (the “Pre-Closing Period Tax Returns”).  Seller shall, and shall cause the Equity
Selling Entities and/or the Conveyed Entities to, pay all Taxes shown on such
Pre-Closing Period Tax Returns when due. 
To the extent that Seller or its Affiliates are required to file Tax
Returns with respect to Transfer Taxes, Seller shall, and shall cause the
Equity Selling Entities, the Asset Selling Entities, and/or the Conveyed
Entities to, permit Purchaser to review and comment on the portion of any Tax
Returns related to the determination of any Transfer Tax, and Seller shall, and
shall cause the Equity Selling Entities, the Asset Selling Entities, and/or the
Conveyed Entities to, make such revisions to such Tax Returns as are reasonably
requested by Purchaser.  Purchaser shall
pay over to Seller, no fewer than three (3) Business Days prior to the due
date of any such Transfer Tax Return, an amount of cash sufficient for the
payment of fifty 


 


59

















 


(50) percent
of any Taxes shown as due on such Tax Return and for which Purchaser bears
responsibility pursuant to Section 7.2 hereof.  Seller shall deliver or cause to be delivered
copies of all Pre-Closing Period Tax Returns for the Conveyed Entities (other
than any Income Tax Returns) to Purchaser within thirty (30) days of the filing
of any such Pre-Closing Period Tax Return.


 


(b) (i) Purchaser shall, and shall cause its
Affiliates to, prepare and file, or cause to be prepared and filed, all Tax
Returns (other than Income Tax Returns (which shall be the responsibility of
Seller) and Transfer Tax Returns) relating to the Business, the Purchased
Assets or the Conveyed Entities that are due to be filed (giving effect to any
extensions of time to file) after the Closing Date, but that include or relate
to taxable periods (or portions thereof) ending on or prior to the Closing
Date, including taxable periods beginning before and ending after the Closing
Date (collectively, “Straddle Period Returns”).  Purchaser shall pay or cause to be paid all
Taxes with respect to such Straddle Period Returns when due.  Purchaser shall, and shall cause its
Affiliates to, permit Seller to review and comment on any Straddle Period
Returns for which Seller or any of its Affiliates has any indemnification
obligation under this Agreement, and Purchaser shall, and shall cause its
Affiliates to, make such revisions to such Tax Returns as are reasonably
requested by Seller.  Seller shall, and
shall cause the Equity Selling Entities and/or the Asset Selling Entities to,
pay over to Purchaser, no fewer than three (3) Business Days prior to the
due date of the applicable Straddle Period Return, an amount of cash sufficient
for the payment of any Taxes required to be shown as due on such Tax Return and
for which Seller bears responsibility pursuant to Section 7.1.


 


(ii) To the extent that Purchaser or its
Affiliates are required to file Tax Returns with respect to Transfer Taxes,
Purchaser shall, and shall cause its Affiliates to, permit Seller to review and
comment on the portion of any Tax Returns related to the determination of any
Transfer Tax, and Purchaser shall, and shall cause its Affiliates to, make such
revisions to such Tax Returns as are reasonably requested by Seller.  Seller shall pay over to Purchaser, no fewer
than three (3) Business Days prior to the due date of any such Transfer
Tax Return, an amount of cash sufficient for the payment of fifty (50) percent
of any Taxes shown as due on such Tax Return and for which Seller bears
responsibility pursuant to Section 7.1.


 


(c)   Purchaser agrees that, with respect to each
of the Conveyed Entities and any successor thereto:


 


(i)          except as provided in Section 7.7(d), neither
Purchaser nor any of its Affiliates or any successor thereto will file any
claim for refund of Taxes with respect to (a) any period ending on or
before the Closing Date, or (b) in the case of a Straddle Period, the
portion of such Straddle Period ending on the Closing Date;


 


(ii)         Purchaser,
its Affiliates, and any successor thereto must make any election available to
them to waive the right to claim in respect of any period ending on or before
the Closing Date any carryback with respect to Taxes arising in (a) any
period beginning after the Closing Date, or (b) in the case of a Straddle
Period, the portion of such Straddle Period beginning after the Closing Date;
and


 


60














 


(iii)        neither
Purchaser nor any of its Affiliates or any successor thereto will file any
amended Tax Return in respect of (a) any period ending on or before the
Closing Date, or (b) in the case of a Straddle Period, the portion of such
Straddle Period ending on the Closing Date.


 


Section 7.5             Tax Contests. (a) Seller
and Purchaser shall provide notice within fifteen (15) Business Days to the
other of any pending or threatened Contest of which it becomes aware related to
Taxes for any period for which it is indemnified by the other Party hereunder.
Such notice shall contain factual information (to the extent known) describing
any asserted Tax liability in reasonable detail and shall be accompanied by
copies of any notice and other documents it has received from any Taxing
Authority in respect of any such matters. If a Party hereto has knowledge of an
asserted Tax liability with respect to a matter for which it is to be
indemnified under Section 7.6 hereof and such Party fails to give the
indemnifying Party prompt notice of such asserted Tax liability, then
(i) if the indemnifying Party is precluded from contesting the asserted
Tax liability in any forum as a result of the failure to give prompt notice,
the indemnifying Party shall have no obligation to indemnify the indemnified
Party for any Taxes arising out of such asserted Tax liability, and
(ii) if the indemnifying Party is not precluded from contesting such
asserted Tax liability in any forum, but such failure to give prompt notice
results in a monetary detriment to the indemnifying Party, then any amount that
the indemnifying Party is otherwise required to pay the indemnified Party
pursuant to Section 7.6 hereof shall be reduced by the amount of such
detriment.


 


(b)           Seller or its designee shall have the
right, upon written notice to Purchaser within thirty (30) days after delivery
by Purchaser to Seller of notice, to represent a Conveyed Entity’s interests in
any Contest relating to a Tax matter arising with respect to a Pre-Closing
Period Tax Return to the extent such Contest is in connection with any Taxes
for which Seller
may be liable pursuant to Section 7.1 hereof, to employ counsel of its
choice at its expense and to control the conduct of such Contest, including
settlement or other disposition thereof.


 


(c)           Purchaser shall have the right to
control the conduct of any Contest relating to a Tax matter of a Conveyed
Entity arising with respect to a period ending after the Closing Date and of
any Contest in respect of which Seller has not elected to represent the interests of a
Conveyed Entity pursuant to Section 7.5(b); provided, however,
that Seller shall have the right, at Seller’s own expense, to consult with
Purchaser regarding any such Contest that may affect a Conveyed Entity for any
Pre-Closing Period or for any portion of a Straddle Period ending on the
Closing Date; and provided, further, that any settlement or other
disposition of any such Contest that may affect a Conveyed Entity for any
Pre-Closing Period or any portion of a Straddle Period ending on the Closing
Date may only be made with the consent of Seller, which consent will not be
unreasonably withheld, delayed or conditioned. In the case of a Contest with
respect to a Straddle Period, to the extent that Seller unreasonably withholds,
delays or conditions consent, Purchaser’s obligation under
Section 7.6(c) of this Agreement to indemnify Seller for any Tax with
respect to such period shall terminate and Seller shall reimburse Purchaser for
the reasonably incurred costs of the Contest. As with all other disputes under
this Agreement, it is understood by the Parties that any disputes arising under
this Section 7.5(c), including, but not limited to, disputes regarding
consent being unreasonably withheld, delayed or conditioned, shall constitute disputes
regarding matters in this Article VII that require the agreement of the
Parties


 


61

















 


within the meaning of Section 7.10 of this
Agreement and, therefore, shall be resolved in accordance with
Section 7.10 of this Agreement.


