CODE SECTION 1060 AND THE TREASURY REGULATIONS
THEREUNDER (AND ANY SIMILAR PROVISION OF STATE, LOCAL OR FOREIGN LAW, AS
APPROPRIATE).
WITHIN THIRTY (30) CALENDAR DAYS AFTER THE FINAL CLOSING
STATEMENT IS DETERMINED AND BECOME FINAL, METHODE SHALL DETERMINE AND DELIVER TO
THE SHAREHOLDER, METHODE'S GOOD FAITH DETERMINATION OF THE ALLOCATION OF THE
PURCHASE PRICE (AND ALL OTHER CAPITALIZED COSTS) AMONG THE PURCHASED ASSETS AND
PURCHASED SHARES, BY JURISDICTION AND BY ASSET CATEGORY, AFTER ADJUSTMENT TO
REFLECT THE FINAL DETERMINATION OF THE CLOSING NET BOOK VALUE IN ACCORDANCE WITH
SECTION 2.3, WHICH ADJUSTED ALLOCATION SHALL BE MADE IN ACCORDANCE WITH CODE
SECTION 1060 AND THE TREASURY REGULATIONS THEREUNDER (AND ANY SIMILAR PROVISION
OF STATE, LOCAL OR FOREIGN LAW, AS APPROPRIATE), AND WHICH ALLOCATION SHALL BE
BINDING UPON METHODE AND THE SELLING PARTIES.
METHODE AND THE SELLING PARTIES
AND THEIR AFFILIATES SHALL REPORT, ACT AND FILE TAX RETURNS (INCLUDING INTERNAL
REVENUE SERVICE FORM 8594) IN ALL RESPECTS AND FOR ALL TAX PURPOSES CONSISTENT
WITH SUCH ALLOCATION.
NEITHER METHODE NOR THE SELLING PARTIES SHALL TAKE ANY
POSITION (WHETHER IN TAX
7
AUDITS, TAX RETURNS OR OTHERWISE) THAT IS INCONSISTENT WITH SUCH ALLOCATION
UNLESS REQUIRED TO DO SO BY APPLICABLE LAW.
3.
ASSUMED LIABILITIES AND EXCLUDED LIABILITIES.
3.1.
ASSUMED LIABILITIES. ON THE TERMS AND SUBJECT TO THE CONDITIONS
CONTAINED HEREIN, AT THE CLOSING, THE BUYERS SHALL ASSUME AND AGREE TO PERFORM
AND DISCHARGE WHEN AND AS DUE THE LIABILITIES AND OBLIGATIONS SET FORTH IN
SECTIONS 3.1.1, 3.1.2 AND 3.1.3 AS THE SAME MAY EXIST AT THE CLOSING DATE, AND
NO OTHERS (THE "ASSUMED LIABILITIES"):
3.1.1.
ACCOUNTS PAYABLE AND ORDINARY COURSE LIABILITIES.
THE CURRENT
LIABILITIES CONSISTING OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES OF THE SELLERS
ARISING IN THE ORDINARY COURSE OF BUSINESS (INCLUDING ACCOUNTS PAYABLE OF THE
SELLERS PAYABLE TO OTHER TARGET COMPANIES SOLELY TO THE EXTENT THAT SUCH
PAYABLES ARE INCLUDED IN THE ACQUIRED ASSETS AS RECEIVABLES OF THE APPLICABLE
TARGET COMPANY PAYEE) AS THEY EXIST AT THE CLOSING DATE, IN EACH CASE TO THE
EXTENT REFLECTED ON THE FINAL CLOSING STATEMENT.
3.1.2.
EXECUTORY AGREEMENTS.
LIABILITIES AND OBLIGATIONS WHICH EXIST AT
OR ACCRUE FOLLOWING THE CLOSING DATE UNDER THE CONTRACTS DESCRIBED IN
SECTION 1.1.4 HEREOF, BUT EXCLUDING (I) CONTRACTS REQUIRED TO BE DISCLOSED IN
SCHEDULE 5.11, SCHEDULE 5.12, SCHEDULE 5.17 OR SCHEDULE 5.22 AND NOT DISCLOSED
THEREON, AND (II) CONTRACTS DESCRIBED IN SECTION 1.3 HEREOF.
3.1.3.
WARRANTY CLAIMS.
THE WARRANTY OBLIGATIONS OF THE SELLERS PENDING
AS OF OR ARISING AFTER THE CLOSING DATE UNDER THE HETRONIC WARRANTIES IDENTIFIED
ON SCHEDULE 5.24 FOR FINISHED GOODS OR COMPONENTS OR PARTS SOLD BY THE SELLERS
IN THE ORDINARY COURSE ON OR PRIOR TO THE CLOSING DATE OR FOR INVENTORY ACQUIRED
BY BUYERS FROM ANY SELLER HEREUNDER AND SUBSEQUENTLY SOLD BY BUYER
(COLLECTIVELY, THE "ASSUMED WARRANTY CLAIMS").
3.2.
EXCLUDED LIABILITIES.
EXCEPT AS SPECIFICALLY PROVIDED IN
SECTION 3.1 HEREOF, NEITHER METHODE NOR ANY BUYER SHALL ASSUME, OR IN ANY WAY
BECOME LIABLE FOR, ANY LIABILITIES OF THE SELLING PARTIES OF ANY KIND OR NATURE,
WHETHER ACCRUED, ABSOLUTE, CONTINGENT