Document:

Exhibit 4.1

 

[LOGO]

 

	
  NUMBER

  	
   

  	
  SHARES

  
	
   

  	
   

  	
   

  
	
  TEL

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COMMON STOCK

  
	
   

  	
   

  	
  PAR VALUE $0.20

  
	
   

  	
   

  	
  INCORPORATED UNDER THE

  
	
   

  	
   

  	
  LAWS OF BERMUDA

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CUSIP G9144P 10 5

  
	
   

  	
   

  	
  PLEASE SEE REVERSE

  
	
   

  	
   

  	
  FOR CERTAIN DEFINITIONS

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [GRAPHIC]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THIS CERTIFIES THAT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  TYCO ELECTRONICS LTD.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  THIS CERTIFICATE IS TRANSFERABLE

  	
  IS THE OWNER OF

  	
   

  
	
  IN JERSEY CITY, NJ, NEW YORK, NY,

  	
  FULLY PAID AND NON-ASSESSABLE SHARES
  OF THE COMMON STOCK OF TYCO ELECTRONICS LTD.

  
	
  PITTSBURGH, PA OR LONDON, ENGLAND

   

   

   

   

   

  Countersigned and Registered:

  MELLON INVESTOR SERVICES LLC

  Transfer Agent and Registrar

  	
  transferable only on the
  books of the corporation by the holder hereof in person or by attorney duly
  authorized, upon surrender of this certificate duly endorsed or assigned.
  This certificate and the shares represented hereby are subject to the laws of
  the Islands of Bermuda and to the Memorandum of Association and Bye-Laws of
  the corporation, as now or hereafter amended. This certificate is not valid
  until countersigned by the Transfer Agent and registered by the Registrar.
  Witness the facsimile seal of the corporation and the facsimile signatures of
  its duly authorized officers.

  
	
   

  	
   

  
	
  By:

  	
  DATED

  	
   

  
	
   

  	
   

  	
   

  
						

 

	
   

  	
   

  	
  

  	
  

  	
  [SEAL]

  
	
  Authorized Signature

  	
   

  	
  PRESIDENT

  AND CHIEF EXECUTIVE OFFICER

  	
  EXECUTIVE VICE PRESIDENT

  AND CHIEF FINANCIAL OFFICER

  

 

	
  AMERICAN BANK NOTE COMPANY

  	
   

  	
  PRODUCTION COORDINATOR:
  MIKE PETERS 931-490-1714

  
	
  711 ARMSTRONG LANE

  	
   

  	
  PROOF OF MAY 11, 2007

  
	
  COLUMBIA, TENNESSEE 38401

  	
   

  	
  TYCO ELECTRONICS

  
	
  (931) 388-3003

  	
   

  	
  TSB 26020 FC

  
	
  SALES:

  	
  R. JOHNS 

  	
  516-731-2885

  	
   

  	
  Operator:                Ron/AP

  
	
  / ETHER 7 / LIVE JOBS /
  T / TYCO 26020 FC

  	
   

  	
  Rev. 9

  
					

 

PLEASE
INITIAL THE APPROPRIATE SELECTION FOR THIS PROOF:    OK
AS IS      OK WITH CHANGES         
MAKE CHANGES AND SEND ANOTHER PROOF

 

Colors Selected for Printing: Certificate prints in
4-color process. IMAGE “BLEEDS” OFF CERTIFICATE.

 

COLOR: This proof was printed from a
digital file or artwork on a graphics quality, color laser printer. It is a
good representation of the color as it will appear on the final product.
However, it is not an exact color rendition, and the final printed product may
appear slightly different from the proof due to the difference between the dyes
and printing ink.

 

NOTE:
TEXT RECEIVED BY MODEM OR E-MAIL IS NOT PROOFREAD WORD FOR WORD.

 

 

TYCO ELECTRONICS LTD.

 

The Corporation will furnish
without charge to each shareholder who so requests a copy of the powers,
designations, preferences and relative, participating, optional or other
special rights of each class of shares or series thereof, and the
qualifications, limitations, or restrictions of such preferences and/or rights.

 

The following abbreviations,
when used in the inscription on the face of this certificate, shall be
construed as though they were written out in full according to applicable laws
or regulations:

 

	
  TEN COM

  	
  –

  	
  as tenants in common

  	
  UNIF GIFT MIN ACT–

  	
   

  	
  Custodian

  	
   

  
	
  TEN ENT

  	
  –

  	
  as tenants by the
  entireties

  	
   

  	
  (Cust)

  	
   

  	
  (Minor)

  
	
  JTTEN

  	
  –

  	
  as joint tenants with right
  of

  	
   

  	
  under Uniform Gifts to
  Minors

  
	
   

  	
   

  	
  survivorship and not as
  tenants

  	
   

  	
  Act

  	
   

  	
   

  
	
   

  	
   

  	
  in common

  	
   

  	
   

  	
  (State)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Additional
  abbreviations may also be used though not in the above list.

  
									

 

FOR VALUE RECEIVED                
hereby sell, assign and transfer unto

 

	
  Please Insert Social Security or Other 

  Identifying Number of Assignee

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

	
   

  
	
  (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF
  ASSIGNEE)

  
	
   

  
	
   

  
	
   

  
	
  Shares

  
	
  of the capital stock represented by the
  within Certificate and do hereby irrevocably constitute and appoint

  
	
   

  
	
   

  
	
  Attorney

  
	
  to transfer the said stock on the books of
  the within-named Company with full power of substitution in the premises.

  
	
   

  
	
   

  
	
  Dated

  	
   

  	
   

  

 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NOTICE: The Signature to this assignment must
  correspond with the name as written upon the face of the Certificate in every
  particular, without alteration or enlargement, or any change whatever.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Signature(s) Guaranteed:

  	
   

  	
   

  
	
   

  	
  THE SIGNATURE(S) SHOULD BE GUARANTEED BYAN ELIGIBLE
  GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND
  CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION
  PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.

  	
   

  
				

 

 

	
  AMERICAN BANK NOTE COMPANY

  	
   

  	
  PRODUCTION COORDINATOR:
  MIKE PETERS 931-490-1714

  
	
  711 ARMSTRONG LANE

  	
   

  	
  PROOF OF FEBRUARY 21,
  2007

  
	
  COLUMBIA, TENNESSEE 38401

  	
   

  	
  TYCO ELECTRONICS

  
	
  (931) 388-3003

  	
   

  	
  TSB 26020 BK

  
	
  SALES:

  	
  R. JOHNS 

  	
  516-731-2885

  	
   

  	
  Operator:                Ron

  
	
  / ETHER 7 / LIVE JOBS /
  T / TYCO 26020 BK

  	
   

  	
  Rev. 3

  
					

 

PLEASE
INITIAL THE APPROPRIATE SELECTION FOR THIS PROOF:    OK
AS IS      OK WITH CHANGES         
MAKE CHANGES AND SEND ANOTHER PROOFExhibit 10.1

 

TAX SHARING AGREEMENT

 

by and among

 

TYCO INTERNATIONAL LTD.,

 

COVIDIEN LTD.,

 

and

 

TYCO ELECTRONICS LTD.

 

Dated as of            ,
2007

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  DEFINITIONS AND
  INTERPRETATION

  	
   

  	
  2

  
	
  Section 1.1

  	
   

  	
  Definitions

  	
   

  	
  2

  
	
  Section 1.2

  	
   

  	
  References; Interpretation

  	
   

  	
  16

  
	
  Section 1.3

  	
   

  	
  Effective Time

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  PREPARATION AND FILING OF
  TAX RETURNS

  	
   

  	
  17

  
	
  Section 2.1

  	
   

  	
  Responsibility of Parties
  to Prepare and File Pre-Distribution Income Tax Returns

  	
   

  	
  17

  
	
  Section 2.2

  	
   

  	
  Responsibility of Parties
  to Prepare and File Straddle Income Tax Returns

  	
   

  	
  19

  
	
  Section 2.3

  	
   

  	
  Responsibility of Parties
  to Prepare and File Post-Distribution Income Tax Returns and Non-Income Tax
  Returns

  	
   

  	
  21

  
	
  Section 2.4

  	
   

  	
  Time of Filing Tax
  Returns; Manner of Tax Return Preparation

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  RESPONSIBILITY FOR PAYMENT
  OF TAXES

  	
   

  	
  21

  
	
  Section 3.1

  	
   

  	
  Responsibility of Tyco for
  Taxes

  	
   

  	
  21

  
	
  Section 3.2

  	
   

  	
  Responsibility of
  Electronics for Taxes

  	
   

  	
  21

  
	
  Section 3.3

  	
   

  	
  Responsibility of
  Healthcare for Taxes

  	
   

  	
  22

  
	
  Section 3.4

  	
   

  	
  Timing of Payments of
  Taxes

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  REFUNDS, CARRYBACKS AND
  AMENDED TAX RETURNS

  	
   

  	
  23

  
	
  Section 4.1

  	
   

  	
  Refunds

  	
   

  	
  23

  
	
  Section 4.2

  	
   

  	
  Carrybacks

  	
   

  	
  23

  
	
  Section 4.3

  	
   

  	
  Amended Tax Returns

  	
   

  	
  23

  
	
  Section 4.4

  	
   

  	
  Agreement from Party
  Administering and Controlling Audit

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  DISTRIBUTION TAXES

  	
   

  	
  24

  
	
  Section 5.1

  	
   

  	
  Liability for Distribution
  Taxes

  	
   

  	
  24

  
	
  Section 5.2

  	
   

  	
  Payment for Use of Tax
  Attributes by Parties at Fault

  	
   

  	
  24

  
	
  Section 5.3

  	
   

  	
  Definition of Fault

  	
   

  	
  25

  
	
  Section 5.4

  	
   

  	
  Limits on Proposed
  Acquisition Transactions and Other Transactions During Restricted Period

  	
   

  	
  25

  
	
  Section 5.5

  	
   

  	
  Advance Disclosure of
  Non-Public Transactions

  	
   

  	
  27

  
	
  Section 5.6

  	
   

  	
  Qualified Tax Counsel
  Advance Conflict Waiver

  	
   

  	
  27

  
	
  Section 5.7

  	
   

  	
  IRS Ruling, Tax
  Representation Letters, and Tax Opinions; Consistency

  	
   

  	
  27

  
	
  Section 5.8

  	
   

  	
  Timing of Payment of Taxes

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  EMPLOYEE BENEFIT MATTERS

  	
   

  	
  27

  
	
  Section 6.1

  	
   

  	
  Deferred Compensation
  Deductions

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  INDEMNIFICATION

  	
   

  	
  28

  
	
  Section 7.1

  	
   

  	
  Indemnification Obligations
  of Tyco

  	
   

  	
  28

  
	
  Section 7.2

  	
   

  	
  Indemnification
  Obligations of Healthcare

  	
   

  	
  28

  
	
  Section 7.3

  	
   

  	
  Indemnification
  Obligations of Electronics

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  PAYMENTS

  	
   

  	
  29

  
	
  Section 8.1

  	
   

  	
  Payments

  	
   

  	
  29

  
						

 

i

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 8.2

  	
   

  	
  Treatment of Payments made
  Pursuant to Tax Sharing Agreement

  	
   

  	
  30

  
	
  Section 8.3

  	
   

  	
  Treatment of Payments made
  Pursuant to Separation and Distribution Agreement

  	
   

  	
  30

  
	
  Section 8.4

  	
   

  	
  Payments Net of Tax
  Benefit Actually Realized

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  AUDITS

  	
   

  	
  31

  
	
  Section 9.1

  	
   

  	
  Notice

  	
   

  	
  31

  
	
  Section 9.2

  	
   

  	
  Pre-Distribution Audits

  	
   

  	
  31

  
	
  Section 9.3

  	
   

  	
  Payment of Audit Amounts

  	
   

  	
  37

  
	
  Section 9.4

  	
   

  	
  Correlative Adjustments

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  COOPERATION AND EXCHANGE
  OF INFORMATION

  	
   

  	
  40

  
	
  Section 10.1

  	
   

  	
  Cooperation and Exchange
  of Information

  	
   

  	
  40

  
	
  Section 10.2

  	
   

  	
  Retention of Records

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  ALLOCATION OF TAX
  ATTRIBUTES, DUAL CONSOLIDATED LOSSES AND OTHER TAX MATTERS

  	
   

  	
  42

  
	
  Section 11.1

  	
   

  	
  Allocation of Tax
  Attributes

  	
   

  	
  42

  
	
  Section 11.2

  	
   

  	
  Dual Consolidated Losses

  	
   

  	
  42

  
	
  Section 11.3

  	
   

  	
  Payment for Use of Certain
  Tax Attributes

  	
   

  	
  42

  
	
  Section 11.4

  	
   

  	
  Third Party Tax
  Indemnities and Benefits

  	
   

  	
  43

  
	
  Section 11.5

  	
   

  	
  Allocation of Tax Items

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
  DEFAULTED AMOUNTS

  	
   

  	
  43

  
	
  Section 12.1

  	
   

  	
  General

  	
   

  	
  43

  
	
  Section 12.2

  	
   

  	
  Subsidiary Funding

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XIII

  	
  DISPUTE RESOLUTION

  	
   

  	
  44

  
	
  Section 13.1

  	
   

  	
  Negotiation

  	
   

  	
  44

  
	
  Section 13.2

  	
   

  	
  Mediation

  	
   

  	
  44

  
	
  Section 13.3

  	
   

  	
  Arbitration

  	
   

  	
  44

  
	
  Section 13.4

  	
   

  	
  Arbitration with Respect
  to Monetary Damages

  	
   

  	
  45

  
	
  Section 13.5

  	
   

  	
  Arbitration Period

  	
   

  	
  45

  
	
  Section 13.6

  	
   

  	
  Treatment of Negotiations,
  Mediation, and Arbitration

  	
   

  	
  45

  
	
  Section 13.7

  	
   

  	
  Continuity of Service and
  Performance

  	
   

  	
  46

  
	
  Section 13.8

  	
   

  	
  Costs

  	
   

  	
  46

  
	
  Section 13.9

  	
   

  	
  Consolidation

  	
   

  	
  46

  
	
  Section 13.10

  	
   

  	
  Exception to Arbitration

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XIV

  	
  MISCELLANEOUS

  	
   

  	
  46

  
	
  Section 14.1

  	
   

  	
  Counterparts; Facsimile
  Signatures

  	
   

  	
  46

  
	