 


(d)           Seller and Purchaser agree, in each
case at no cost to the other Party, to cooperate with the other and the other’s
Representatives in a prompt and timely manner in connection with any Contest.
Such cooperation shall include, but not be limited to, making available to the
other Party, during normal business hours, all books, records, returns,
documents, files, other information (including working papers and schedules),
officers or employees (without substantial interruption of employment) or other
relevant information necessary or useful in connection with any Contest
requiring any such books, records and files.


 


(e)           Where there is a dispute with a
Taxing Authority regarding liability for Tax for a Pre-Closing Period and for
which Seller has an indemnification obligation, Purchaser shall, or shall cause
the appropriate Conveyed Entity to, as the case may be, at the request of
Seller, pay the amount of the disputed Tax to the Taxing Authority, and
Purchaser or the Conveyed Entity shall be reimbursed by Seller in a manner to be
agreed upon by the Parties at such time as Seller makes such request.


 


Section 7.6             Indemnification.
(a) The indemnification provisions set forth in this Section 7.6 are
the exclusive remedy for obligations of the Parties arising under this
Agreement that relate to Taxes and Article VIII of this Agreement shall
not apply to such obligations, except that Article VIII of this Agreement
shall apply to breaches of Section 3.16. The covenants set forth in this
Article VII shall survive the Closing without time limitation.


 


(b)           Seller shall be liable for, and
covenants and agrees to indemnify and hold harmless Purchaser and its
Affiliates from and against, any and all liabilities incurred by Purchaser or
its Affiliates:


 


(i)          by
reason of a breach by Seller of any covenant contained in Article VII
hereof;


 


(ii)         for
Taxes for which Seller bears responsibility pursuant to Section 7.1
hereof; or


 


(iii)        for
Income Taxes of Seller, the Seller Entities and the Conveyed Entities resulting
from the application of Treasury Regulation Section 1.1502-6 (or any
similar provision of State, local or foreign law) and relating to taxable
periods or portions thereof of Seller or its Affiliates ending on or before or
including the Closing Date.


 


(c)           Purchaser shall be liable for, and covenants
and agrees to indemnify and hold harmless Seller and its Affiliates from and against, any and all
liabilities incurred by any of Seller
or its Affiliates:


 


(i)          by
reason of a breach by Purchaser of any covenant contained in Article VII
hereof; or


 


(ii)         for
Taxes for which Purchaser bears responsibility pursuant to Section 7.2
hereof.


 


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(d)           If a Party (the “Tax Indemnified
Party”) determines that it or any of its Affiliates is or may be entitled
to indemnification by another Party (the “Tax Indemnifying Party”) under
Section 7.6(b) or Section 7.6(c) hereof, the Tax
Indemnified Party will promptly deliver to the Tax Indemnifying Party a written
notice and demand therefore (the “Tax Notice”) specifying the basis for
indemnification and, if known, the amount for which the Tax Indemnified Party
reasonably believes it or any of its Affiliates is entitled to be indemnified
(a “Tax Claim”), together with any supporting documentation (including,
if applicable, any relevant notice from any Taxing Authority). The Tax Notice
must be received by the Tax Indemnifying Party no later than thirty (30) days
before the expiration of the applicable Tax statute of limitations; provided,
however, that if the Tax Indemnified Party does not receive notice from
the applicable Taxing Authority (“Taxing Authority Notice”) that an item
exists that could give rise to a Tax Claim more than thirty (30) days before
the expiration of the applicable Tax statute of limitations, then the Tax
Notice must be received by the Tax Indemnifying Party as promptly as
practicable after the Tax Indemnified Party receives the Taxing Authority
Notice (but in no event more than five (5) Business Days after the Tax
Indemnified Party receives the Taxing Authority Notice). If the Tax Indemnifying
Party objects to the Tax Claim in the manner set forth in
Section 7.6(e) hereof or if either the Tax Indemnifying Party or the
Tax Indemnified Party exercises Contest rights as contemplated by
Section 7.5(b), then the Tax Indemnifying Party shall not be liable to
make an indemnification payment to the Tax Indemnified Party until there is a
determination by the Accountant or a Final Determination regarding the Tax
Claim, as the case may be. In all other cases, the Tax Indemnifying Party will
pay the Tax Indemnified Party the amount set forth in the Tax Notice, in cash
or other immediately available funds, within thirty (30) days after receipt of
the Tax Notice; provided, however, that if the amount for which
the Tax Indemnified Party reasonably believes it is entitled to be indemnified
is not known at the time of the Tax Notice, the Tax Indemnifying Party shall
pay the amount known to be due and the Tax Indemnified Party will deliver to
the Tax Indemnifying Party a further Tax Notice specifying the unknown amount
as soon as reasonably practicable after such amount is known and payment will
then be made as set forth above.


 


(e)           The Tax Indemnifying Party may object
to the Tax Claim (or the amount thereof) set forth in any Tax Notice by giving
the Tax Indemnified Party, within thirty (30) days following receipt of such
Tax Notice, written notice setting forth the Tax Indemnifying Party’s grounds
for so objecting (the “Tax Objection Notice”). If the Tax Indemnifying
Party does not give the Tax Indemnified Party the Tax Objection Notice within
such thirty (30) day period, the Tax Indemnified Party may exercise any and all
of its rights under applicable Law and this Agreement to collect such amount.


 


(f)            The amount of a Tax Claim shall be
the amount of Taxes payable by the Tax Indemnified Party net of any anticipated
benefit to the Tax Indemnified Party or any of its Affiliates attributable to
any Tax item resulting from the facts underlying such Tax Claim.


 


(g)           If the Tax Indemnified Party and the
Tax Indemnifying Party are unable to settle any dispute regarding a Tax Claim
within thirty (30) days after receipt of the Tax Objection Notice, the Tax
Indemnified Party and the Tax Indemnifying Party will, in accordance with
Section 7.10, jointly request the Accountant to resolve the dispute as
promptly as possible.


 


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(h)           Failure by the Tax Indemnified Party
to promptly deliver to the Tax Indemnifying Party a Tax Notice in accordance
with Section 7.6(d) hereof will not relieve the Tax Indemnifying
Party of any of its obligations under this Agreement except to the extent the
Tax Indemnifying Party is prejudiced by such failure.


 


(i)            Each of the Parties, on behalf of
itself and its Affiliates, agrees not to bring any actions or proceedings, at
law, in equity or otherwise, against any other Party or its Affiliates, in
respect of any breaches or alleged breaches of any representation, warranty or
other provision of this Article VII, except pursuant to and subject to the
express provisions of this Section 7.6.


 


Section 7.7             Refunds. (a) Purchaser
shall, and shall cause its Affiliates to, hold in trust for the benefit of
Seller all refunds (including interest paid thereon by a Governmental Authority
and any amounts applied against a Tax liability for other taxable periods) of any
Taxes for which Purchaser is entitled to indemnification pursuant to this
Agreement (“Seller’s Refunds”), and, within five (5) Business Days
after receipt by Purchaser or any of its Affiliates of any such Seller’s
Refund, Purchaser or its Affiliate, as applicable, shall pay over to Seller the
amount of such Seller’s Refund without right of set off or counterclaim.


 


(b)           Seller shall, and shall cause its
Affiliates to, hold in trust for the benefit of Purchaser and its Affiliates
all refunds (including interest paid thereon by a Governmental Authority and
any amounts applied against a Tax Liability for other taxable periods) of any
Taxes for which Seller is entitled to indemnification pursuant to this
Agreement (“Purchaser’s Refunds”) and, within five (5) Business
Days of receipt by Seller or any of its Affiliates of any such Purchaser’s
Refund, Seller or and its Affiliate, as applicable, shall pay over to Purchaser
the amount of Purchaser’s Refund without right of set off or counterclaim.


 


(c)           Upon the request of Seller, Purchaser
will file, or cause a Conveyed Entity or its Affiliate to file, claims for
Seller’s Refunds, in such form as Seller may reasonably request; provided,
however, that the filing of any such claim will not result in any
prejudice to Purchaser or its Affiliates. Seller will have the sole right to
prosecute any claims for Seller’s Refunds (by suit or otherwise) at Seller’s
expense and with counsel of Seller’s choice. Purchaser will cooperate, and
cause the appropriate Conveyed Entity or Affiliate to cooperate, fully, at
Seller’s expense, with Seller and its counsel in connection therewith.


 


(d)           Upon the request of Purchaser, Seller
shall and shall cause its Affiliates to file, claims for Purchaser’s Refunds,
in such form as Purchaser may reasonably request; provided, however,
that the filing of any such claim will not result in any prejudice to Seller or
its Affiliates. Purchaser will have the sole right to prosecute any claims for
Purchaser’s Refunds (by suit or otherwise) at Purchaser’s expense and with
counsel of Purchaser’s choice. Seller will cooperate, and cause its Affiliates
to cooperate, fully, at Purchaser’s expense, with Purchaser and its counsel in
connection therewith.


 


(e)           Except as provided in Sections
7.7(a) and 7.7(b) hereof, any refunds of Taxes other than Seller’s
Refunds and Purchaser’s Refunds will be the property of the payee of such
refunds and no other Party or its Affiliates will have any right to such
refunds.


 


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(f)            To the extent reasonably requested
by Seller, and within (30) days of such request, Purchaser and its Affiliates
shall grant to Seller appropriate powers of attorney as may reasonably be
necessary to prosecute or defend its rights hereunder.


 


Section 7.8             Assistance and Cooperation.
After the Closing Date, Seller and Purchaser shall cooperate (and shall cause
their respective Affiliates to cooperate) with each other and with each other’s
agents, including accounting firms and legal counsel, in connection with Tax
matters relating to the Conveyed Entities and the Purchased Assets, including
(i) the preparation and filing of Tax Returns, (ii) determining the
liability for and amount of any Taxes due or the right to and amount of any
refund of Taxes, (iii) examinations of Tax Returns, and (iv) any
administrative or judicial proceedings in respect of Taxes assessed or proposed
to be assessed. Such cooperation shall include making all information and
documents in their possession related to the Business available to the other,
as provided in Section 7.9 hereof. Seller and Purchaser also shall (and
shall cause their respective Affiliates to) make available to the other, as
reasonably requested and available, personnel responsible for preparing,
maintaining, and interpreting information and documents relevant to Taxes. Any
information or documents provided under this Section 7.8 shall be kept
confidential by the Party receiving the information or documents, except as may
otherwise be necessary in connection with the filing of Tax Returns or in
connection with any administrative or judicial proceedings relating to Taxes.


 


Section 7.9             Tax Records. Tax records in
possession of Seller (other than those included in the Excluded Assets) and/or
the Equity Selling Entities relating to the Conveyed Entities shall be
transferred to Purchaser. Seller may make and retain copies of such Tax
records. Seller, Purchaser, and their respective Affiliates shall make
available to each other (at no cost to the requesting Party) for inspection and
copying during normal business hours upon reasonable notice all Tax records in
their possession relating to the Conveyed Entities and the Purchased Assets to
the extent reasonably required by the other Party in connection with the
preparation of Tax Returns, audits, litigations, or the resolution of items
under this Article VII. Seller, Purchaser, and their respective Affiliates
shall preserve and keep such Tax records in their possession until the
expiration of any applicable statutes of limitation and as otherwise required
by Law, but in any event for a period of not less than ten (10) years
after the Closing Date.


 


Section 7.10           Dispute Resolution. If Seller
and Purchaser fail to agree on the resolution of any of the matters in this
Article VII that require the agreement of the Parties or otherwise disagree
about the proper interpretation or operation of any provision of this
Article VII, then such matter shall be referred to the Accountant for
binding arbitration. Seller and Purchaser shall deliver to the Accountant
copies of any schedules or documentation that may reasonably be required by the
Accountant to make its determination. Each of Purchaser and Seller shall be
entitled to submit to the Accountant a memorandum setting forth its position
with respect to such arbitration. The Accountant shall render a determination
within sixty (60) days of the referral of such matter for binding arbitration.
Seller or Purchaser, as the case may be, shall pay to the other Party the
amount determined by the Accountant within ten (10) days of the date on which
the Accountant makes its determination. Notwithstanding any provision of this
Section 7.10, the Accountant may, at its sole discretion, amend the
procedures contained herein. The determination of the Accountant shall be final
and binding on all Parties. The costs incurred in retaining the Accountant
shall be shared equally, fifty percent (50%) by Seller and fifty percent (50%)
by Purchaser.


 


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Section 7.11           Payment. All amounts required
to be paid to a Party under this Article VII shall be paid in Dollars and
translated from local currency at the spot rate. If a Party (the “Payor”)
fails to make a payment due and owing under this Article VII to the other
Party or any of its Affiliates (the “Payee”) within thirty (30) days of
the date prescribed by this Article VII, the Payor will pay to the Payee
interest (such interest to be calculated on the basis of a year of 360 days and
the actual number of days elapsed) on such payment from and including the date
on which such payment was due, but excluding the day the Payor makes such
payment, at a rate equal to eight percent (8%) per annum.


 


Section 7.12           Termination of Tax Allocation
Agreements. Immediately prior to the close of business on the Closing Date,
(i) all Tax allocation or sharing agreements or arrangements existing
between any of Seller and the Equity Selling Entities, on the one hand, and any
of the Conveyed Entities, on the other hand, shall be terminated; and
(ii) amounts due under such agreements or arrangements shall be settled as
of the Closing Date in such manner as Seller shall determine (including
capitalization or distribution of amounts due or receivable under such
agreements or arrangements). Upon such termination and settlement, no further
payments by or to the Conveyed Entities with respect to such agreements or
arrangements shall be made, and all other rights and obligations resulting from
such agreements or arrangements between the Conveyed Entities and others shall
cease at such time.


 


Section 7.13           Adjustment. All amounts paid,
or caused to be paid, by one Party or its Affiliates to another Party or its
Affiliates pursuant to this Agreement (other than interest in accordance with
Section 7.11 hereof, but including amounts payable under Article VIII
hereof) shall be treated by the Parties as an adjustment to the Gross Asset
Purchase Price or Gross Equity Purchase Price, as applicable, to the extent
permitted by Law.


 


Section 7.14           Section 338(h)(10) Election.
(a) At the sole election of Seller (notice of which shall be provided to
Purchaser no later than five (5) Business Days prior to the Closing Date),
Purchaser shall join with Seller in making an election under
Section 338(h)(10) of the Code and any corresponding or similar
elections under state, local or foreign Tax Law (collectively the “Section 338(h)(10) Election”)
with respect to the purchase and sale of the stock of the Conveyed Entities. In
the event Seller does not choose to make the
Section 338(h)(10) Election, the remainder of the provisions of this
Section 7.14 shall not apply.