  Section 14.2

  	
   

  	
  Survival

  	
   

  	
  47

  
	
  Section 14.3

  	
   

  	
  Notices

  	
   

  	
  47

  
	
  Section 14.4

  	
   

  	
  Waivers

  	
   

  	
  47

  
	
  Section 14.5

  	
   

  	
  Amendments

  	
   

  	
  47

  
	
  Section 14.6

  	
   

  	
  Assignment

  	
   

  	
  47

  
	
  Section 14.7

  	
   

  	
  Successors and Assigns

  	
   

  	
  47

  
							

 

ii

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 14.8

  	
   

  	
  Certain Termination and
  Amendment Rights

  	
   

  	
  48

  
	
  Section 14.9

  	
   

  	
  No Circumvention

  	
   

  	
  48

  
	
  Section 14.10

  	
   

  	
  Subsidiaries

  	
   

  	
  48

  
	
  Section 14.11

  	
   

  	
  Third Party Beneficiaries

  	
   

  	
  48

  
	
  Section 14.12

  	
   

  	
  Title and Headings

  	
   

  	
  48

  
	
  Section 14.13

  	
   

  	
  Exhibits and Schedules

  	
   

  	
  48

  
	
  Section 14.14

  	
   

  	
  Governing Law

  	
   

  	
  48

  
	
  Section 14.15

  	
   

  	
  Consent to Jurisdiction

  	
   

  	
  48

  
	
  Section 14.16

  	
   

  	
  Specific Performance

  	
   

  	
  49

  
	
  Section 14.17

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
  49

  
	
  Section 14.18

  	
   

  	
  Force Majeure

  	
   

  	
  49

  
	
  Section 14.19

  	
   

  	
  Construction

  	
   

  	
  49

  
	
  Section 14.20

  	
   

  	
  Changes in Law

  	
   

  	
  50

  
	
  Section 14.21

  	
   

  	
  Authority

  	
   

  	
  50

  
	
  Section 14.22

  	
   

  	
  Severability

  	
   

  	
  50

  
	
  Section 14.23

  	
   

  	
  Tax Sharing Agreements

  	
   

  	
  50

  
	
  Section 14.24

  	
   

  	
  Exclusivity

  	
   

  	
  50

  
	
  Section 14.25

  	
   

  	
  No Duplication; No Double
  Recovery

  	
   

  	
  50

  
						

 

	
  Schedules

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1.1(9)

  	
   

  	
  List of ATOB Entities

  
	
  Schedule 1.1(60)(c)

  	
   

  	
  List of U.S. state and
  local Taxes

  
	
  Schedule 1.1(92)

  	
   

  	
  List of Qualified Tax
  Counsel

  
	
  Schedule 1.1(99)

  	
   

  	
  List of Section 355
  Entities

  
	
  Schedule 1.1(118)

  	
   

  	
  List of Transferee
  Entities

  
	
  Schedule 1.1(119)

  	
   

  	
  List of Transferor
  Entities

  
	
  Schedule 2.1(a)

  	
   

  	
  Preparation of
  Pre-Distribution Income Tax Returns

  
	
  Schedule 2.2(a)

  	
   

  	
  Preparation of Straddle
  Income Tax Returns

  
	
  Schedule 9.2(c)(iv-1)

  	
   

  	
  Electronic Document
  Repository Exceptions

  
	
  Schedule 9.2(c)(iv-2)

  	
   

  	
  List of the
  Documents/Information to be made Available by the Audit Management Party

  
	
  Schedule 9.2(e)(ii)

  	
   

  	
  U.S. AMP Internal Costs
  and Expenses

  
	
  Schedule 9.2(h-1)

  	
   

  	
  Form of Power of Attorney

  
	
  Schedule 9.2(h-2)

  	
   

  	
  List of Activities where
  Signature of

  
	
   

  	
   

  	
  Representative Required

  
	
  Schedule 11.1

  	
   

  	
  Allocation of certain Tax
  Attributes

  
	
  Schedule 11.3

  	
   

  	
  Description of certain Tax
  Attributes

  
	
  Schedule 13.10

  	
   

  	
  Matters Excepted from
  Arbitration

  

 

iii

 

TAX SHARING AGREEMENT

 

THIS TAX SHARING AGREEMENT
(this “Agreement”) is made and entered into as of the     day of
             ,
2007, by and among Tyco International Ltd., a Bermuda corporation (“Tyco”),
Covidien Ltd., a Bermuda corporation (“Healthcare”), and Electronics Ltd., a
Bermuda corporation (“Electronics”). Each of Tyco, Healthcare, and Electronics
is sometimes referred to herein as a “Party” and collectively, as the “Parties”.

 

WITNESSETH:

 

WHEREAS, Tyco, acting
through its direct and indirect Subsidiaries, currently conducts a number of
businesses, including (i) the Healthcare Business (as defined herein), (ii) the
Electronics Business (as defined herein), and (iii) the Tyco Retained Business
(as defined herein);

 

WHEREAS, the Board of
Directors of Tyco has determined that it is appropriate, desirable and in the
best interests of Tyco and its stockholders to separate Tyco into three
separate, publicly traded companies, one for each of (i) the Healthcare
Business, which shall be owned and conducted, directly or indirectly, by
Healthcare, (ii) the Electronics Business, which shall be owned and conducted,
directly or indirectly, by Electronics, and (iii) the Tyco Retained Business
which shall be owned and conducted, directly or indirectly, by Tyco;

 

WHEREAS, in order to effect
such separation, the Board of Directors of Tyco has determined that it is
appropriate, desirable and in the best interests of Tyco and its stockholders
(i) to enter into a series of transactions whereby (A) Tyco and/or one or more
members of the Tyco Group will, collectively, own all of the Tyco Retained
Assets and assume (or retain) all of the Tyco Retained Liabilities, (B)
Healthcare and/or one or more members of the Healthcare Group will,
collectively, own all of the Healthcare Assets and assume (or retain) all of
the Healthcare Liabilities, and (C) Electronics and/or one or more members of
the Electronics Group will, collectively, own all of the Electronics Assets and
assume (or retain) all of the Electronics Liabilities and (ii) for Tyco to
distribute to the holders of Tyco Common Stock on a pro rata basis (in each
case without consideration being paid by such stockholders) (A) all of the
outstanding shares of common stock, par value $0.20 per share, of Healthcare
(the “Healthcare Common Stock”), and (B) all of the outstanding shares of
common stock, par value $0.20 per share, of Electronics (the “Electronics
Common Stock”) (such transactions as they may be amended or modified from time
to time, collectively, the “Plan of Separation”);

 

WHEREAS, it is the intention
of the Parties that each of the contributions of assets to, and the assumption
of liabilities by, Healthcare and Electronics together with the corresponding
distribution of all of the Healthcare Common Stock and the Electronics Common
Stock, respectively, shall qualify as a reorganization within the meaning of
Sections 368(a)(1)(D) and 355 of the Internal Revenue Code of 1986, as amended
(the “Code”);

 

WHEREAS, it is the intention
of the Parties that each of the distribution of Healthcare Common Stock and
Electronics Common Stock, respectively, to the stockholders of Tyco will
qualify as a tax-free under Section 355(a) of the Code to such stockholders and
as tax-free to Tyco under Section 361(c) of the Code;

 

1

 

WHEREAS, subject to Section
9.2, it is the intention of the Parties that all pre-separation U.S. federal,
state, and local audits will be managed, controlled and conducted by Tyco’s
U.S. Federal and State Audit Groups currently located in Boca Raton, Florida
(the “Boca Raton Audit Team”);

 

WHEREAS, notwithstanding the
implementation of certain internal transactions undertaken preparatory to and
in contemplation of aligning and properly capitalizing the Healthcare Business,
the Electronics Business, and the Tyco Retained Business prior to the
Distributions, it is the intention of the Parties that the shared
responsibility for certain Tax liabilities and certain Distribution Tax
liabilities be given effect no earlier than and only upon the Effective Time,
all as described more fully herein; and

 

WHEREAS, in connection with
the Plan of Separation, the Parties desire to set forth their agreement on the
rights and obligations with respect to handling and allocating Taxes and
related matters.

 

NOW, THEREFORE, in
consideration of the foregoing and the terms, conditions, covenants and
provisions of this Agreement, each of the Parties mutually covenant and agree
as follows:

 

ARTICLE I

 

DEFINITIONS AND INTERPRETATION

 

Section 1.1                                      Definitions. As used in this Agreement, the following terms shall have the
following meanings:

 

(1)                                  “AAA” has the meaning set forth in
Section 13.2.

 

(2)                                  “Acceptance Notice” has the meaning
set forth in Section 9.2(d)(iii).

 

(3)                                  “Active Business” means the business
conducted by each of the ATOB Entities as of the applicable distribution date.

 

(4)                                  “Administration Vote Notice” has the
meaning set forth in Section 9.2(d)(i).

 

(5)                                  “Affiliate” means a Person that
directly, or indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, a specified Person. A Person
shall be deemed to control another Person if such first Person possesses,
directly or indirectly, the power to direct, or cause the direction of, the
management and policies of such other Person, whether through the ownership of
voting securities, by contract or otherwise. For purposes hereof, none of the
Parties or their respective Subsidiaries shall be considered an “Affiliate” of
any of the other Parties or their respective Subsidiaries (determined on the
same basis).

 

(6)                                  “Agreement” has the meaning set forth
in the preamble hereto.

 

2

 

(7)                                  “Ancillary Agreements” has the meaning
set forth in the Separation and Distribution Agreement.

 

(8)                                  “Assets” has the meaning set forth in
the Separation and Distribution Agreement.

 

(9)                                  “ATOB Entities” mean the entities
listed on Schedule 1.1(9).

 

(10)                            “Audit” means any audit (including a
determination of the status of qualified and non-qualified employee benefit
plans), assessment of Taxes, other examination by or on behalf of any Taxing
Authority (including notices), proceeding, or appeal of such a proceeding
relating to Taxes, whether administrative or judicial, including proceedings
relating to competent authority determinations initiated by a Party or any of
its Subsidiaries.

 

(11)                            “Audit External Advisor” has the
meaning set forth in Section 9.2(c)(iii).

 

(12)                            “Audit Management Party” means the
Party responsible for administering and controlling an Audit pursuant to
Section 9.2(a), as may be changed from time to time in accordance with Section
9.2(d).

 

(13)                            “Audit Representative” means the
Senior Vice President and Chief Tax Officer of each Party (or such other
officer of a Party that may be designated by that Party’s Chief Financial
Officer from time to time).

 

(14)                            “Bankruptcy” means, with respect to a
Person:

 

(a)                                  the filing of an application by the Person
for, or a consent to, the appointment of a trustee of the Person’s assets;

 

(b)                                 the filing by the Person of a voluntary
petition in bankruptcy or the filing of a pleading in any court of record
admitting in writing the Person’s inability to pay debts as they come due;

 

(c)                                  a general assignment by such Person for the
benefit of creditors;

 

(d)                                 the filing by the Person of an answer
admitting the material allegations of, or the Person’s consenting to, or
defaulting in answering a bankruptcy petition filed against the Person in any
bankruptcy proceeding; or

 

(e)                                  the entry of an order, judgment or decree by
any court of competent jurisdiction adjudicating the Person bankrupt or
appointing a trustee, custodian, receiver or liquidator of such Person’s
assets, which order, judgment or decree continues unstayed and in effect for
any period of sixty (60) days.

 

(15)                            “Boca Raton Audit Team” has the
meaning referred to in the recitals to this Agreement.

 

(16)                            “Business Day” means any day other
than a Saturday, Sunday or a day on which banks are required to be closed in New
York, New York.

 

3

 

(17)                            “Change of Control” has the meaning
set forth in the Joint Defense Agreement.

 

(18)                            “Claimed Deductions” has the meaning
set forth in Section 6.1(a).

 

(19)                            “Claiming Party” has the meaning set
forth in Section 6.1(a).

 

(20)                            “Code” has the meaning referred to in
the recitals to this Agreement.

 

(21)                            “Common Parent” means (a) for U.S.
federal income tax purposes, the “common parent corporation” of an “affiliated
group” (in each case, within the meaning of Section 1504 of the Code) filing a
U.S. federal consolidated income tax return, or (b) for state, local or
non-U.S. income tax purposes, the common parent (or similar term) (which need
not be a corporation) of a consolidated, unitary, combined or similar group.

 

(22)                            “Correlative Adjustment” means a
disallowance of an item of deduction, loss or credit (or an increase of an item
of income or gain) that is related or attributable to the Assets of a Party or
that Party’s Affiliates, that is included in a Tax Return for a
Pre-Distribution Tax Period or the portion of a Straddle Tax Period ending on
the Distribution Date, and that results in a correlative increase of an item of
deduction, loss or credit (or reduction of an item of income or gain) with
respect to another Party or that Party’s Affiliates with respect to such period
or periods.

 

(23)                            “Correlative Detriment” has the
meaning set forth in Section 4.1(b).

 

(24)                            “Deferred Compensation Deduction”
means an Income Tax deduction arising with respect to (a) the Tyco Deferred
Compensation Liabilities, the Tyco Deferred Stock Units, the Healthcare
Deferred Compensation Liabilities, the Healthcare Deferred Stock Units, the
Electronics Deferred Compensation Liabilities, or the Electronics Deferred
Stock Units; (b) the Tyco Options, the Healthcare Options or the Electronics
Options, including, without limitation, a deduction arising from disqualifying
dispositions relating to prior exercises of stock options issued pursuant to
the Tyco Employee Stock Purchase Plan; or (c) the Tyco Restricted Stock, the
Tyco Restricted Stock Units, the Tyco Performance Share Units, the Healthcare
Restricted Stock, the Healthcare Restricted Stock Units, the Healthcare
Performance Share Units, the Electronics Restricted Stock, the Electronics
Restricted Stock Units, or the Electronics Performance Share Units, as such
terms are defined for purposes of the Separation and Distribution Agreement
(referred to collectively as the “Deferred Compensation Deductions” and each individually
as a “Deferred Compensation Deduction”).

 

(25)                            “Dispute” has the meaning set forth in
Section 13.1.

 

(26)                            “Dispute Notice” has the meaning set
forth in Section 13.1.