 


(b)           Seller shall prepare and file all
forms and documents required in connection with the
Section 338(h)(10) Election. For the purpose of making the
Section 338(h)(10) Election, within five (5) Business Days of
Seller’s notification of Purchaser of Seller’s intention to make the
Section 338(h)(10) Election, Purchaser and Seller each shall execute
two (2) copies of Internal Revenue Service Form 8023 (or successor
form). Purchaser shall execute (or cause to be executed) and deliver to Seller
such additional documents or forms as are reasonably requested to complete the
Section 338(h)(10) Election at least ten (10) days prior to the
date such documents or forms are required to be filed.


 


(c)           The Parties agree that, for purposes
of the Section 338(h)(10) Election, the “aggregate deemed sales
price” (the “ADSP”) with respect to the assets of the Conveyed Entities based
upon the amount of the Gross Equity Purchase Price allocated to the stock of
the Conveyed Entities pursuant to Section 2.8, shall be allocated for
purposes of Section 338 of the 


 


66

















 


Code and the applicable Treasury Regulations
promulgated thereunder (and any similar provision of state, local or foreign
Tax Law, as appropriate) (the “ADSP Allocation”) in accordance with the
procedures provided herein, which allocation shall be binding upon Seller, the
Conveyed Entities and Purchaser. Within ninety (90) days of the Closing Date,
Seller will provide to Purchaser copies of Internal Revenue Service
Form 8594 and any required exhibits thereto (the “Asset Acquisition
Statement”) and the ADSP Allocation, with Seller’s proposed allocation of
the allocated Gross Purchase Price (together with any Liabilities properly
taken into account in determining the ADSP) and the ADSP Allocation. Purchaser
will propose to Seller any changes to such Asset Acquisition Statement and the
ADSP Allocation (and, in the event that no such changes are proposed in writing
to Seller within five (5) Business Days following Purchaser’s receipt of
such documents, Purchaser will be deemed to have agreed to and accepted the
Asset Acquisition Statement and the ADSP Allocation). The Parties will endeavor
in good faith to resolve any differences with respect to the Asset Acquisition
Statement and/or the ADSP Allocation within fifteen (15) days after Seller’s
receipt of written notice of objection from Purchaser.


 


(d)           If Purchaser withholds its consent to
the allocation reflected in the Asset Acquisition Statement or the ADSP
Allocation, and Purchaser and Seller have acted in good faith to resolve any
differences with respect to items on the Asset Acquisition Statement or the
ADSP and thereafter are unable to resolve any differences that, in the
aggregate, are material in relation to the ADSP Allocation, then any remaining
disputed matters will be finally and conclusively determined by the Arbiter.
Promptly, but not later than fifteen (15) days after its acceptance of
appointment hereunder, the Arbiter will determine (based solely on presentation
of Purchaser and Seller and not by independent review) only those matters in
dispute and will render a written report as to the disputed matters and the
resulting ADSP Allocation or other allocation or determination, which report
shall be conclusive and binding upon the Parties. The Parties shall, subject to
the requirements of applicable Tax Law or election, file all Tax returns and
reports consistent with the allocation provided in the Asset Acquisition
Statement and the ADSP Allocation, or, if applicable, the determination of the
Arbiter. The Parties shall bear equally the fees and expenses of the Arbiter.


 


ARTICLE
VIII



SURVIVAL; INDEMNIFICATION


 


Section 8.1             Survival of Representations and
Warranties. (a) The respective representations and warranties of
Seller and Purchaser contained in Articles III and IV shall survive the Closing
until the date that is fifteen (15) months from the Closing Date; provided
that the representations and warranties set forth in
Section 3.3(b) (“Capital Structure”) shall survive for the applicable
statute of limitations.


 


(b)           Neither Seller nor Purchaser shall
have any liability whatsoever with respect to any representation and warranty
unless a claim is made hereunder prior to the expiration of the applicable
survival period for such representation and warranty, in which case such
representation and warranty shall survive as to such claim until such claim has
been finally resolved.


 


67

















 


Section 8.2             Indemnification by Seller.
(a) Subject to the limitations set forth in this Article VIII, after
the Closing, Seller agrees to defend and indemnify Purchaser and each of its
officers and directors (the “Purchaser Indemnitees”) and save and hold
each of them harmless against any Losses incurred by them as a result of:
(i) any failure of any representation or warranty made by Seller contained
in Article III to be true and correct on and as of the Closing Date (it
being agreed that any materiality or Material Adverse Effect qualification in a
representation and warranty shall be disregarded in determining whether any
such representation and warranty has been breached except as set forth in Schedule
6.2(b) of the Seller Disclosure Letter); (ii) any breach of any
covenant or agreement by Seller contained in this Agreement (other than
covenants contained in Article VII, which are addressed by Article VII
exclusively); and (iii) any Retained Liability.


 


(b)           Subject to the rights and limitations
set forth in this Section 8.2 and Sections 8.4(b), 8.4(d), 8.5, 8.6, 8.7
and 8.8, after the Closing, Seller agrees to defend and indemnify the Purchaser
Indemnitees and save and hold each of them harmless against any Losses incurred
by them as a result of (i) the presence or release of, or human exposure
to, Hazardous Substances in, on, or beneath any Leased Real Property or any
Real Property, in each case, to the extent existing or occurring on or prior to
the Closing Date; and (ii) any violation of any Environmental Law by the
Business, any Asset Selling Entity (in connection with the Business) or any
Conveyed Entity, to the extent relating to or arising from acts or omissions
occurring on or prior to the Closing Date; provided it is understood
that no Losses relating to or arising from any violation occurring after the
Closing Date are recoverable under this Section 8.2(b)(ii).


 


(c)           Certain Limitations. (i) Notwithstanding
anything to the contrary contained in this Agreement, (x) for all
Environmental Standalone Claims made or existing after the tenth anniversary of
the Closing Date, Seller shall not be liable for such claims unless and until
the aggregate amount of all indemnifiable Losses relating to such claims and
incurred after the tenth anniversary of the Closing Date equals or exceeds One
Million Dollars ($1,000,000), in which case Seller shall be liable only for the
amount of the Losses in excess of such amount; (y) from and after the
Closing, the maximum aggregated amount of indemnifiable Losses which may be
recovered under Section 8.2(b) shall be Thirty Million Dollars
($30,000,000); and (z) Seller shall not be liable for any Environmental
Standalone Claim unless such claim is made hereunder prior to the date that is
20 years from the Closing Date.


 


(ii) With respect to
any and all Environmental Indemnity Claims, Purchaser and Seller, as the case
may be, shall act only in a “Commercially Reasonable Manner” which shall mean
the most cost-effective and commercially reasonable method for investigation,
remediation, removal, corrective action, containment, monitoring and/or other
response action permitted by applicable Environmental Laws, determined from the
perspective of a reasonable business person acting (without regard to the
availability of indemnification hereunder) to achieve compliance with
Environmental Laws in effect as of the Closing (it being understood that
Commercially Reasonable Manner shall include the use of risk-based remedies,
institutional or engineering controls, or deed restrictions, based on the use
of the property at Closing).


 


(iii) Seller shall
have no obligations for any Environmental Indemnity Claim to the extent Losses
thereunder result from or are the consequence of any action (including
disclosure, report or other communication from the Purchaser and its Affiliates
(or their agents) to any 


 


68

















 


Governmental Authority or other third party or any
Phase II or other intrusive investigations or sampling, testing or monitoring
of the soil, surface water or groundwater performed by Purchaser or its
Affiliates (or their agents)) that is not (A) required by an Environmental
Law; or (B) necessary to address a condition first discovered as a result
of construction activities at, on or beneath a Leased Real Property or Real
Property.


 


(iv) Seller shall
have no obligation for any Environmental Indemnity Claim  to
the extent Losses result, in whole or in part, from any change in use of any Leased
Real Property, any Real Property, the property subject to the Sublease
Agreement or the Property subject to the Cork Sublease from its current use to
any nonindustrial use after the Closing Date.


 


(v) From
and after the Closing Date, with respect to the Business, any Leased Real
Property or any Real Property, Purchaser shall, and will cause each of its
Affiliates and Subsidiaires to, comply with all applicable Environmental Laws
in all material respects.


 


(vi) The
Purchaser Indemnitees shall be permitted to assign a portion of their rights to
bring an Environmental Indemnity Claim; provided that no more than two
such assignments may be made by all the Purchaser Indemnitees, taken as a
whole, and; provided, further, any such assignment, if made,
shall be effective if, and only if, the assignee agrees in writing to be bound
to all of the limitations applicable to Environmental Indemnity Claims set
forth in this Article VIII.


 


(d)           Environmental Procedures. (i) Seller
shall have the right, but not the obligation, to conduct and control the
defense or negotiation (including any investigatory, monitoring, response or
remedial actions) of any Environmental Indemnity Claim for which Purchaser
Indemnitees are entitled to indemnification pursuant to Section 8.2(a) or
Section 8.2(b), including its resolution, compromise or settlement, with
counsel and environmental consultant selected, if any, by Seller. No
resolution, compromise or settlement in respect of such Environmental Indemnity
Claim may be reached by Seller without Purchaser’s prior consent (which consent
shall not be unreasonably withheld, conditioned or delayed) unless the resolution, settlement or
compromise involves only the payment of monetary damages. In the event
Seller elects to control the defense or negotiation of any Environmental
Indemnity Claim, Purchaser shall provide Seller with reasonable access to its
properties and employees. In the event Seller elects not to control the defense
of any Environmental Indemnity Claim, Purchaser shall control the defense of
such Environmental Indemnity Claim, including its resolution, compromise or
settlement, and no resolution, compromise or settlement in respect of such
Environmental Indemnity Claim may be reached by Purchaser without Seller’s
prior consent (which consent shall not be unreasonably withheld, conditioned or
delayed).


 


(ii) Purchaser and
Seller, at their sole cost, as the case may be, with respect to any matter
managed and controlled by the other, shall have the right to
(x) participate in any meetings or material negotiations with any third
party (excluding counsel, consultants or other experts retained by the
controlling party) with respect to any Environmental Indemnity Claim and shall
be provided with reasonable advance notice of the same and (y) review in
advance and provide comments on any documents proposed to be submitted to
Governmental Authorities or other third parties.


 


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(iii) Seller and Purchaser agree that the
issuance in respect of an Environmental Indemnity Claim  of a “no further action” letter or the
equivalent indicia of completion issued by any Governmental Authority having
jurisdiction over remediation (“NFA Letter”) shall constitute completion
of Seller’s obligation for such Environmental Indemnity Claim; provided,
however, that in the event the NFA Letter contains re-openers or other
provisions that reserve the right of the issuing Governmental Authority to require
additional investigation and/or remediation of Hazardous Substances or seek
additional damages (“Re-Opener”) and that Re-Opener is triggered before
the twentieth anniversary of the Closing Date, Seller shall not invoke the
receipt of the NFA Letter to avoid fulfilling its obligations with respect to
such Environmental Indemnity Claim.


 


(iv) In the event of any inconsistency between
the terms of this Section 8.2 and the other provisions in
Article VIII, the provisions of this Section 8.2 shall control.


 


Section 8.3     Indemnification by Purchaser.
Subject to the limitations set forth in this Article VIII, after the
Closing, Purchaser agrees to defend and indemnify Seller and its Affiliates and
each of their respective officers and directors (“Seller Indemnitees”)
and save and hold each of them harmless against any Losses incurred by them as
a result of: (i) any failure of any representation or warranty made by
Purchaser contained in Article IV to be true and correct in all material
respects on and as of the Closing Date; (ii) any breach of any covenant or
agreement by Purchaser contained in this Agreement; (iii) any Assumed Liability or any Liability of a
Conveyed Entity; (iv) events
occurring on or after the Closing Date in connection with the Business, the Purchased
Assets or the Equity Interests, including the use, ownership, possession,
operation, or occupancy of any Leased Real Property or Real Property, the
Intellectual Property of the Business, the Purchased Assets or the Equity
Interests from and after the Closing Date; and (v) any Parent Guarantee,
Seller Surety Bond or Parent LofC or any Related Obligation or Contract that remains outstanding after the Closing.


 


Section 8.4     Limitation on Indemnification,
Mitigation.


 


(a)   Notwithstanding anything to the contrary
contained in this Agreement, neither Seller nor Purchaser shall be liable for
any claim for indemnification pursuant to Section 8.2(a)(i) (other
than with respect to Section 3.3(b)), Section 8.2(a)(ii) arising
out of a breach of Section 5.2 or 8.3(i), as the case may be, (i) for
any individual item where the Loss relating thereto is less than Ten Thousand
Dollars ($10,000)  (the “Per-Claim Deductible”)
and (ii) unless and until the aggregate amount of all such indemnifiable
Losses which may be recovered from Seller or Purchaser, as the case may be,
equals or exceeds Six Million Four Hundred Thousand Dollars ($6,400,000), in
which case Seller or Purchaser, as the case may be, shall be liable only for
the amount of the Losses in excess of such amount. It is further agreed that
the maximum aggregate amount of indemnifiable Losses which may be recovered for
indemnification (i) pursuant to Section 8.2(a)(i) (other than
with respect to Section 3.3(b)) and Section 8.2(a)(ii) arising
out of a breach of Section 5.2, as the case may be, shall be an amount
equal to Sixty-Four Million Dollars ($64,000,000) and (ii) pursuant to
Section 8.3(i) shall be an amount equal to Sixty-Four Million Dollars
($64,000,000).


 


(b)   Purchaser acknowledges and agrees that Seller
shall not have any liability under any provision of this Agreement for any Loss
to the extent that such Loss relates to any 


 


70

















 


action taken by Purchaser or any other Person (other
than Seller and the Seller Entities in breach of this Agreement) after the
Closing Date. Purchaser shall take and shall cause its Affiliates to take all
commercially reasonable steps to mitigate any Loss upon becoming aware of any
event which would reasonably be expected to, or does, give rise thereto,
including incurring costs only to the minimum extent necessary to remedy the
breach which gives rise to the Loss.


 


(c)   Seller acknowledges and agrees that Purchaser
shall not have any liability under any provision of this Agreement for any Loss
to the extent that such Loss relates to any action taken by Seller or any other
Person (other than Purchaser in breach of this Agreement) after the Closing
Date. Seller shall take and shall cause its Affiliates to take all commercially
reasonable steps to mitigate any Loss upon becoming aware of any event which
would reasonably be expected to, or does, give rise thereto, including
incurring costs only to the minimum extent necessary to remedy the breach which
gives rise to the Loss.