 

(27)                            “Distribution” or “Distributions”
means, individually or collectively:

 

(a)                                  the distribution on the Distribution Date to
holders of record of shares of Tyco Common Stock as of the Distribution Date of
the Electronics Common Stock and the Healthcare Common Stock owned by Tyco, and

 

4

 

(b)                                 to the extent not otherwise included in (a),
the distributions described in the IRS Ruling and the Tax Representation
Letters.

 

(28)                            “Distribution Date” means the date on
which the Distributions are effectuated pursuant to the Separation and Distribution
Agreement.

 

(29)                            “Distribution Taxes” mean any and all
Taxes (a) required to be paid by or imposed on a Party or any of its Affiliates
resulting from, or directly arising in connection with, the failure of the
Distributions to qualify under Section 355(a) or (c) of the Code or, if
applicable, Section 361(c) of the Code, or the application of Section 355(d) or
(e) of the Code to the Distributions (or the failure to qualify under or the
application of corresponding provisions of the Laws of other jurisdictions); or
(b) required to be paid by or imposed on a Party or any of its Affiliates
resulting from, or directly arising in connection with, the failure of any
transaction undertaken in connection with or pursuant to the Plan of Separation
to qualify for tax-free treatment, in whole or in part, but, with respect to
both (a) and (b) above, only to the extent that such qualification or tax-free
treatment was claimed by one or more of the Parties on a Tax Return for a
Pre-Distribution Tax Period or a Straddle Tax Period.

 

(30)                            “Due Date” means the date (taking into
account all valid extensions) upon which a Tax Return is required to be filed
with or Taxes are required to be paid to a Taxing Authority, whichever is
applicable.

 

(31)                            “Effective Time” has the meaning set
forth in the Separation and Distribution Agreement.

 

(32)                            “Elected Party” has the meaning set
forth in Section 9.2(d)(iii).

 

(33)                            “Electronics” has the meaning set
forth in the recitals hereto.

 

(34)                            “Electronics Allocable Audit Portion”
means the amount of any Taxes due and payable that are attributable to a
Pre-Distribution Tax Period or the portion of a Straddle Tax Period ending on
the Distribution Date that are not reported on a Tax Return filed for such
periods to the extent such Taxes are attributable to any Electronics-Tyco
Shared Entities or Electronics-Healthcare Shared Entities, as the case may be.
The determination of the amount of additional Taxes due and payable that are
attributable to the Electronics-Tyco Shared Entities or the Electronics-Healthcare
Shared Entities shall be calculated on a “with and without basis,” by
calculating the amount of the excess (if any) of (a) the net amount of Taxes
due and payable pursuant to a Final Determination, over (b) the net amount of
Taxes that would be due and payable after excluding from the Final
Determination any adjustments contained therein that are not attributable to
the Electronics Assets.

 

(35)                            “Electronics Allocable Portion” means,
with respect to a Tax Return filed after the Distribution Date for either a
Pre-Distribution Tax Period or Straddle Tax Period, the amount of Taxes due and
payable for such period attributable to any Electronics-Tyco Shared Entities or
Electronics-Healthcare Shared Entities, as the case may be. The determination
of the amount of Taxes due and payable that are attributable to the
Electronics-Tyco Shared Entities or the Electronics-Healthcare Shared Entities
for a given Tax Return shall be calculated on a “with and without basis,” by
calculating the amount of the excess (if any) of (a) the net amount of Taxes

 

5

 

shown as due and payable on
such Tax Return as filed, over (b) the net amount of Taxes that would be shown
as due and payable on such Tax Return if such Tax Return were recalculated
excluding the Electronics-Tyco Shared Entities or the Electronics-Healthcare
Shared Entities; provided, however, if the sum of the Taxes that
would be shown as due and payable on such Tax Return if such Tax Return were
prepared on a separate basis for each of the Electronics Assets, the Healthcare
Assets, and the Tyco Retained Assets, respectively, are different than the
Taxes actually due and payable on such Tax Return, the Electronics Allocable
Portion shall be equal to the product of (c) such Taxes that are actually due
and payable, and (d) a fraction (i) the numerator of which is the Taxes that
would be shown as due and payable on such Tax Return if such Tax Return were
prepared on a separate basis for the Electronics Assets, and (ii) the
denominator of which is the sum of the Taxes that would be shown as due and
payable on such Tax Return if such Tax Return were prepared on a separate basis
for each of the Electronics Assets, the Healthcare Assets, and the Tyco
Retained Assets, respectively.

 

(36)                            “Electronics Assets” has the meaning
set forth in the Separation and Distribution Agreement.

 

(37)                            “Electronics Business” has the meaning
set forth in the Separation and Distribution Agreement.

 

(38)                            “Electronics Common Stock” has the
meaning set forth in the recitals hereto.

 

(39)                            “Electronics Distribution Date” has
the meaning set forth in the Separation and Distribution Agreement.

 

(40)                            “Electronics Group” has the meaning
set forth in the Separation and Distribution Agreement.

 

(41)                            “Electronics-Healthcare Shared Entities”
mean on or before the Distribution Date, any Electronics Assets that are merged
with and into or otherwise acquired by the Electronics Business from a
Healthcare Tax Group.

 

(42)                            “Electronics Sharing Percentage” means
thirty-one percent (31%).

 

(43)                            “Electronics-Tyco Shared Entities”
mean on or before the Distribution Date, any Electronics Assets that are merged
with and into or otherwise acquired by the Electronics Business from a Tyco Tax
Group.

 

(44)                            “Employing Party” has the meaning set forth in Section
6.1(a).

 

(45)                            “Estimated Tax Return” has the meaning
set forth in Section 2.1(c)(iv).

 

(46)                            “Fault” has the meaning set forth in
Section 5.3.

 

(47)                            “Final Determination” means the final
resolution of liability for any Tax for any taxable period, by or as a result
of:

 

6

 

(a)                                  a final decision, judgment, decree or other
order by any court of competent jurisdiction that can no longer be appealed;

 

(b)                                 a final settlement with the IRS, a closing
agreement or accepted offer in compromise under Sections 7121 or 7122 of the
Code, or a comparable agreement under the Laws of other jurisdictions, which
resolves the liability for the Taxes addressed in such agreement for any taxable
period;

 

(c)                                  any allowance of a refund or credit in
respect of an overpayment of Tax, but only after the expiration of all periods
during which such refund may be recovered by the jurisdiction imposing the Tax;
or

 

(d)                                 any other final disposition, including by
reason of the expiration of the applicable statute of limitations.

 

(48)                            “Group” means the Tyco Group, the
Healthcare Group, or the Electronics Group.

 

(49)                            “Healthcare” has the meaning set forth
in the recitals to this Agreement.

 

(50)                            “Healthcare Allocable Audit Portion”
means the amount of any Taxes due and payable that are attributable to a
Pre-Distribution Tax Period or the portion of a Straddle Tax Period ending on
the Distribution Date that are not reported on a Tax Return filed for such periods
to the extent such Taxes are attributable to any Healthcare-Tyco Shared
Entities or Healthcare-Electronics Shared Entities, as the case may be. The
determination of the amount of additional Taxes due and payable that are
attributable to the Healthcare-Tyco Shared Entities or the
Healthcare-Electronics Shared Entities shall be calculated on a “with and
without basis,” by calculating the amount of the excess (if any) of (a) the net
amount of Taxes due and payable pursuant to a Final Determination, over (b) the
net amount of Taxes that would be due and payable after excluding from the
Final Determination any adjustments contained therein that are not attributable
to the Healthcare Assets.

 

(51)                            “Healthcare Allocable Portion” means,
with respect to a Tax Return filed after the Distribution Date for either a
Pre-Distribution Tax Period or Straddle Tax Period, the amount of Taxes due and
payable for such period attributable to any Healthcare-Tyco Shared Entities or
Healthcare-Electronics Shared Entities, as the case may be. The determination
of the amount of Taxes due and payable that are attributable to the
Healthcare-Tyco Shared Entities or the Healthcare-Electronics Shared Entities
for a given Tax Return shall be calculated on a “with and without basis,” by calculating
the amount of the excess (if any) of (a) the net amount of Taxes shown as due
and payable on such Tax Return as filed, over (b) the net amount of Taxes that
would be shown as due and payable on such Tax Return if such Tax Return was
recalculated excluding the Healthcare-Tyco Shared Entities or the
Healthcare-Electronics Shared Entities; provided, however, if the
sum of the Taxes that would be shown as due and payable on such Tax Return if
such Tax Return were prepared on a separate basis for each of the Electronics
Assets, the Healthcare Assets, and the Tyco Retained Assets, respectively, are
different than the Taxes actually due and payable on such Tax Return, the
Healthcare Allocable Portion shall be equal to the product of (c) such Taxes
that are actually due and payable, and (d) a fraction (i) the numerator of
which is the Taxes that would be shown as due and payable on such Tax Return if

 

7

 

such Tax Return were
prepared on a separate basis for the Healthcare Assets, and (ii) the
denominator of which is the sum of the Taxes that would be shown as due and
payable on such Tax Return if such Tax Return were prepared on a separate basis
for each of the Electronics Assets, the Healthcare Assets, and the Tyco
Retained Assets, respectively.

 

(52)                            “Healthcare Assets” has the meaning
set forth in the Separation and Distribution Agreement.

 

(53)                            “Healthcare Business” has the meaning
set forth in the Separation and Distribution Agreement.

 

(54)                            “Healthcare Common Stock” has the
meaning set forth in the recitals hereto.

 

(55)                            “Healthcare Distribution Date” has the
meaning set forth in the Separation and Distribution Agreement.

 

(56)                            “Healthcare-Electronics Shared Entities”
mean on or before the Distribution Date, any Healthcare Assets that are merged
with and into or otherwise acquired by the Healthcare Business from a
Electronics Tax Group.

 

(57)                            “Healthcare Group” has the meaning set
forth in the Separation and Distribution Agreement.

 

(58)                            “Healthcare Sharing Percentage” means
forty-two percent (42%).

 

(59)                            “Healthcare-Tyco Shared Entities” mean
on or before the Distribution Date, any Healthcare Assets that are merged with
and into or otherwise acquired by the Healthcare Business from a Tyco Tax
Group.

 

(60)                            “Income Taxes” mean:

 

(a)                                  all Taxes based upon, measured by, or
calculated with respect to (i) net income or profits (including, but not
limited to, any capital gains, minimum tax or any Tax on items of tax
preference, but not including sales, use, real, or personal property, gross or
net receipts, value added, excise, leasing, transfer or similar Taxes), or (ii)
multiple bases (including, but not limited to, corporate franchise, doing
business and occupation Taxes) if one or more bases upon which such Tax is
determined is described in clause (a)(i) above;

 

(b)                                 all U.S., state, local or non-U.S. franchise
Taxes;

 

(c)                                  all U.S. state and local Taxes or non-U.S.
Taxes not otherwise included in (a) or (b) above that are listed on Schedule
1.1(60)(c); and

 

(d)                                 including in the case of each of (a), (b),
and (c) above, any related interest and any penalties, additions to such Tax or
additional amounts imposed with respect thereto by any Taxing Authority.

 

(61)                            “Income Tax Returns” mean all Tax
Returns that relate to Income Taxes.

 

8

 

(62)                            “Indemnified Party” means the Party
which is or may be entitled pursuant to this Agreement to receive any payments
(including reimbursement for Taxes or costs and expenses) from another Party or
Parties to this Agreement.

 

(63)                            “Indemnifying Party” means the Party
which is or may be required pursuant to this Agreement to make indemnification
or other payments (including reimbursement for Taxes and costs and expenses) to
another Party to this Agreement.

 

(64)                            “IRS” means the United States Internal
Revenue Service or any successor thereto, including, but not limited to its
agents, representatives, and attorneys.

 

(65)                            “IRS Ruling” means the requests
submitted to the IRS for all private letter rulings to be obtained by Tyco from
the IRS in connection with the Plan of Separation, and any supplemental
materials submitted to the IRS relating thereto, and the IRS private letter
rulings received by Tyco with respect to the Plan of Separation.

 

(66)                            “Joint Defense Agreement” means the
Joint Defense Agreement by and among Tyco, Healthcare, and Electronics, dated
as of   , 2007.

 

(67)                            “Law” means any U.S. or non-U.S.
federal, national, supranational, state, provincial, local or similar statute,
law, ordinance, regulation, rule, code, administrative pronouncement, order,
requirement or rule of law (including common law), or any income tax treaty.

 

(68)                            “LIBOR” means the British Bankers
Association London Interbank Offered Rate, as it is published by Reuters, or
any successor to or substitute for such service providing rate quotations of
the British Bankers Association London Interbank Offered Rate, at approximately
11:00 a.m., London time. In the event that such British Bankers Association
London Interbank Offered Rate is not available at such time for any reason,
then LIBOR shall be the rate at which dollar deposits of $10 million and for a
maturity of one (1) week are offered by the principal London office of Citibank
in the London interbank market at approximately 11:00 a.m., London time.

 

(69)                            “Majority of the Parties” means the
consent of at least two of the Parties.

 

(70)                            “McDermott” means McDermott Will &
Emery LLP.

 

(71)                            “Mediation Period” has the meaning set
forth in Section 13.2.

 

(72)                            “New York Courts” has the meaning set
forth in Section 14.15.

 

(73)                            “Non-Income Tax Returns” mean all Tax
Returns other than Income Tax Returns.

 

(74)                            “Participating Party” has the meaning
set forth in Section 9.2(c)(i).

 

(75)                            “Party” has the meaning set forth in the
preamble hereto.

 

9

 

(76)                            “Person” means any natural person,
firm, individual, corporation, business trust, joint venture, association,
company, limited liability company, partnership, or other organization or
entity, whether incorporated or unincorporated, or any governmental entity.

 

(77)                            “Plan of Separation” has the meaning
set forth in the recitals hereto.

 

(78)                            “Post-Distribution Income Tax Returns”
mean, collectively, all Income Tax Returns required to be filed by a Party or
its Affiliates for a Post-Distribution Tax Period.

 

(79)                            “Post-Distribution Ruling” has the
meaning set forth in Section 5.4.

 

(80)                            “Post-Distribution Tax Period” means a
Tax year beginning and ending after the Distribution Date.

 

(81)                            “Pre-Distribution Income Tax Returns”
mean, collectively, all Income Tax Returns required to be filed by a Party or
its Affiliates for a Pre-Distribution Tax Period.

 

(82)                            “Pre-Distribution Non-Income or Non-U.S.
Tax Audit” means any Audit related to any (a) U.S. federal, state, or local
Taxes other than Income Taxes, or (b) any non-U.S. Taxes, in each case with
respect to a Tax Return filed, or allegedly required to be filed, for any
Pre-Distribution Tax Period or Straddle Tax Period; provided, however,
this term shall not include any Audit that is a Pre-Distribution Transfer
Pricing Tax Audit, a Pre-Distribution TME Payroll Tax Audit, or a
Pre-Distribution Tyco (U.S.) Qualified Plan Tax Audit.

 

(83)                            “Pre-Distribution Tax Period” means a
Tax year beginning and ending on or before the Distribution Date.

 

(84)                            “Pre-Distribution TME Payroll Tax Audit”
means any Audit for a Pre-Distribution Tax Period or Straddle Tax Period of
payroll taxes for TME Management Corp., Citrine Management Corp., or any
predecessor payroll company to TME Management Corp.

 

(85)                            “Pre-Distribution Transfer Pricing Tax
Audit” means any Audit of any Income Taxes related to or arising from (a)
an intercompany transfer pricing adjustment under Section 482 of the Code and
the Treasury Regulations thereunder, or an analogous provision under U.S. state
and local or non-U.S. Law, or (b) a determination that the activities of a
Party or its Affiliates give rise to a “permanent establishment,” presence, or
nexus in any jurisdiction that could subject it to Income Tax there, in each of
(a) and (b), for any Pre-Distribution Tax Period or Straddle Tax Period.

 

(86)                            “Pre-Distribution Tyco (U.S.) Qualified
Plan Tax Audit” means any Audit for a Pre-Distribution Tax Period or
Straddle Tax Period of Tyco (US) Inc. Retirement Savings and Investment Plan I,
Tyco (US) Inc. Retirement Savings and Investment Plan II, Tyco (US) Inc.
Retirement Savings and Investment Plan III, Tyco (US) Inc. Retirement Savings
and Investment Plan IV, Tyco (US) Inc. Retirement Savings and Investment Plan
V, Tyco (US) Inc. Retirement Savings and Investment Plan VI (Puerto Rico),
Kendall/ADT Pension Plan, or Electronics Pension Plan.

 

10

 

(87)                            “Pre-Distribution U.S. Income Tax Audit”
means any Audit of any U.S. federal, state, or local Income Tax Return filed,
or allegedly required to be filed, for any Pre-Distribution Tax Period or
Straddle Tax Period; provided, however, this term shall not
include any Audit that is a Pre-Distribution Transfer Pricing Tax Audit, a
Pre-Distribution Tyco (U.S.) Qualified Plan Tax Audit, or a Pre-Distribution
TME Payroll Tax Audit.

 

(88)                            “Preparing Party” has the meaning set
forth in Section 2.1(a).

 

(89)                            “Previously Paid Estimated Taxes” has
the meaning set forth in Section 3.4.

 

(90)                            “Prime Rate” has the meaning set forth
in the Separation and Distribution Agreement.

 

(91)                            “Proposed Acquisition Transaction”
means a transaction or series of transactions (or any agreement, understanding,
arrangement, or substantial negotiations within the meaning of Section 355(e)
of the Code and the Treasury Regulations promulgated thereunder, to enter into
a transaction or series of related transactions), as a result of which any of
the Parties or any of the Section 355 Entities (or any successor thereto) would
merge or consolidate with any other Person, or as a result of which any Person
or any group of Persons would (directly or indirectly) acquire, or have the
right to acquire (through an option or otherwise), from any of the Parties or
any of their Affiliates (or any successor thereto) and/or one or more holders
of their stock, respectively, any amount of stock of any of the Parties or any
of the Section 355 Entities, as the case may be, that would, when combined with
any other changes in ownership of the stock of such Party or any of the Section
355 Entities, comprise more than thirty-five percent (35%) of (a) the value of
all outstanding stock of such Party or any of the Section 355 Entities as of
the date of such transaction, or in the case of a series of transactions, the
date of the last transaction of such series, or (b) the total combined voting
power of all outstanding stock of such Party or any of the Section 355 Entities
as of the date of such transaction, or in the case of a series of transactions,
the date of the last transaction of such series. For purposes of determining
whether a transaction constitutes an indirect acquisition for purposes of the
first sentence of this definition, any recapitalization or other action
resulting in a shift of voting power or any redemption of shares of stock shall
be treated as an indirect acquisition of shares of stock by the non-exchanging
shareholders. This definition and the application thereof is intended to
monitor compliance with Section 355(e) of the Code and the Treasury Regulations
promulgated thereunder and shall be interpreted accordingly by the Parties in
good faith.

 

(92)                            “Qualified Tax Counsel” means any of
the law firms listed on Schedule 1.1(92).

 

(93)                            “Redo Project” means the proposed
adjustments to the U.S. federal Income Tax Returns prepared by or for Tyco’s,
Electronics’ and Healthcare’s Subsidiaries, respectively, that have been
submitted to the IRS (or will be submitted to the IRS upon commencement of an Audit)
for Tax periods prior to and including the Distribution Date as disclosed in
the footnotes to the Parties’ respective financial statements.

 

(94)                            “Refund” means any refund of Taxes
(including any overpayment of Taxes for a period ending on or prior to the
Distribution Date that can be refunded or, alternatively, applied to future
Taxes payable), including any interest paid on or with respect to such refund
of Taxes;

 

11

 

provided, however, the amount of the refund of
Taxes shall be net of any Taxes imposed by any Taxing Authority on the receipt
of the refund.

 

(95)                            “Replaced Audit Management Party” has
the meaning set forth in Section 9.2(d)(iv).

 

(96)                            “Requesting Party” shall have the
meaning set forth in Section 5.4.

 

(97)                            “Restricted Period” means the period
beginning at the Effective Time and ending on the two-year anniversary of the
day after the later of the Electronics Distribution Date and the Healthcare
Distribution Date.

 

(98)                            “Rules” has the meaning set forth in
Section 13.3.

 

(99)                            “Section 355 Entities” mean the
entities listed on Schedule 1.1(99).

 

(100)                      “Separation and Distribution Agreement”
means the Separation and Distribution Agreement by and among Tyco, Healthcare,
and Electronics, dated as of    , 2007.

 

(101)                      “Shared Entities” mean, each
individually and collectively, all Tyco-Electronics Shared Entities,
Tyco-Healthcare Shared Entities, Electronics-Tyco Shared Entities,
Electronics-Healthcare Shared Entities, Healthcare-Tyco Shared Entities, and
Healthcare-Electronics Shared Entities.

 

(102)                      “Sharing Percentages” means, with
respect to Tyco, the Tyco Sharing Percentage, with respect to Healthcare, the
Healthcare Sharing Percentage, and with respect to Electronics, the Electronics
Sharing Percentage.

 

(103)                      “Spinco Parties” mean, each
individually and collectively, Healthcare and Electronics.

 

(104)                      “Straddle Income Tax Returns” mean,
collectively, all Income Tax Returns required to be filed by a Party and its
Affiliates for a Straddle Tax Period.

 

(105)                      “Straddle Tax Period” means a Tax year
beginning before the Distribution Date and ending after the Distribution Date.

 

(106)                      “Subsidiary” has the meaning set forth
in the Separation and Distribution Agreement.

 

(107)                      “Tax” or “Taxes” whether used
in the form of a noun or adjective, means taxes on or measured by income,
franchise, gross receipts, sales, use, excise, payroll, personal property, real
property, ad-valorem, value-added, leasing, leasing use or other taxes, levies,
imposts, duties, charges, or withholdings of any nature. Whenever the term “Tax”
or “Taxes” is used it shall include penalties, fines, additions to tax and
interest thereon.

 

(108)                      “Tax Attributes” mean for U.S.
federal, state, local, and non-U.S. Income Tax purposes, earnings and profits,
tax basis, net operating and capital loss carryovers or carrybacks,

 

12

 

alternative minimum Tax
credit carryovers or carrybacks, general business credit carryovers or
carrybacks, income tax credits or credits against income tax, disqualified
interest and excess limitation carryovers or carrybacks, overall foreign
losses, research and experimentation credit base periods, and all other items
that are determined or computed on an affiliated group basis (as defined in
Section 1504(a) of the Code determined without regard to the exclusion
contained in Section 1504(b)(3) of the Code), or similar Tax items determined
under applicable Tax law, including the tax attributes listed on Schedule 11.1.

 

(109)                      “Tax Benefit Actually Realized” means
with respect to a Party and its Subsidiaries the actual reduction in Taxes due
and payable determined only with respect to the referenced taxable year or any
prior taxable year, and is equal to the sum of:

 

(a)                                  the excess (if any) of (i) the amount of
Taxes that the Party and its Subsidiaries would have owed in such taxable years
(excluding the effect of any carryforwards of net operating or capital losses
or Tax credits to such year) had there been no payment or event giving rise to
such a determination, over (ii) the amount of Taxes actually paid by the Party
and its Subsidiaries in such taxable years (excluding the effect of any
carryforwards of net operating losses or capital losses or Tax credits to such
year) after taking into account such payment or determination; and

 

(b)                                 the excess (if any) of (i) the amount of the
Refund actually received by the Party and its Subsidiaries with respect to such
taxable years or any carryback year (excluding the effect of any carryforwards
of net operating losses or capital losses or Tax credits to such year) as a
result of the carryback of Tax items to prior taxable years after taking into
account such payment or determination, over (ii) the amount of the Refund that
the Party and its Subsidiaries would have been entitled to receive with respect
to such taxable years or any carryback year (excluding the effect of any
carryforwards of net operating losses or capital losses or Tax credits to such
year) as a result of the carryback of Tax items to prior taxable years had
there been no payment or event giving rise to such a determination.

 

The Tax Benefit Actually
Realized shall be computed based on the actual U.S. or non-U.S. income tax
rates applicable to the Party and its Subsidiaries during the applicable tax
year; provided, however, that if the Tax Benefit Actually
Realized includes a U.S. federal Income Tax benefit attributable to the
deduction of interest included in Taxes, then the Parties shall assume that the
applicable U.S. state and local Income Tax rate is 2 percent (2%) in lieu of
the applicable Party’s and its Subsidiaries’ actual U.S. state and local Income
Tax rate.

 

(110)                      “Tax-Free Status” means the
qualification of a Distribution or any other transaction contemplated by the
IRS Ruling or any Tax Opinion as a transaction in which gain or loss is not
recognized, in whole or in part, and no amount is included in income, including
by reason of Distribution Taxes, for U.S. federal, state, and local income tax
purposes (other than intercompany items, excess loss accounts or other items
required to be taken into account pursuant to Treasury Regulations promulgated
under Section 1502 of the Code).

 

(111)                      “Tax Group” means any U.S. federal,
state, local or non-U.S. affiliated, consolidated, combined, unitary or similar
group that files a Tax Return or Tax Returns.

 

13

 

(112)                      “Taxing Authority” means any
governmental authority or any subdivision, agency, commission, or authority thereof
or any quasi-governmental or private body having jurisdiction over the
assessment, determination, collection, or imposition of any Tax (including the
IRS).

 

(113)                      “Tax Management Change Event” has the
meaning set forth in Section 9.2(d)(i).

 

(114)                      “Tax Opinions” mean certain Tax
opinions and supporting memoranda rendered by McDermott to Tyco or any of its
Affiliates in connection with the Plan of Separation.

 

(115)                      “Tax Package” means:

 

(a)                                  a pro forma Tax Return relating to the
operations of a Spinco Party and/or its Subsidiaries that are required to be
included in any Tax Group of which any of the Shared Entities is or was the
Common Parent and such Spinco Party and/or such Subsidiaries is or was a member
for one or more days in a taxable year; and

 

(b)                                 all information relating to the operations of
a Spinco Party and/or its Subsidiaries that is reasonably necessary to prepare
and file the applicable Tax Return required to be filed by any Tax Group of
which any of the Shared Entities is or was the common parent and such Spinco
Party or any of its Subsidiaries is or was a member for one or more days in a
Tax year.

 

(116)                      “Tax Representation Letter” means any
letter containing certain representations and covenants issued by a Tyco or any
of its Affiliates to McDermott in connection with the Tax Opinions.

 

(117)                      “Tax Returns” mean any return, report,
certificate, form or similar statement or document (including any related or
supporting information or schedule attached thereto and any information return,
amended tax return, claim for refund, or declaration of estimated tax) required
to be supplied to, or filed with, a Taxing Authority in connection with the
determination, assessment or collection of any Tax or the administration of any
Laws, regulations, or administrative requirements relating to any Taxes.

 

(118)                      “Transferee Entities” mean the
entities listed on Schedule 1.1(118).

 

(119)                      “Transferor Entities” mean the
entities listed on Schedule 1.1(119).

 

(120)                      “Treasury Regulations” mean the final
and temporary (but not proposed) income tax and administrative regulations
promulgated under the Code, as such regulations may be amended from time to
time (including corresponding provisions of succeeding regulations).

 

(121)                      “TUSHI” means Tyco (US) Holdings, Inc.

 

(122)                      “Tyco” has the meaning set forth in
the preamble of this Agreement.

 

(123)                      “Tyco Allocable Audit Portion” means
the amount of any Taxes due and payable that are attributable to a
Pre-Distribution Tax Period or the portion of a Straddle Tax Period

 

14

 

ending on the Distribution
Date that are not reported on a Tax Return filed for such periods to the extent
such Taxes are attributable to any Tyco-Electronics Shared Entities or
Tyco-Healthcare Shared Entities, as the case may be. The determination of the
amount of additional Taxes due and payable that are attributable to the
Tyco-Electronics Shared Entities or the Tyco-Healthcare Shared Entities shall
be calculated on a “with and without basis,” by calculating the amount of the
excess (if any) of (a) the net amount of Taxes due and payable pursuant to a
Final Determination, over (b) the net amount of Taxes that would be due and
payable after excluding from the Final Determination any adjustments contained
therein that are not attributable to the Tyco Retained Assets.