 


(d)   Notwithstanding anything in this Agreement to
the contrary, the aggregate liability of Seller under this Agreement with
respect to Losses to Purchaser Indemnitees for indemnification with respect to
this Agreement shall not be in excess of the total amount of proceeds received
by Seller in connection with the transactions contemplated by this Agreement.


 


Section 8.5     Losses Net of Insurance, Etc. The amount of any Loss for which
indemnification is provided under Section 7.6, 8.2 or 8.3 shall be net of
(i) any accruals or reserves on the financial statements referenced in
Section 3.6 or included in the determination of the Closing Date Working
Capital, (ii) any amounts recovered by the Indemnified Party pursuant to
any indemnification by, or indemnification agreement with, any third party,
(iii) any insurance proceeds or other cash receipts or sources of
reimbursement received as an offset against such Loss (each Person named in
clauses (ii) and (iii), a “Collateral Source”), and (iv) an
amount equal to the present value of the Tax benefit, if any, attributable to
such Loss. Purchaser agrees to use commercially reasonable efforts to seek
recovery from all Collateral Sources. The Indemnifying Party may require an
Indemnified Party to assign the rights to seek recovery pursuant to the
preceding sentence; provided, however, that the Indemnifying
Party will then be responsible for pursuing such claim at its own expense. If
the amount to be netted hereunder in connection with a Collateral Source from
any payment required under Section 7.6, 8.2 or 8.3 is determined after
payment by the Indemnifying Party of any amount otherwise required to be paid
to an Indemnified Party pursuant to this Article VIII, the Indemnified
Party shall repay to the Indemnifying Party, promptly after such determination,
any amount that the Indemnifying Party would not have had to pay pursuant to
this Article VIII had such determination been made at the time of such
payment, and any excess recovery from a Collateral Source shall be applied to reduce
any future payments to be made by the Indemnifying Party pursuant to
Section 7.6, 8.2 or 8.3. Notwithstanding
anything herein to the contrary, in no event shall “Losses” be calculated based
upon any multiple of lost earnings or other similar methodology used to value
the Business, the Purchased Assets, the Assumed Liabilities or the Conveyed
Entities or based on the financial performance or results of operations of the
Business, the Purchased Assets, the Assumed Liabilities or the Conveyed
Entities.


 


Section 8.6     Indemnification Procedure.
(a) Promptly after the incurrence of any Losses by any Person entitled to
indemnification pursuant to Sections 5.5, 5.6, 5.12, 8.2 or 8.3 hereof (an “Indemnified
Party”), including any claim by a third party described in Section 


 


71

















 


8.7, which might give rise to indemnification
hereunder, the Indemnified Party shall deliver to the Party from which
indemnification is sought (the “Indemnifying Party”) a certificate (the
“Claim Certificate”), which Claim Certificate shall:


 


(i)  state that
the Indemnified Party has paid or anticipates it will incur liability for
Losses for which such Indemnified Party is entitled to indemnification pursuant
to this Agreement; and


 


(ii) specify in reasonable
detail (and have annexed thereto all supporting documentation, including any
correspondence in connection with any Third-Party Claim and paid invoices for
claimed Losses) each individual item of Loss included in the amount so stated,
the date such item was paid or accrued, the basis for any anticipated liability
and the nature of the misrepresentation, breach of warranty, breach of covenant
or claim to which each such item is related and the computation of the amount
to which such Indemnified Party claims to be entitled hereunder. The failure of
an Indemnified Party to give reasonably prompt notice of any claim or claims
shall not release, waive or otherwise affect the Indemnifying Party’s
obligations with respect thereto except to the extent that the Indemnifying
Party is materially prejudiced as a result of such failure.


 


(b)   In the event that the Indemnifying Party
shall object to the indemnification of an Indemnified Party in respect of any
claim or claims specified in any Claim Certificate, the Indemnifying Party
shall, within forty-five (45) days after receipt by the Indemnifying Party of
such Claim Certificate, deliver to the Indemnified Party a notice of objection
to such effect, specifying in reasonable detail the basis for such objection, and
the Indemnifying Party and the Indemnified Party shall, within the sixty (60)
day period beginning on the date of receipt by the Indemnified Party of such
objection, attempt in good faith to agree upon the rights of the respective
parties with respect to each of such claims to which the Indemnifying Party
shall have so objected. If the Indemnified Party and the Indemnifying Party
shall succeed in reaching agreement on their respective rights with respect to
any of such claims, the Indemnified Party and the Indemnifying Party shall
promptly prepare and sign a memorandum setting forth such agreement. Should the
Indemnified Party and the Indemnifying Party be unable to agree as to any
particular item or items or amount or amounts within such time period, then the
Indemnified Party shall be permitted to submit such dispute to a court of
competent jurisdiction as set forth in Section 11.10(b).


 


(c)   Claims for Losses covered by a memorandum of
agreement of the nature described in Section 8.6(b) and claims for Losses
the validity and amount of which have been the subject of judicial
determination as described in Section 8.6(b) or shall have been
settled with the consent of the Indemnifying Party, as described in
Section 8.7, are hereinafter referred to, collectively, as “Agreed
Claims.”  Within ten
(10) Business Days of the determination of the amount of any of the Agreed
Claims, the Indemnifying Party shall pay to the Indemnified Party an amount
equal to the Agreed Claim by wire transfer in immediately available funds to
the bank account or accounts designated by the Indemnified Party in a notice to
the Indemnifying Party not less than two (2) Business Days prior to such
payment.


 


Section 8.7     Third-Party Claims. (a) If a
claim by a third-party is made against any Indemnified Party with respect to
which the Indemnified Party intends to seek 


 


72

















 


indemnification hereunder for any Loss under this
Article VIII, the Indemnified Party shall promptly notify the Indemnifying
Party of such claim. The Indemnifying Party shall have the right, but not the
obligation, to conduct and control, through counsel of its choosing, any third
party claim, action, suit or proceeding (a “Third-Party Claim”). If the
Indemnifying Party elects to conduct and control any Third-Party Claim, it
shall, within thirty (30) days of receipt of notice of the such Third-Party
Claim, notify the Indemnified Party of its intent to do so. If the Indemnifying
Party elects not to conduct and control any Third Party Claim, the Indemnified
Party may conduct and control any Third-Party Claim. The Indemnifying Party
shall permit the Indemnified Party to participate in, but not control, the
defense of any such action or suit which the Indemnifying Party has elected to
assume the defense of through counsel chosen by the Indemnified Party; provided,
however, that the fees and expenses of such counsel shall be borne by
the Indemnified Party. If the Indemnifying Party elects not to control or
conduct the defense or prosecution of a Third-Party Claim, the Indemnifying
Party nevertheless shall have the right to participate in the defense or
prosecution of any Third-Party Claim and, at its own expense, to employ counsel
of its own choosing for such purpose. Notwithstanding anything in this
Section 8.7(a) to the contrary, the Indemnifying Party shall not,
without the written consent of the Indemnified Party, which consent shall not
be unreasonably withheld, delayed or conditioned, settle or compromise any
Third-Party Claim unless the settlement or compromise involves only the payment
of monetary damages. Notwithstanding anything in this
Section 8.7(a) to the contrary, the Indemnified Party shall not,
without the written consent of the Indemnifying Party, settle or compromise any
Third-Party Claim.


 


(b)   The Parties shall cooperate in the defense or
prosecution of any Third-Party Claim, with such cooperation to include
(i) the retention and the provision of the Indemnifying Party records and
information that are reasonably relevant to such Third-Party Claim and
(ii) the making available of employees on a mutually convenient basis for
providing additional information and explanation of any material provided
hereunder.


 


Section 8.8     Sole Remedy/Waiver. The Parties
acknowledge and agree that, in the event that the Closing occurs, the remedies
provided for in this Agreement shall be the Parties’ sole and exclusive remedy
for any misrepresentation or breach of the warranties or covenants contained in
this Agreement. In furtherance of the foregoing, the Parties hereby waive,
effective upon the occurrence of the Closing, to the fullest extent permitted
by applicable Law, any and all other rights, claims and causes of action
(including rights of contribution, if any, and claims for rescission) for
breach of the warranties or covenants contained in this Agreement; provided,
however, that the foregoing shall not apply to deliberate
misrepresentations by any Party or any of its Affiliates.


 


ARTICLE
IX



GUARANTEE


 


Section 9.1     Guarantee. From and after the date
of this Agreement, Guarantor hereby irrevocably, absolutely and unconditionally
guarantees the due and punctual payment of all amounts required to be paid by
Purchaser under this Agreement when the same shall become due and payable,
according to the terms hereof. This guarantee shall be a continuing guarantee
and shall remain in full force and effect until, and Guarantor’s liability
under this guarantee shall 


 


73

















 


terminate upon, payment in full of all such amounts by
Purchaser. Guarantor hereby expressly waives all (i) presentment,
(ii) demands for payment or performance, (iii) diligence,
(iv) demands of protest, dishonor, or reliance thereon, and
(v) protests of non-payment. Guarantor acknowledges that its obligations
under this Section 9.1 shall not be released or discharged in whole or in
part by the insolvency, bankruptcy, liquidation, termination, dissolution,
merger, consolidation or other business combinations of Purchaser.


 


ARTICLE
X



TERMINATION


 


Section 10.1   Termination. This Agreement may be
terminated at any time prior to the Closing:


 


(a)   by written agreement of Purchaser and Seller;


 


(b)   by either Purchaser or Seller, by giving
written notice of such termination to the other Party, if the Closing shall not
have occurred on or prior to the first anniversary of the date hereof (the “End
Date”) (unless the failure to consummate the Closing by such date shall be
due to the failure of the Party seeking to terminate this Agreement to have fulfilled
any of its obligations under this Agreement); provided, that if, as of
the End Date, all conditions to this Agreement have been satisfied or waived
(other than conditions that by their nature cannot be satisfied until the
Closing), other than the condition set forth in Section 6.1(b), then
either Party may, by written notice to the other Party, extend the End Date to
5:00 p.m. (New York time) on the date that is fifteen (15) months after
the date of this Agreement.


 


(c)   by either Purchaser or Seller if any court of
competent jurisdiction or other competent Governmental Authority shall have
issued an Order or taken any other action permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement and such
Order or other action shall have become final and nonappealable;


 


(d)   by either Purchaser or Seller upon the
earlier to occur of (i) the filing of a complaint by a Governmental
Authority seeking to enjoin the consummation of the transactions contemplated
by this Agreement and (ii) the entry of an Order seeking to preliminarily
enjoin the consummation of the transactions contemplated by this Agreement;


 


(e)   by Purchaser if any of the representations or
warranties of Seller contained in this Agreement are inaccurate or untrue to
the extent that any such inaccuracy or untruth would cause the failure of the
condition set forth in Section 6.2(b) or if Seller has failed to
discharge and fulfill any of its covenants or agreements contained in this
Agreement to the extent that any such failure would cause the failure of the
condition set forth in Section 6.2(a), and such inaccuracy or failure has
not been cured within thirty (30) days after written notice of such failure,
inaccuracy or untruth has been given to Seller; or


 


(f)    by Seller if any of the representations or
warranties of Purchaser contained in this Agreement are inaccurate or untrue to
the extent that any such inaccuracy or untruth would cause the failure of the
condition set forth in Section 6.3(b) or if Purchaser has failed to
discharge 


 


74

















 


and fulfill any of its covenants or agreements
contained in this Agreement to the extent that any such failure would cause the
failure of the condition set forth in Section 6.3(a), and such inaccuracy
or failure has not been cured within thirty (30) days after written notice of
such failure, inaccuracy or untruth has been given to Purchaser.


 


Section 10.2   Effect of Termination. (a) In the
event of the termination of this Agreement in accordance with
Section 10.1, this Agreement shall thereafter become void and have no
effect, and no Party shall have any Liability to the other Party or their
respective Affiliates, directors, officers or employees except for the
obligations of the Parties contained in this Section 10.2 and in Sections
5.1 (“Information and Documents”), 11.1 (“Notices”), 11.7 (“Public
Disclosure”), 11.8 (“Return of Information”), 11.9 (“Expenses”) and 11.10
(“Governing Law; Jurisdiction; Waiver of Jury Trial”) and except that nothing
herein will relieve any Party from Liability for any willful and deliberate
breach of any covenant set forth in this Agreement prior to such termination.


 


(b)If this Agreement is
terminated in accordance with Section 10.1, Purchaser agrees that the
prohibition in the Confidentiality Agreement restricting Purchaser’s ability to
solicit any Business Employees to join the employ of Purchaser or any of its
Affiliates shall be extended to a period of three (3) years from the date
of such termination.


 


ARTICLE
XI



MISCELLANEOUS


 


Section 11.1   Notices. Except as otherwise expressly
provided in this Agreement, any notice or other communication required or
permitted under this Agreement shall be in writing and deemed to have been duly
given (i) five (5) Business Days following deposit in the mails if
sent by registered or certified mail, postage prepaid, (ii) when sent, if
sent by facsimile transmission and if receipt thereof is confirmed by machine
generated receipt, (iii) when delivered, if delivered personally to the
intended recipient and (iv) two (2) Business Days following deposit
with a nationally recognized overnight courier service, in each case addressed
as follows:


 


To
Seller:


 


c/o Tyco Electronics Ltd.


1050 Westlakes Drive


Berwyn, PA 19312


Attn:       General
Counsel


Facsimile:       (610) 893-9602


 


and


 


Tyco Electronics Ltd.


21 Lowder Street


Dedham, MA 02026


Attn:       Jeanne
Quirk


Facsimile:       (617) 848-0630


 


75

















 


with a
copy (which shall not constitute notice) to:


 


Davis
Polk & Wardwell


450
Lexington Avenue


New
York, New York  10017


Attn:       William
Aaronson, Esq.


Facsimile:       (212) 450-3397


 


To
Purchaser:


 


Cobham Defense Electronic Systems Corporation


58 Main Street, Route 117


Bolton, Massachusetts 01740


Attn:       David V. Gaggin


Facsimile:  (978) 779-2906


 


with a
copy (which shall not constitute notice) to:


 


Jaeckle
Fleischmann & Mugel, LLP


12
Fountain Plaza


Suite 800


Buffalo,
New York  14052


Attn:       Joseph
P. Kubarek, Esq.


Kristen M. Birmingham, Esq.


Facsimile:       (716)
856-0432


 


Section 11.2   Joinder. At the Closing, the Conveyed
Entities, shall execute a joinder to this Agreement pursuant to which they will
assume, and will be obligated with Purchaser and each other on a joint and
several basis, to perform and satisfy each of Purchaser’s obligations under
this Agreement.