 

(124)                      “Tyco Allocable Portion” means, with
respect to a Tax Return filed after the Distribution Date for either a
Pre-Distribution Tax Period or Straddle Tax Period, the amount of Taxes due and
payable for such period attributable to any Tyco-Electronics Shared Entities or
Tyco-Healthcare Shared Entities, as the case may be. The determination of the
amount of Taxes due and payable that are attributable to the Tyco-Electronics
Shared Entities or the Tyco-Healthcare Shared Entities for a given Tax Return
shall be calculated on a “with and without basis,” by calculating the amount of
the excess (if any) of (a) the net amount of Taxes shown as due and payable on
such Tax Return as filed, over (b) the net amount of Taxes that would be shown
as due and payable on such Tax Return if such Tax Return was recalculated
excluding the Tyco-Electronics Shared Entities or the Tyco-Healthcare Shared
Entities; provided, however, if the sum of the Taxes that would
be shown as due and payable on such Tax Return if such Tax Return were prepared
on a separate basis for each of the Electronics Assets, the Healthcare Assets,
and the Tyco Retained Assets, respectively, are different than the Taxes
actually due and payable on such Tax Return, the Tyco Allocable Portion shall
be equal to the product of (c) such Taxes that are actually due and payable,
and (d) a fraction (i) the numerator of which is the Taxes that would be shown
as due and payable on such Tax Return if such Tax Return were prepared on a
separate basis for the Tyco Retained Assets, and (ii) the denominator of which
is the sum of the Taxes that would be shown as due and payable on such Tax
Return if such Tax Return were prepared on a separate basis for each of the
Electronics Assets, the Healthcare Assets, and the Tyco Retained Assets,
respectively.

 

(125)                      “Tyco Common Stock” has the meaning
set forth in the Separation and Distribution Agreement.

 

(126)                      “Tyco-Electronics Shared Entities”
mean on or before the Distribution Date, any Tyco Retained Assets that are
merged with and into or otherwise acquired by the Tyco Retained Business from a
Electronics Tax Group.

 

(127)                      “Tyco Group” has the meaning set forth
in the Separation and Distribution Agreement.

 

(128)                      “Tyco-Healthcare Shared Entities” mean
on or before the Distribution Date, any Tyco Retained Assets that are merged
with and into or otherwise acquired by the Tyco Retained Business from a
Healthcare Tax Group.

 

(129)                      “Tyco Retained Assets” has the meaning
set forth in the Separation and Distribution Agreement.

 

15

 

(130)                      “Tyco Retained Business” has the
meaning set forth in the Separation and Distribution Agreement.

 

(131)                      “Tyco Retained Liabilities” has the
meaning set forth in the Separation and Distribution Agreement.

 

(132)                      “Tyco Sharing Percentage” means
twenty-seven percent (27%).

 

(133)                      “Unqualified Tax Opinion” means an
unqualified “will” opinion of Qualified Tax Counsel, which opinion is
reasonably acceptable to each of the Parties and upon which each of the Parties
may rely to confirm that a transaction (or transactions) will not result in
Distribution Taxes, including confirmation in accordance with Circular 230 or
otherwise that may be provided for purposes of avoiding any applicable
penalties or additions to Tax.

 

(134)                      “U.S.” means the United States.

 

(135)                      “U.S. Audit Management Party” means
the Audit Management Party with respect to a Pre-Distribution U.S. Income Tax
Audit.

 

Section 1.2                                      References; Interpretation.

 

(a)                                  Terms not otherwise defined herein shall have
the meaning ascribed to them in the Separation and Distribution Agreement.
References in this Agreement to any gender include references to all genders,
and references to the singular include references to the plural and vice versa.
Unless the context otherwise requires, the words “include”, “includes”, and “including”
when used in this Agreement shall be deemed to be followed by the phrase “without
limitation”. Unless the context otherwise requires, references in this
Agreement to Articles, Sections, Exhibits and Schedules shall be deemed
references to Articles and Sections of, and Exhibits and Schedules to, this
Agreement. Unless the context otherwise requires, the words “hereof”, “hereby”,
and “herein” and words of similar meaning when used in this Agreement refer to
this Agreement in its entirety and not to any particular Article, Section or
provision of this Agreement.

 

(b)                                 The Parties agree that this Agreement is
intended solely to determine the cash tax obligations of the Parties and does
not address the manner or method of tax accounting for any item.

 

Section 1.3                                      Effective Time.

 

(a)                                  The Parties acknowledge that the Plan of
Separation contemplates a series of interrelated and intermediate internal
transactions undertaken preparatory to and in contemplation of the
Distributions that must be completed prior to the Effective Time in order to
align and properly capitalize the Healthcare Business, the Electronics
Business, and the Tyco Retained Business, including the assignment of TUSHI and
all of its Tax liabilities to the Electronics Business.

 

(b)                                 Notwithstanding that these interrelated and
intermediate internal transactions must be given effect prior to the
Distributions, the agreements contained herein, 

 

16

 

including, but not limited
to, the manner in which Taxes are shared amongst the Parties, shall be
effective no earlier than and only upon the Effective Time.

 

ARTICLE II

 

PREPARATION AND FILING OF TAX RETURNS

 

Section 2.1                                      Responsibility of Parties to Prepare and File
Pre-Distribution Income Tax Returns.

 

(a)                                  General. To the extent not previously filed and subject to the rights and
obligations of each of the Parties set forth herein, Schedule 2.1(a) sets forth
the Parties (each, a “Preparing Party”) that are responsible for preparing or
causing to be prepared all Pre-Distribution Income Tax Returns. Unless
otherwise provided in this Agreement, the Preparing Party is responsible for
the costs and expenses associated with such preparation. The Party responsible,
or whose Affiliate is responsible, for filing a Pre-Distribution Income Tax
Return under applicable Law shall file or cause to be filed such
Pre-Distribution Income Tax Return with the applicable Taxing Authority.
Pre-Distribution Income Tax Returns shall be prepared in a manner (i)
consistent with the past practice of the Parties and their Affiliates unless
otherwise modified by a Final Determination or required by applicable Law; (ii)
consistent with (and the Parties and their Affiliates shall not take any
position inconsistent with) the IRS Ruling, the Tax Representation Letters, and
the Tax Opinions; and (iii) that minimizes the overall amount of Taxes due and
payable on Pre-Distribution Income Tax Returns of all of the Parties by
cooperating in making such elections or applications for group, group relief,
consolidated, combined or other reliefs or allowances available in the taxing
jurisdiction in which the Income Tax Returns are filed and consistent with the
assumptions made in determining all estimated or advance payments of Income Tax
on or prior to the Distribution Date. Payments between a Party or any of its
Affiliates and another Party or any of its Affiliates for reasonable
preparation costs and expenses shall be treated as amounts deductible by the
paying Party and its Affiliates pursuant to Section 162 of the Code, and none
of the Parties or any of their Affiliates shall take any position inconsistent
with such treatment, except to the extent a Final Determination with respect to
the paying entity causes such payment to not be so treated (in which case the
payment shall be treated in accordance with such Final Determination).

 

(b)                                 Tax Package. To the extent not previously provided, each Party other than the
Preparing Party shall (at its own cost and expense), to the extent that a
Pre-Distribution Income Tax Return includes items of that Party or its
Affiliates, prepare and provide or cause to be prepared and provided to the
Preparing Party (and make available or cause to be made available to the other
Party) a Tax Package relating to that Pre-Distribution Income Tax Return. Such
Tax Package shall be provided in a timely manner consistent with the past
practices of the Parties and their Affiliates. In the event a Party does not
fulfill its obligations pursuant to this Section 2.1(b), the Preparing Party
shall be entitled, at the sole cost and expense of the first Party, to prepare
or cause to be prepared the information required to be included in the Tax
Package for purposes of preparing any such Pre-Distribution Income Tax Return.

 

17

 

(c)                                  Procedures Relating to the Preparation and
Filing of Pre-Distribution Income Tax Returns.

 

(i)                                     In the case of Pre-Distribution Income Tax Returns,
to the extent not previously filed, no later than thirty (30) days prior to the
Due Date of each such Tax Return (reduced to ten (10) days for state or local
Pre-Distribution Income Tax Returns), the Preparing Party shall make available
or cause to be made available drafts of such Tax Return (together with all
related work papers) to each of the other Parties. The other Parties shall have
access to any and all data and information necessary for the preparation of all
such Pre-Distribution Income Tax Returns and the Parties shall cooperate fully
in the preparation and review of such Tax Returns. Subject to the preceding
sentence, no later than fifteen (15) days after receipt of such
Pre-Distribution Income Tax Returns (reduced to five (5) days for state or
local Pre-Distribution Income Tax Returns), each Party shall have a right to
object to such Pre-Distribution Income Tax Return (or items with respect
thereto) by written notice to the other Parties; such written notice shall
contain such disputed item (or items) and the basis for its objection.

 

(ii)                                  With respect to a Pre-Distribution Income Tax
Return submitted by the Preparing Party to the other Parties pursuant to
Section 2.1(c)(i), if the other Parties do not object by proper written notice
within the time period described, such Pre-Distribution Income Tax Return shall
be deemed to have been accepted and agreed upon, and to be final and
conclusive, for purposes of this Section 2.1(c)(ii). If a Party does object by
proper written notice within such applicable time period, the Parties shall act
in good faith to resolve any such dispute as promptly as practicable; provided,
however, that, notwithstanding anything to the contrary contained
herein, if the Parties have not reached a final resolution with respect to all
disputed items for which proper written notice was given within ten (10) days
(reduced to two (2) days for state or local Pre-Distribution Income Tax
Returns) prior to the Due Date for such Pre-Distribution Income Tax Return,
such Tax Return shall be filed as prepared pursuant to this Section 2.1
(revised to reflect all initially disputed items that the Parties have agreed
upon prior to such date).

 

(iii)                               In the event that a Pre-Distribution Income
Tax Return is filed that includes any disputed item for which proper notice was
given pursuant to this Section 2.1(c) that was not finally resolved and agreed
upon, such disputed item (or items) shall be resolved in accordance with
Article XIII. In the event that the resolution of such disputed item (or items)
in accordance with Article XIII with respect to a Pre-Distribution Income Tax
Return is inconsistent with such Pre-Distribution Income Tax Return as filed,
the Preparing Party (with cooperation from the other Parties) shall, as
promptly as practicable, amend such Tax Return to properly reflect the final
resolution of the disputed item (or items). In the event that the amount of
Taxes shown to be due and owing on a Pre-Distribution Income Tax Return is
adjusted as a result of a resolution pursuant to Article XIII, proper
adjustment shall be made to the amounts previously paid or required to be paid
in accordance with Article III in a manner that reflects such resolution.

 

(iv)                              Notwithstanding anything to the contrary in
this Section 2.1, in the case of any Income Tax Return for estimated Taxes (“Estimated
Tax Returns”) for a Pre-Distribution Tax Period, to the extent not previously
filed, as soon as practicable prior to the Due Date of each such Estimated Tax
Return, the Preparing Party shall make available or cause to be made available
drafts of such Estimated Tax Return (together with all related work papers) to
each of the other Parties. The other Parties shall have access to any and all
data and information necessary for the preparation of such Estimated Tax
Returns and the Parties shall cooperate fully

 

18

 

in the preparation and
review of such Estimated Tax Returns. Subject to the preceding sentence, a
Party shall have a right to object by written notice to the other Parties (and
such written notice shall contain such disputed item (or items) and the basis
for the objection) and the principles of Section 2.1(c)(ii) and Section
2.1(c)(iii) shall apply to such Estimated Tax Return.

 

Section 2.2                                      Responsibility of Parties to Prepare and File
Straddle Income Tax Returns.

 

(a)                                  General. Subject to the rights and obligations of each of the Parties set
forth herein, Schedule 2.2(a) sets forth the Preparing Party for all Straddle
Income Tax Returns. Unless otherwise provided in this Agreement, the Preparing
Party is responsible for the costs and expenses associated with such
preparation. The Party responsible, or whose Affiliate is responsible, for
filing a Straddle Income Tax Return under applicable Law shall file or cause to
be filed such Straddle Income Tax Return with the applicable Taxing Authority.
All Straddle Income Tax Returns shall be prepared in a manner (i) consistent
with the past practice of the Parties and their Affiliates unless otherwise
modified by a Final Determination or required by applicable Law; (ii)
consistent with (and the Parties and their Affiliates shall not take any
position inconsistent with) the IRS Ruling, the Tax Representation Letters, and
the Tax Opinions; and (iii) that minimizes the overall amount of Taxes due and
payable on Pre-Distribution Income Tax Returns of all of the Parties by
cooperating in making such elections or applications for group, group relief,
consolidated, combined or other reliefs or allowances available in the taxing
jurisdiction in which the Income Tax Returns are filed and consistent with the
assumptions made in determining all estimated or advance payments of Income Tax
on or prior to the Distribution Date. Payments between a Party or any of its
Affiliates and another Party or any of its Affiliates for reasonable
preparation costs and expenses shall be treated as amounts deductible by the
paying Party and its Affiliates pursuant to Section 162 of the Code, and none
of the Parties or any of their Affiliates shall take any position inconsistent
with such treatment, except to the extent a Final Determination with respect to
the paying entity causes such payment to not be so treated (in which case the
payment shall be treated in accordance with such Final Determination).

 

(b)                                 Tax Package. Each Party other than the Preparing Party shall (at its own cost and
expense), to the extent that a Straddle Income Tax Return includes items of
that Party or its Affiliates, prepare and provide or cause to be prepared and
provided to the Preparing Party (and make available or cause to be made
available to the other Party) a Tax Package relating to that Straddle Income
Tax Return. Such Tax Package shall be provided in a timely manner consistent
with the past practices of the Parties and their Affiliates. In the event a
Party does not fulfill its obligations pursuant to this Section 2.2(b), the
Preparing Party shall be entitled, at the sole cost and expense of the first
Party, to prepare or cause to be prepared the information required to be
included in the Tax Package for purposes of preparing any such Straddle Income
Tax Return.

 

(c)                                  Procedures Relating to the Preparation and
Filing of Straddle Income Tax Returns.

 

(i)                                     In the case of Straddle Income Tax Returns,
no later than thirty (30) days prior to the Due Date of each such Tax Return
(reduced to ten (10) days for state or local Straddle Income Tax Returns), the
Preparing Party shall make available or cause to be

 

19

 

made available drafts of
such Tax Return (together with all related work papers) to each of the other
Parties. The other Parties shall have access to any and all data and
information necessary for the preparation of all such Straddle Income Tax
Returns and the Parties shall cooperate fully in the preparation and review of
such Tax Returns. Subject to the preceding sentence, no later than fifteen (15)
days after receipt of such Straddle Income Tax Returns (reduced to five (5)
days for state or local Straddle Income Tax Returns), each Party shall have a
right to object to such Straddle Income Tax Return (or items with respect
thereto) by written notice to the other Parties; such written notice shall
contain such disputed item (or items) and the basis for its objection.

 

(ii)                                  With respect to a Straddle Income Tax Return
submitted by the Preparing Party to the other Parties pursuant to Section
2.2(c)(i), if the other Parties do not object by proper written notice within
the time period described, such Straddle Income Tax Return shall be deemed to
have been accepted and agreed upon, and to be final and conclusive, for
purposes of this Section 2.2(c)(ii). If a Party does object by proper written
notice within such applicable time period, the Parties shall act in good faith
to resolve any such dispute as promptly as practicable; provided, however,
that, notwithstanding anything to the contrary contained herein, if the Parties
have not reached a final resolution with respect to all disputed items for
which proper written notice was given within ten (10) days (reduced to two (2)
days for state or local Straddle Income Tax Returns) prior to the Due Date for
such Straddle Income Tax Return, such Tax Return shall be filed as prepared
pursuant to this Section 2.1 (revised to reflect all initially disputed items
that the Parties have agreed upon prior to such date).

 

(iii)                               In the event that a Straddle Income Tax
Return is filed that includes any disputed item for which proper notice was
given pursuant to this Section 2.2(c) that was not finally resolved and agreed
upon, such disputed item (or items) shall be resolved in accordance with
Article XIII. In the event that the resolution of such disputed item (or items)
in accordance with Article XIII with respect to a Straddle Income Tax Return is
inconsistent with such Straddle Income Tax Return as filed, the Preparing Party
(with cooperation from the other Parties) shall, as promptly as practicable,
amend such Tax Return to properly reflect the final resolution of the disputed
item (or items). In the event that the amount of Taxes shown to be due and
owing on a Straddle Income Tax Return is adjusted as a result of a resolution
pursuant to Article XIII, proper adjustment shall be made to the amounts
previously paid or required to be paid by the Parties in accordance with
Article III in a manner that reflects such resolution.

 

(iv)                              Notwithstanding anything to the contrary in
this Section 2.2, in the case of any Estimated Tax Returns for a Straddle Tax
Period, to the extent not previously filed, as soon as practicable prior to the
Due Date of each such Estimated Tax Return, the Preparing Party shall make
available or cause to be made available drafts of such Estimated Tax Return
(together with all related work papers) to each of the other Parties. The other
Parties shall have access to any and all data and information necessary for the
preparation of such Estimated Tax Returns and the Parties shall cooperate fully
in the preparation and review of such Estimated Tax Returns. Subject to the
preceding sentence, a Party shall have a right to object by written notice to
the other Parties (and such written notice shall contain such disputed item (or
items) and the basis for the objection) and the principles of Section
2.2(c)(ii) and Section 2.2(c)(iii) shall apply to such Estimated Tax Return.

 

20

 

Section 2.3                                      Responsibility of Parties to Prepare and File
Post-Distribution Income Tax Returns and Non-Income Tax Returns. The Party or its Affiliate responsible under
applicable Law for filing a Post-Distribution Income Tax Return or a Non-Income
Tax Return shall prepare and file or cause to be prepared and filed that Tax
Return (at that Party’s own cost and expense).

 

Section 2.4                                      Time of Filing Tax Returns; Manner of Tax
Return Preparation. Each Tax
Return shall be filed on or prior to the Due Date for such Tax Return by the
Party responsible for filing such Tax Return hereunder. Unless otherwise
required by a Taxing Authority pursuant to a Final Determination, the Parties
hereto shall prepare and file or cause to be prepared and filed all Tax Returns
and take all other actions in a manner consistent with (and shall not take any
position inconsistent with) any assumptions, representations, warranties,
covenants, and conclusions provided by the Parties in connection with the Plan
of Separation.

 

ARTICLE III

 

RESPONSIBILITY FOR PAYMENT OF TAXES

 

Section 3.1                                      Responsibility of Tyco for Taxes. Except as otherwise provided in this
Agreement, Tyco shall be liable for and shall pay or cause to be paid the
following Taxes:

 

(a)                                  to the applicable Taxing Authority, any Taxes
due and payable on all Pre-Distribution Income Tax Returns that Tyco is
required to file or cause to be filed with such Taxing Authority pursuant to
Section 2.1;

 

(b)                                 to the applicable Taxing Authority, any Taxes
due and payable on all Straddle Income Tax Returns that Tyco is required to
file or cause to be filed with such Taxing Authority pursuant to Section 2.2;

 

(c)                                  to the applicable Taxing Authority, any Taxes
due and payable on all Post-Distribution Income Tax Returns and Non-Income Tax
Returns that Tyco is required to file or cause to be filed with such Taxing
Authority pursuant to Section 2.3;

 

(d)                                 to Electronics, the Tyco Allocable Portion
computed with respect to the Tyco-Electronics Shared Entities; and

 

(e)                                  to Healthcare, the Tyco Allocable Portion
computed with respect to the Tyco-Healthcare Shared Entities.

 

Section 3.2                                      Responsibility of Electronics for Taxes. Except as otherwise provided in this Agreement,
Electronics shall be liable for and shall pay or cause to be paid the following
Taxes:

 

(a)                                  to the applicable Taxing Authority, any Taxes
due and payable on all Pre-Distribution Income Tax Returns that Electronics is
required to file or cause to be filed with such Taxing Authority pursuant to
Section 2.1;

 

21

 

(b)                                 to the applicable Taxing Authority, any Taxes
due and payable on all Straddle Income Tax Returns that Electronics is required
to file or cause to be filed with such Taxing Authority pursuant to Section
2.2;

 

(c)                                  to the applicable Taxing Authority, any Taxes
due and payable on all Post-Distribution Income Tax Returns and Non-Income Tax
Returns that Electronics is required to file or cause to be filed with such
Taxing Authority pursuant to Section 2.3;

 

(d)                                 to Healthcare, the Electronics Allocable
Portion computed with respect to the Electronics-Healthcare Shared Entities;
and

 

(e)                                  to Tyco, the Electronics Allocable Portion
computed with respect to the Electronics-Tyco Shared Entities.

 

Section 3.3                                      Responsibility of Healthcare for Taxes. Except as otherwise provided in this
agreement, Healthcare shall be liable for and shall pay or cause to be paid the
following Taxes:

 

(a)                                  to the applicable Taxing Authority, any Taxes
due and payable on all Pre-Distribution Income Tax Returns that Healthcare is
required to file or cause to be filed with such Taxing Authority pursuant to
Section 2.1;

 

(b)                                 to the applicable Taxing Authority, any Taxes
due and payable on all Straddle Income Tax Returns that Healthcare is required
to file or cause to be filed with such Taxing Authority pursuant to Section
2.2;

 

(c)                                  to the applicable Taxing Authority, any Taxes
due and payable on all Post-Distribution Income Tax Returns and Non-Income Tax
Returns that Healthcare is required to file or cause to be filed with such
Taxing Authority pursuant to Section 2.3;

 

(d)                                 to Electronics, the Healthcare Allocable
Portion computed with respect to the Healthcare-Electronics Shared Entities;
and

 

(e)                                  to Tyco, the Healthcare Allocable Portion
computed with respect to the Healthcare-Tyco Shared Entities.

 

Section 3.4                                      Timing of Payments of Taxes. All Taxes required to be paid or caused to
be paid by a Party to a Taxing Authority pursuant to this Article III shall be
paid or caused to be paid by such Party on or prior to the Due Date of such
Taxes. All amounts required to be paid by one Party to another Party (including
obligations arising under Article VII) pursuant to this Article III shall be
paid or caused to be paid by such first Party to such other Party in accordance
with Article VIII.

 

22

 

ARTICLE IV

 

REFUNDS, CARRYBACKS AND AMENDED TAX RETURNS

 

Section 4.1                                      Refunds.

 

(a)                                  Each Party shall be entitled to Refunds that
relate to Taxes for which it is liable to an applicable Taxing Authority; provided,
however, any Refunds of Taxes reported on an Income Tax Return that is
the subject of a Pre-Distribution U.S. Income Tax Audit or a Pre-Distribution
Transfer Pricing Tax Audit, shall be shared by the Parties in accordance with
their respective Sharing Percentages.

 

(b)                                 Notwithstanding Section 4.1(a), to the extent
a claim for a Refund is reasonably likely to result in a Correlative Detriment
to one or more of the Parties, any such Refund that is received by one or more
of the Parties shall, and only to the extent thereof, be paid proportionately
to the Parties that are reasonably likely to realize such detriment. A “Correlative
Detriment” is an increase in a current year Tax payment obligation by a Party
or a reduction in a current year Tax benefit of a Party not otherwise entitled
to a Refund under the prior sentence that occurs as a direct result of the Tax
position that is the basis for the Refund or the claim therefor.

 

(c)                                  Any Refund or portion thereof to which a
Party is entitled pursuant to this Section 4.1 that is received or deemed to
have been received as described herein by another Party, shall be paid by such
other Party to such first Party in immediately available funds in accordance
with Article VIII. To the extent a Party applies or causes to be applied an
overpayment of Taxes as a credit toward or a reduction in Taxes otherwise
payable (or a Taxing Authority requires such application in lieu of a Refund)
and such Refund, if received, would have been payable by such Party to another
Party (or Parties) pursuant to this Section 4.1, such Party shall be deemed to
have actually received a Refund to the extent thereof on the date on which the overpayment
is applied to reduce Taxes otherwise payable.

 

Section 4.2                                      Carrybacks. Each of the Parties shall be permitted (but not required) to
carryback (or to cause its Affiliates to carryback) a Tax Attribute realized in
a Post-Distribution Tax Period or a Straddle Tax Period to a Pre-Distribution
Tax Period or a Straddle Tax Period only if such carryback cannot result in one
or more other Parties (or their Affiliates) being liable for additional Taxes.
If a carryback could result in one or more Parties (or their Affiliates) being
liable for additional Taxes, such carryback shall be permitted only if all of
such Parties consent to such carryback. Any Party that has claimed (or caused
one or more of its Affiliates to claim) a Tax Attribute carryback shall be
liable for any Taxes that arise as a result of the subsequent adjustment, if
any, to the carryback claim unless the carryback results in a Refund that is
shared pursuant to Section 4.1(a) or results in a Correlative Detriment
pursuant to Section 4.1(b).

 

Section 4.3                                      Amended Tax Returns.

 

(a)                                  Notwithstanding Sections 2.1 and 2.2, a Party
or its Subsidiary that is entitled to file an amended Tax Return for a
Pre-Distribution Tax Period or a Straddle Tax Period for members of its Tax
Group shall be permitted to prepare and file an amended Tax Return at its own
cost and expense; provided, however, that (i) such amended Tax
Return shall be prepared in a manner (x) consistent with the past practice of
the Parties and their Affiliates unless otherwise modified by a Final
Determination or required by applicable Law; and (y) consistent with (and the
Parties and their Affiliates shall not take any position inconsistent with) the
IRS Ruling, the Tax Representation Letters, and the Tax Opinions; and (ii) if
such amended Tax Return could result in one or more other Parties becoming
responsible for a payment of Taxes pursuant to 

 

23

 

Article III or a payment to
a Party pursuant to Article IX, such amended Tax Return shall be permitted only
if the consent of such other Parties is obtained. The consent of such other
Parties shall not be withheld unreasonably and shall be deemed to be obtained
in the event that a Party or its Subsidiary is required to file an amended Tax
Return as a result of an Audit adjustment that arose in accordance with Article
IX.

 

(b)                                 A Party or its Subsidiary that is entitled to
file an amended Tax Return for a Post-Distribution Tax Period shall be
permitted to do so without the consent of any Party.

 

(c)                                  A Party that is permitted (or whose
Subsidiary is permitted) to file an amended Tax Return shall not be relieved of
any liability for payments pursuant to this Agreement notwithstanding that
another Party consented thereto.

 

Section 4.4                                      Agreement from Party Administering and
Controlling Audit.
Notwithstanding anything to the contrary in this Article, any carryback or
amended Tax Return otherwise permitted pursuant to Sections 4.2 and 4.3,
respectively, shall only be made with the consent of the Party that would be
responsible under Article IX for administering and controlling any Audit that
arises with respect to the Tax Return to which the carryback or the amended Tax
Return relates, if different than the Party that wants (or whose Subsidiary
wants) to exercise its rights under Section 4.2 or Section 4.3.

 

ARTICLE V

 

DISTRIBUTION TAXES

 

Section 5.1                                      Liability for Distribution Taxes. In the event that Distribution Taxes become
due and payable to a Taxing Authority pursuant to a Final Determination, then,
notwithstanding anything to the contrary in this Agreement:

 

(a)                                  No Fault. If such Distribution Taxes are not
attributable to the Fault of
any Party or any of its Affiliates, the responsibility for such Distribution
Taxes shall, if (i) certain and known to the Parties at the time of the
Distributions, reside with the Party or Parties responsible for the payment of
such Taxes under Article III, but only to the extent certain and known; and
(ii) not described in (i) above, be shared by the Parties in accordance with
their Sharing Percentages.

 

(b)                                 Fault. If such Distribution Taxes are attributable to the Fault of one or
more Parties or any of their Affiliates, the responsibility for such
Distribution Taxes shall reside with the Party or Parties at Fault. If more
than one Party is at Fault, the responsibility for the Distribution Taxes shall
be allocated equally among all of the Parties at Fault.

 

Section 5.2                                      Payment for Use of Tax Attributes by Parties
at Fault. Notwithstanding
Section 5.1, if a Party is at Fault within the meaning of Section 5.3, and such
Fault would have resulted in Distribution Taxes becoming due and payable but
for the use of the Tax Attributes of one or more other Parties, the Party at
Fault shall pay to each such other Party the amount of Distribution Taxes that
did not become due and payable as a result of the use of that other Party’s Tax
Attributes. Such payment shall be made by the Party using the Tax Attribute to
the other Party in accordance with Article VIII. For purposes of computing the
amount of the payment

 

24

 

under this Section 5.2, the
Parties shall assume that the other Party is subject to an effective tax rate
of thirty-eight percent (38%).