 


Section 11.3   Amendment; Waiver. Except as
otherwise expressly provided in this Agreement, any provision of this Agreement
may be amended or waived if, and only if, such amendment or waiver is in
writing and signed, in the case of an amendment, by Purchaser and Seller or, in
the case of a waiver, by the Party against whom the waiver is to be effective.
No failure or delay by any Party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.


 


Section 11.4   Assignment. No Party to this Agreement
may assign any of its rights or obligations under this Agreement without the
prior written consent of the other Party; provided, however, that
Purchaser may assign its rights and obligations under this Agreement, in whole
or in part, to its Affiliates without the consent of Seller; provided, further,
that no such assignment shall relieve Purchaser or Guarantor of any of its
obligations hereunder.


 


Section 11.5   Entire Agreement. This Agreement
(including all Schedules and Exhibits) contains the entire agreement between
the Parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings, oral or written, with respect to 


 


76

















 


such matters
except for (i) the Confidentiality Agreement which will remain in full
force and effect for the term provided for therein if this Agreement is
terminated in accordance with Section 10.1 and (ii) any written
agreement of the Parties that expressly provides that it is not superseded by
this Agreement.


 


Section 11.6   Parties in Interest. This Agreement
shall inure to the benefit of and be binding upon the Parties and their
respective successors and permitted assigns. Nothing in this Agreement, express
or implied, is intended to confer upon any Person other than Purchaser, Seller
or their successors or permitted assigns any rights or remedies under or by
reason of this Agreement; provided, however, the Conveyed Entity
Covered Persons shall be third-party beneficiaries of the obligations of
Purchaser set forth in Section 5.12 and the applicable Affiliates of
Seller shall be third-party beneficiaries of the obligations of Purchaser set
forth in Section 5.13.


 


Section 11.7   Public Disclosure. Notwithstanding
anything herein to the contrary, each of Purchaser and Seller agrees that, except
as may be required to comply with the requirements of any applicable Laws and
the rules and regulations of each stock exchange upon which the securities
of such Party is listed, if any, no press release or similar public
announcement or communication shall be made concerning the execution or
performance of this Agreement unless the Parties shall have consulted in
advance with respect thereto.


 


Section 11.8   Return of Information. If for any
reason whatsoever the transactions contemplated by this Agreement are not
consummated, Purchaser shall promptly return to Seller all books and records
furnished by Seller, any other Seller Entity, any Conveyed Entity or any of
their respective Affiliates, agents, employees, or representatives (including
all copies, summaries and abstracts, if any, thereof) in accordance with the
terms of the Confidentiality Agreement.


 


Section 11.9   Expenses. Except as otherwise
expressly provided in this Agreement, whether or not the transactions
contemplated by this Agreement are consummated, all costs and expenses incurred
in connection with this Agreement and the transactions contemplated hereby
shall be borne by the Party incurring such expenses.


 


Section 11.10    Governing
Law; Jurisdiction; Waiver of Jury Trial. (a) This Agreement shall be
governed by and construed in accordance with the Laws of the State of New York,
without regard to the conflicts of law principles of such state.


 


(b)   With respect to any suit, action or
proceeding relating to this Agreement (each, a “Proceeding”), each Party
irrevocably (i) agrees and consents to be subject to the exclusive
jurisdiction of the United States District Court for the Southern District of
New York or any New York State court sitting in New York City
and (ii) waives any objection which it may have at any time to the laying
of venue of any Proceeding brought in any such court, waives any claim that
such Proceeding has been brought in an inconvenient forum and further waives
the right to object, with respect to such Proceeding, that such court does not
have any jurisdiction over such Party. The foregoing consent to jurisdiction
shall not constitute general consent to service of process in the State of New
York for any purpose except as provided above and shall not be deemed to confer
rights on any Person other than the respective Parties to this Agreement. 


 


77

















 


Each of Seller and Purchaser irrevocably agrees that
service of any process, summons, notice or document by United States registered
mail to such Party’s address set forth above shall be effective service of
process for any action, suit or proceeding in New York with respect to any
matters for which it has submitted to jurisdiction pursuant to this
Section 11.10(b).


 


(c)   EACH OF PURCHASER AND SELLER HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION AS BETWEEN THE PARTIES DIRECTLY
OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR DISPUTES RELATING HERETO. EACH OF PURCHASER
AND SELLER (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(II) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 11.10(c).


 


(d)   The Parties agree that the prevailing party
or parties, as the case may be, in any suit, action or proceeding relating to
this Agreement shall be entitled to reimbursement of all costs of litigation,
including reasonable attorneys’ fees, from the non-prevailing party. For
purposes of this Section 11.10(d), each of the “prevailing party” and the
“non-prevailing party” in any suit, action or proceeding shall be the party
designated as such by the court or other appropriate official presiding over
such suit, action or proceeding, such determination to be made as a part of the
judgment rendered thereby.


 


Section 11.11     Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original and all of which shall constitute one and the same
agreement, and shall become effective when one or more counterparts have been
signed by each of the Parties and delivered to the other Party, it being
understood that all Parties need not sign the same counterpart.


 


Section 11.12     Headings.
The heading references herein and the table of contents hereto are for
convenience purposes only, do not constitute a part of this Agreement and shall
not be deemed to limit or affect any of the provisions hereof.


 


Section 11.13     No
Strict Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event any ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by all Parties and no presumption or burden of proof
shall arise favoring or disfavoring any Party by virtue of the authorship of
any provision of this Agreement.


 


Section 11.14     Severability.
The provisions of this Agreement shall be deemed severable and the invalidity
or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof. If any term or other provision
of this Agreement, or the application thereof to any Person or any
circumstance, is invalid, illegal or unenforceable, (a) a suitable and
equitable provision shall be substituted therefore in order to carry out, so
far as 


 


78

















 


may be valid and enforceable, the intent and purpose
of such invalid or unenforceable provision and (b) the remainder of this
Agreement and the application of such provision to other Persons or
circumstances shall not be affected by such invalidity, illegality or
unenforceability, nor shall such invalidity, illegality or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.


 


Section 11.15     Specific
Performance. The parties hereto agree that irreparable damage would occur
if any provision of this Agreement were not performed in accordance with the
terms hereof and that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement or to enforce specifically
the performance of the terms and provisions hereof in the United States
District Court for the Southern District of New York or any New York State
court sitting in New York City, in addition to any other remedy to which they
are entitled at law or in equity.


 


*     *     *    
*     *


 


79

















 


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


 


 


	
   

  	
  TYCO ELECTRONICS GROUP S.A.

  
	
   

  
	
   

  
	
   

  	
  By:

  	
   /s/ Terrence
  R. Curtin

  
	
   

  	
  Name:

  	
  Terrence R. Curtin

  
	
   

  	
  Title:

  	
  Executive Vice President and Chief

  Financial Officer

  



 


 


	
   

  	
  COBHAM DEFENSE ELECTRONIC SYSTEMS

  CORPORATION

  
	
   

  
	
   

  
	
   

  	
  By:

  	
   /s/ David V.
  Gaggin

  
	
   

  	
  Name:

  	
  David V. Gaggin

  
	
   

  	
  Title:

  	
  President

  



 

















 


	
   

  	
  COBHAM PLC, solely for the purposes of Article

  IX

  
	
   

  
	
   

  
	
   

  	
  By:

  	
   /s/ Ken
  Morrison

  
	
   

  	
  Name:

  	
  Ken Morrison

  
	
   

  	
  Title:

  	
  Group Director of Corporate Finance

  and Tax