 

Section 5.3                                      Definition of Fault. For purposes of this Agreement,
Distribution Taxes shall be deemed to result from the fault (“Fault”) of a
Party if such Distribution Taxes are directly attributable to, or result from:

 

(a)                                  any act, or failure or omission to act, by
such Party or any of such Party’s Affiliates following the Distributions that
results in one or more Parties (or any of their Affiliates) being responsible
for such Distribution Taxes pursuant to a Final Determination, regardless of
whether such act or failure to act (i) is covered by a Post-Distribution
Ruling, Unqualified Tax Opinion, or waiver in accordance with Section 5.4, or
(ii) occurs during or after the Restricted Period, or

 

(b)                                 the direct or indirect acquisition of all or
a portion of the stock of such Party or of any of the Section 355 Entities (or
any transaction or series of related transactions that is deemed to be such an
acquisition for purposes of Section 355(e) of the Code and the Treasury
Regulations promulgated thereunder) by any means whatsoever by any person including
pursuant to an issuance of stock by such Party or any of its Affiliates.

 

Section 5.4                                      Limits on Proposed Acquisition Transactions
and Other Transactions During Restricted Period. During the Restricted Period, no Party
shall:

 

(a)                                  enter into any Proposed Acquisition
Transaction, approve any Proposed Acquisition Transaction for any purpose, or
allow any Proposed Acquisition Transaction to occur with respect to any of the
Section 355 Entities;

 

(b)                                 merge or consolidate with any other Person or
liquidate or partially liquidate; or approve or allow any merger,
consolidation, liquidation, or partial liquidation of any of the Section 355
Entities or the ATOB Entities;

 

(c)                                  approve or allow the discontinuance,
cessation, or sale or other transfer (to an Affiliate or otherwise) of, or a
material change in, any Active Business;

 

(d)                                 approve or allow the sale, issuance, or other
disposition (to an Affiliate or otherwise), directly or indirectly, of any
share of, or other equity interest or an instrument convertible into an equity
interest in, any of the ATOB Entities;

 

(e)                                  sell or otherwise dispose of more than 35
percent (35%) of its consolidated gross or net assets, or approve or allow the
sale or other disposition (to an Affiliate or otherwise) of more than 35 percent
(35%) of the consolidated gross or net assets of any of the Section 355
Entities (in each case, excluding sales in the ordinary course of business and
measured based on fair market values as of the date of the applicable
Distribution or other transaction);

 

(f)                                    amend its certificate of incorporation (or
other organizational documents), or take any other action or approve or allow
the taking of any action, whether through a stockholder vote or otherwise,
affecting the voting rights of the stock of such Party, any of the Section 355
Entities, or any of the Transferee Entities;

 

25

 

(g)                                 issue shares of a new class of nonvoting
stock or approve or allow any of the Section 355 Entities or the Transferee
Entities  to issue shares of a new
class of nonvoting stock;

 

(h)                                 purchase, directly or through any Affiliate,
any of its outstanding stock after the Distributions, other than through stock
purchases meeting the requirements of Section 4.05(1)(b) of Revenue Procedure
96-30;

 

(i)                                     approve or allow payment of an extraordinary
distribution by any of the Transferee Entities to any of the Transferor
Entities, or a redemption of shares of any of the Transferee Entities held by
any of the Transferor Entities (in the case of any of the Transferee Entities
or the Transferor Entities, including any successor thereto);

 

(j)                                     approve or allow an extraordinary
contribution to any of the Section 355 Entities (or any successor thereto) by
its shareholder or shareholders (or any successor(s) thereto);

 

(k)                                  take any action or fail to take any action,
or permit any of its Affiliates to take any action or fail to take any action,
that is inconsistent with the representations and covenants made in the IRS
Ruling or in the Tax Representation Letters, or that is inconsistent with any
rulings or opinions in the IRS Ruling or any Tax Opinion; or

 

(l)                                     take any action or permit any of its
Affiliates to take any action that, in the aggregate (taking into account other
transactions described in this Section 5.4) would be reasonably likely to
jeopardize Tax-Free Status;

 

provided, however, that a Party (the “Requesting
Party”) shall be permitted to take such action or one or more actions set forth
in the foregoing clauses (a) through (l) if, prior to taking any such
actions:  (1) such Requesting Party or
Tyco shall have received a favorable private letter ruling from the IRS, or a
ruling from another Taxing Authority (a “Post-Distribution Ruling”), in form
and substance reasonably satisfactory to the other Parties that confirms that
such action or actions will not result in Distribution Taxes, taking into
account such actions and any other relevant transactions in the aggregate; (2)
such Requesting Party shall have received an Unqualified Tax Opinion in form
and substance reasonably satisfactory to the other Parties that confirms that
such action or actions will not result in Distribution Taxes, taking into
account such actions and any other relevant transactions in the aggregate; or
(3) such Requesting Party shall have received a written statement from each of
the other Parties that provides that such other Party waives the requirement to
obtain a Post-Distribution Ruling or Unqualified Tax Opinion described in this
paragraph. The evaluation of a Post-Distribution Ruling or Unqualified Tax
Opinion may consider, among other factors, the appropriateness of any
underlying assumptions, representations, and covenants made in connection with
such Post-Distribution Ruling or Unqualified Tax Opinion. The Requesting Party
shall bear all costs and expenses of securing any such Post-Distribution Ruling
or Unqualified Tax Opinion and shall reimburse the other Parties for all
reasonable out-of-pocket costs and expenses that such Parties may incur in good
faith in seeking to obtain or evaluate any such Post-Distribution Ruling or
Unqualified Tax Opinion.

 

26

 

Section 5.5                                      Advance Disclosure of Non-Public Transactions. In the event of a transaction contemplated
by a Party that is described in Section 5.4(a) or Section 5.4(b) and that has
not been disclosed to the general public, such Party shall make an advance
disclosure of such transaction to the Chief Financial Officers of the other
Parties as soon as practicable and prior to a favorable recommendation of such
transaction to the Board of Directors of such Party. The other Parties shall
take all reasonable measures to protect against the public disclosure of such
transaction. Nothing in this Section 5.5 shall be construed to limit a Party’s
rights or obligations set forth in Section 5.4.

 

Section 5.6                                      Qualified Tax Counsel Advance Conflict Waiver. Unless prohibited by Law or the ethical
rules applicable to attorneys, each of the Parties agrees to waive or to cause
its Affiliates to waive in advance any conflicts that must be waived
(determined by Qualified Tax Counsel in its sole discretion) to permit
Qualified Tax Counsel to issue any Unqualified Tax Opinions to be obtained by a
Party pursuant to this Article V.

 

Section 5.7                                      IRS Ruling, Tax Representation Letters, and
Tax Opinions; Consistency.
Each Party represents that the information and representations furnished by it
in or with respect to the IRS Ruling, the Tax Representation Letters, or the
Tax Opinions are accurate and complete as of the Effective Time. Each Party
covenants (1) to use its best efforts, and to cause its Affiliates to use their
best efforts, to verify that such information and representations are accurate
and complete as of the Effective Time; and (2) if, after the Effective Time, it
or any of its Affiliates obtains information indicating, or otherwise becomes
aware, that any such information or representations is or may be inaccurate or
incomplete, to promptly inform the other Parties. The Parties shall not take
any action or fail to take any action, or permit any of their Affiliates to
take any action or fail to take any action, that is or is reasonably likely to
be inconsistent with the IRS Ruling, the Tax Representation Letters, or the Tax
Opinions.

 

Section 5.8                                      Timing of Payment of Taxes. All Distribution Taxes required to be paid
or caused to be paid by a Party to a Taxing Authority under applicable Law
shall be paid or caused to be paid by such Party on or prior to the Due Date of
such Distribution Taxes. All amounts required to be paid by one Party to
another Party (including obligations arising under Article VII) pursuant to
this Article V shall be paid or caused to be paid by such first Party to such
other Party in accordance with Article VIII.

 

ARTICLE VI

 

EMPLOYEE BENEFIT MATTERS

 

Section 6.1                                      Deferred Compensation Deductions.

 

(a)                                  Entitlement to Deductions. Any Deferred Compensation Deduction arising
after the Distribution Date shall be claimed solely by the Party (or the
appropriate Affiliate of that Party) that employs the individual with respect
to whom such Deferred Compensation Deduction arises at the time that it arises
or, if such individual is not then employed by any Party or a Party’s
Affiliate, by the Party (or the appropriate Affiliate of that Party) that last
employed such individual. If, as a result of a Final Determination, a Deferred
Compensation Deduction is disallowed in whole or in part to the Party (the “Employing
Party”) 

 

27

 

or its Affiliate claiming
such Deferred Compensation Deduction pursuant to the preceding sentence, then
any other Party (“Claiming Party”) or its Affiliates shall at the request of
the Employing Party make a claim for all such deductions (“Claimed Deductions”);
provided, however, that the Employing Party has delivered to the
Claiming Party (i) an opinion of counsel in a form satisfactory to the Claiming
Party that confirms that the Claimed Deductions should be sustained based on
the Final Determination, and (ii) an acknowledgement that the Employing Party
will reimburse the Claiming Party for all reasonable expenses incurred by the
Claiming Party or any of its Affiliates as a result of claiming the Claimed
Deductions. Upon a subsequent Final Determination in favor of the Claiming
Party or one or more of its Affiliates for the Claimed Deductions, the Claiming
Party shall pay to the Employing Party any Tax Benefit Actually Realized by the
Claiming Party or its Affiliates in the taxable year that the Claiming Party or
one or more of its Affiliates asserts its claim to the Claimed Deductions.

 

(b)                                 Withholding and Reporting. The Employing Party that claims (or any
Affiliate of which claims) the Deferred Compensation Deduction described in
Section 6.1(a) shall be responsible for all applicable Taxes (including, but
not limited to, withholding and excise taxes) and shall satisfy, or shall cause
to be satisfied, all applicable Tax reporting obligations in respect to the
deferred compensation that gives rise to the Deferred Compensation Deduction.
The Parties to this Agreement shall cooperate (and shall cause their Affiliates
to cooperate) so as to permit the Employing Party or its Affiliates claiming
such Deferred Compensation Deduction to discharge any applicable Tax withholding
and Tax reporting obligations, including the appointment of the Employing Party
or one or more of its Affiliates as the withholding and reporting agent if the
Employing Party or one or more of its Affiliates is not otherwise required or
permitted to withhold and report under applicable Law.

 

ARTICLE VII

 

INDEMNIFICATION

 

Section 7.1                                      Indemnification Obligations of Tyco. Tyco shall indemnify Healthcare and
Electronics and hold them harmless from and against (without duplication):

 

(a)                                  all Taxes and other amounts for which the
Tyco Group is responsible under this Agreement; and

 

(b)                                 all Taxes and reasonable out-of-pocket costs
for advisors and other expenses attributable to a breach of any representation,
covenant, or obligation of Tyco under this Agreement.

 

Section 7.2                                      Indemnification Obligations of Healthcare. Healthcare shall indemnify Tyco and
Electronics and hold them harmless from and against (without duplication):

 

(a)                                  all Taxes and other amounts for which the
Healthcare Group is responsible under this Agreement; and

 

(b)                                 all Taxes and reasonable out-of-pocket costs
for advisors and other expenses attributable to a breach of any representation,
covenant, or obligation of Healthcare under this Agreement.

 

28

 

Section 7.3                                      Indemnification Obligations of Electronics. Electronics shall indemnify Tyco and
Healthcare and hold them harmless from and against (without duplication):

 

(a)                                  all Taxes and other amounts for which the
Electronics Group is responsible under this Agreement; and

 

(b)                                 all Taxes and reasonable out-of-pocket costs
for advisors and other expenses attributable to a breach of any representation,
covenant or obligation of Electronics under this Agreement.

 

ARTICLE VIII

 

PAYMENTS

 

Section 8.1                                      Payments

 

(a)                                  General. Unless otherwise provided in this Agreement, in the event that an
Indemnifying Party is required to make a payment to an Indemnified Party
pursuant to this Agreement:

 

(i)                                     Aggregate Payments of Less than $10 Million. If such payments are in the aggregate less
than $10 million during the calendar quarter, the Indemnified Party shall
deliver written notice of the payments to the Indemnifying Party in accordance
with Section 14.3 during the calendar quarter in which the obligation giving rise
to the indemnification payment must be satisfied, and the Indemnifying Party
shall be required to make payment to the Indemnified Party within ten (10)
Business Days after the end of the calendar quarter in which written notice of
such payment is delivered to the Indemnifying Party (or, if later, within
thirty (30) Business Days of such delivery).

 

(ii)                                  Payments Equal to or Greater than $10 Million. If such payments are individually or in the
aggregate equal to or greater than $10 million, the Indemnified Party shall
deliver written notice of the payment to the Indemnifying Party in accordance
with Section 14.3 at least ten (10) Business Days in advance of the date or
dates on which the obligations giving rise to the indemnification payment must
be satisfied (in the case of aggregate payments in excess of $10 million, the
earliest date that any such payment must be satisfied), and the Indemnifying
Party shall be required to make payment to the Indemnified Party no later than  five (5) Business Days after receipt of such
notice. The Indemnified Party shall, within one (1) Business Day after the date
on which the obligation giving rise to the indemnification payment is
satisfied, pay interest to the Indemnifying Party that accrues (at a rate equal
to one (1) week LIBOR minus 25 basis points) on the amount of such payment from
the date of receipt of such payment by the Indemnified Party until the date on
which the obligation is satisfied.

 

(b)                                 Procedural Matters. The written notice delivered to the
Indemnifying Party in accordance with Section 14.3 shall show the amount due
and owing together with a schedule calculating in reasonable detail such amount
(and shall include any relevant Tax Return, statement, bill or invoice related
to Taxes, costs, expenses or other amounts due and owing). All payments
required to be made by one Party to another Party pursuant to this Section 8.1
shall be made by electronic, same day wire transfer. Payments shall be deemed
made when

 

29

 

received. If the
Indemnifying Party fails to make a payment to the Indemnified Party within the
time period set forth in this Section 8.1, such Indemnifying Party shall
not be considered to be in breach of its covenants and obligations established
in this Section 8.1 unless and until such failure exists on the date on which
the obligation giving rise to the indemnification payment must be satisfied; provided,
however, that the Indemnifying Party shall pay to the Indemnified Party
(i) interest that accrues (at a rate equal to the Prime Rate plus 200 basis
points) on the amount of such payment from the time that such payment was due
to the Indemnified Party until the date that payment is actually made to the
Indemnified Party; and (ii) any costs or expenses, including any breakage
costs, incurred by the Indemnified Party to secure such payment or to satisfy
the Indemnifying Party’s portion of the obligation giving rise to the
indemnification payment.

 

(c)                                  Right of Setoff. It is expressly understood that an
Indemnifying Party is hereby authorized to set off and apply any and all
amounts required to be paid to an Indemnified Party pursuant to this Section
8.1 against any and all of the obligations of the Indemnified Party to the
Indemnifying Party arising under Section 8.1 of this Agreement that are then
either due and payable or past due, irrespective of whether such Indemnifying
Party has made any demand for payment with respect to such obligations.

 

Section 8.2                                      Treatment of Payments made Pursuant to Tax
Sharing Agreement. Unless
otherwise required by a Final Determination or this Agreement, for U.S. federal
Tax purposes, any payment made pursuant to this Agreement by:

 

(a)                                  a Spinco Party to Tyco shall be treated for
all Tax purposes as a distribution by such Spinco Party to Tyco with respect to
stock of the Spinco Party under Section 301 of the Code occurring after the
Spinco Party is directly owned by Tyco and immediately before the applicable
Distribution;

 

(b)                                 Tyco to either of the Spinco Parties shall be
treated for all Tax purposes as a tax-free contribution by Tyco to the
appropriate Spinco Party with respect to its stock occurring after the Spinco
Party is directly owned by Tyco and immediately before the applicable
Distribution;

 

(c)                                  a Spinco Party to another Spinco Party shall
be treated for all Tax purposes as a distribution by the first Spinco Party to
Tyco with respect to stock of that Spinco Party under Section 301 of the Code
occurring after the Spinco Party is directly owned by Tyco and immediately
before the applicable Distribution followed by a tax-free contribution by Tyco
to the recipient Spinco Party with respect to its stock occurring after the
Spinco Party is directly owned by Tyco and immediately before the applicable
Distribution; and

 

in each case, none of the
Parties shall take any position inconsistent with such treatment. In the event
that a Taxing Authority asserts that a Party’s treatment of a payment pursuant
to this Agreement should be other than as required pursuant to this Agreement
(ignoring any potential inconsistent or adverse Final Determination), such
Party shall use its reasonable best efforts to contest such challenge.

 

Section 8.3                                      Treatment of Payments made Pursuant to
Separation and Distribution Agreement. Unless otherwise required by a Final Determination or this Article
VIII, for U.S.

 

30

 

federal Income Tax purposes,
payments made pursuant to the Separation and Distribution Agreement shall be
treated in accordance with the principles set forth in Section 8.2. Payments
made by a Party for costs and expenses relating to Assumed Tyco Contingent
Liabilities or otherwise pursuant to the Separation and Distribution Agreement
and for Specified Shared Expenses shall be treated as amounts deductible by
such Party pursuant to Section 162 of the Code, and none of the Parties shall
take any position inconsistent with such treatment, except to the extent that
there is a Final Determination with respect to the paying Party that such payment
is not deductible. In the event that a Taxing Authority asserts that a Party’s
treatment of a payment pursuant to the Separation and Distribution Agreement
should be other than as set forth in this Agreement (ignoring any potential
inconsistent or adverse Final Determination), such Party shall use its
reasonable best efforts to contest such challenge.

 

Section 8.4                                      Payments Net of Tax Benefit Actually Realized. All amounts required to be paid by one
Party to another pursuant to this Agreement or the Separation and Distribution
Agreement shall be reduced by the Tax Benefit Actually Realized by the
Indemnified Party or its Subsidiaries in the taxable year the payment is made
or any prior taxable year.

 

ARTICLE IX

 

AUDITS

 

Section 9.1                                      Notice. Within fifteen (15) Business Days after a Party or any of its
Affiliates receives a written notice from a Taxing Authority (reduced to five
(5) Business Days for written notices received from a state or local Taxing
Authority) of the existence of an Audit that may require indemnification
pursuant to this Agreement, that Party shall notify the other Parties of such
receipt and send such notice to the other Parties via overnight mail. The
failure of one Party to notify the other Parties of an Audit shall not relieve
such other Party of any liability and/or obligation that it may have under this
Agreement, except to the extent that the Indemnifying Party’s rights under this
Agreement are materially prejudiced by such failure.

 

Section 9.2                                      Pre-Distribution Audits.

 

(a)                                  Determination of Administering Party. Subject to Sections 9.2(b), 9.2(c), and
9.2(d):

 

(i)                                     Tyco and its Subsidiaries shall administer
and control all Pre-Distribution U.S. Income Tax Audits, all Pre-Distribution
Tyco (U.S.) Qualified Plan Tax Audits, and all Pre-Distribution TME Payroll Tax
Audits.

 

(ii)                                  Tyco and its Subsidiaries shall administer
and control all Pre-Distribution Transfer Pricing Tax Audits if such Audits
include a Subsidiary of any Party that is subject to U.S. Income Tax or involve
a Taxing Authority in the U.S.; provided, further, that all other
Pre-Distribution Transfer Pricing Tax Audits shall be administered and
controlled by the Party and its Subsidiaries that would be primarily liable
under applicable Law to pay to the applicable Taxing Authority the Taxes
resulting from such Audits.

 

31

 

(iii)                               Pre-Distribution Non-Income or Non-U.S. Tax
Audits shall be administered and controlled by the Party and its Subsidiaries
that would be primarily liable under applicable Law to pay to the applicable
Taxing Authority the Taxes resulting from such Audits.

 

(b)                                 Administration and Control; Cooperation. Subject to Section 9.2(c) and to a Change
of Control or a Bankruptcy of the Audit Management Party as provided below, the
Audit Management Party shall have absolute authority to make all decisions
(determined in its sole discretion) with respect to the administration and
control of such Audit, including the selection of all external advisors. In
that regard, the Audit Management Party (i) may in its sole discretion settle
or otherwise determine not to continue to contest any issue related to such
Audit without the consent of the other Parties, and (ii) shall, as soon as
reasonably practicable and prior to settlement of an issue that could cause one
or more other Parties to become responsible for Taxes under Section 9.3, notify
the Audit Representatives of such other Parties of such settlement. The other
Parties shall (and shall cause their Affiliates to) undertake all actions and
execute all documents (including an extension of the applicable statute of
limitations) that are determined in the sole discretion of the Audit Management
Party to be necessary to effectuate such administration and control. The
Parties shall act in good faith and use their reasonable best efforts to
cooperate fully with each other Party (and their Affiliates) in connection with
such Audit and shall provide or cause their Subsidiaries to provide such
information to each other as may be necessary or useful with respect to such
Audit in a timely manner, identify and provide access to potential witnesses,
and other persons with knowledge and other information within its control and
reasonably necessary to the resolution of the Audit. Notwithstanding anything
to the contrary in this Section 9.2(b), after a Change of Control or a
Bankruptcy of the Audit Management Party, the Audit Management Party shall not,
prior to the resolution of the vote permitted under Section 9.2(d)(ii) as a
result of such Change of Control or Bankruptcy (including the failure of any
Party to submit an Administration Vote Notice with respect to such Change of
Control), choose to litigate any issue with respect to an Audit or make any
decision to change the forum or jurisdiction with respect to which an issue
arising under an Audit is being litigated, without the prior written consent of
all of the Parties.

 

(c)                                  Participation Rights of Parties and
Information Sharing with respect to Audits.

 

(i)                                     Each Party that would be responsible under
Section 9.3 for Taxes resulting from an Audit (other than the Audit Management
Party) (a “Participating Party”) shall have limited participation rights as set
forth in this Section 9.2(c) with respect to such Audit. Promptly after the
Distributions, the Audit Management Party shall arrange for a meeting or
conference call that includes all of the Participating Parties to discuss the
status of all ongoing Audits. In addition, promptly after notification of an
Audit pursuant to Section 9.1, the Audit Management Party shall arrange for a
meeting or conference call that includes all of the Participating Parties to
plan for the management of such Audit. Thereafter, the Parties shall arrange
for a meeting (in the case of meetings with the Boca Raton Audit Team, such
meetings shall take place in Boca Raton, FL) or conference call to be held on a
monthly basis (or on such other basis as the Parties may agree) in order to
facilitate regular communication on the status of the Audits. These meetings
shall be scheduled at the beginning of each fiscal year and shall not be
rescheduled without the consent of all of the Parties. The Parties may
determine from time to time to have a separate special meeting to discuss a
significant Audit issue. Each Participating

 

32

 

Party shall identify any
personnel and external advisors who are participating in each of the meetings
described above, and shall provide a list of the names of such persons to the
Audit Management Party in advance of such meeting.

 

(ii)                                  Upon the reasonable request of a
Participating Party, the Audit Management Party shall make available relevant
personnel (including, as applicable, the Boca Raton Audit Team) and external
advisors to meet with the Participating Party and its independent auditor in
order to review the status of the Audits. As provided in Section 5.3 of the
Separation and Distribution Agreement, the independent auditors of the
Participating Parties shall have reasonable access to Audit-related information
and personnel. The Participating Parties shall provide the Audit Management
Party with reasonable notice of such requested meetings or information.

 

(iii)                               Except as provided herein, the Participating
Parties shall have no access to the external advisors retained by the Audit
Management Party to advise it and its Subsidiaries on matters pertaining to an
Audit (“Audit External Advisor”) except to the extent that the Audit Management
Party reasonably determines that the attendance of an Audit External Advisor at
a meeting described in (i) or (ii) above is appropriate. In the event that any
such meeting is attended by an Audit External Advisor, all of the Parties shall
have the right to participate in such meeting by telephone or in person. The Audit
Management Party shall provide the other Parties with notice (including the
time and location) of such meeting at least twenty-four (24) hours in advance
thereof. Any Participating Party may request a meeting with an Audit External
Advisor on matters that are unrelated to the Audit; provided; however, that if
the matter involves evaluating Audit related issues, the requesting
Participating Party must give all of the other Parties at least twenty-four
(24) hours notice prior to such meeting so that such Parties can elect to
participate (failure to respond to the Participating Party’s notice prior to
the meeting shall constitute an election to decline participation). No Party
shall request an opinion on an Audit related issue from an Audit External
Advisor unless the Audit Management Party affirmatively declines to obtain such
opinion.

 

(iv)                              Each Participating Party shall have access to
any written documentation in the possession of the Audit Management Party that
pertains to the Audit (including any written summaries of issues that the Audit
Management Party has developed in the context of evaluating the financial
reporting of the Audit) and the Audit Management Party shall make such
information available in Boca Raton, FL in the offices of the U.S. Audit Management
Party; provided, however, that if documentation was prepared
solely by or on behalf of a Party, then the documentation must relate to the
joint defense of the Audit. Such access shall be provided at such times and in
such manner as the Parties agree, but no less frequently than monthly. Copies
of the documentation will be made available to the Participating Parties at
their sole cost and expense. The Audit Management Party shall undertake to use
reasonable efforts to include within the written documentation described above
information that is transmitted through electronic means, such as through
internet e-mail. Subject to the exceptions listed on Schedule 9.2(c)(iv-1), the
Audit Management Party shall maintain an internet-based or other electronic document
repository system (which shall be Exam Manager unless the Audit Management
Party chooses another system in its sole discretion) for written documentation
related to the Audit, and each of the Participating Parties shall be granted,
if so requested, “read only” access to such repository system at such
requesting Party’s own cost

 

33

 

and expense. Such system
shall be managed and controlled by the Audit Management Party and all decisions
with respect to the system (including but not limited to the documents to be
posted to such system) shall be made by the Audit Management Party in its sole
discretion; provided, however, that the Audit Management Party
shall at a minimum post documents related to such Audits consistent with the
U.S. Audit Management Party’s document posting practices immediately prior to
the Distribution Date in respect to the U.S. federal Income Tax Audits of
Tyco’s, Electronic’s and Healthcare’s Subsidiaries. An illustrative, but not exclusive,
list of the documents and other information to be made available by the Audit
Management Party to the Participating Parties is set forth in Schedule
9.2(c)(iv-2).

 

(v)                                 The Participating Parties are encouraged to
provide consultation to the Audit Management Party in regards to Audit strategy
and shall, upon request of the Audit Management Party, provide such
consultation. The Participating Party may elect to employ separate counsel to
advise the Participating Party as additional counsel in or in connection with
an Audit, but in that event, the fees and expenses of the separate counsel
shall be paid solely by the Participating Party. The Audit Management Party
shall in good faith consider all advice and other input received from the
Participating Parties in connection with their consultations with respect to an
Audit. However, the Audit Management Party shall retain the sole authority to
make all Audit decisions. In that regard, the Participating Parties and their
separate counsels shall not be allowed to participate in any Audit-related
meetings other than those described in (i) or (ii) above (unless such a meeting
is attended by the personnel of a Participating Party, in which case that
Participating Party may attend the meeting but may not actively participate),
respond directly to a Taxing Authority conducting the Audit, or in any manner
control resolution of the Audit.

 

(d)                                 Change in Audit Management Party.

 

(i)                                     Upon (a) the second anniversary following the
Effective Time and annually on each anniversary date thereafter; (b) the
expiration of the three (3) month period following a Change of Control of the
Audit Management Party; or (c) the expiration of the three (3) month period
following a Bankruptcy of the Audit Management Party (each of (a), (b), and
(c), a “Tax Management Change Event”), a Party’s Audit Representative may call
for a vote to decide whether the current Audit Management Party should be
replaced by another Party by providing written notice of such vote to the other
Parties thirty (30) days prior to such Tax Management Change Event
(“Administration Vote Notice”).

 

(ii)                                  Within fifteen (15) days after the other
Parties’ receipt of an Administration Vote Notice, the Parties’ Audit
Representatives shall meet together (either in person, telephonically or by
other electronic means) and discuss any information that is deemed to be
relevant to the Parties’ vote. Thirty (30) days after the other Parties’
receipt of an Administration Vote Notice, the Board of Directors of each of the
Parties shall submit to the other Parties a written vote identifying the one
Party that it casts its vote for to be appointed the Audit Management Party.

 

(iii)                               In the case of a vote under (ii) above, if a
Party other than the current Audit Management Party receives a majority in
number of the votes of the Parties, that Party (the “Elected Party”) and its
Subsidiaries shall be appointed the new Audit Management

 

34

 

Party upon delivery of
written acceptance of the appointment to each other Party within five (5) days
after the vote (“Acceptance Notice”). If the Elected Party delivers the
Acceptance Notice, then the Elected Party shall immediately have and assume all
of the rights and obligations of the Audit Management Party under this
Agreement. Except as provided in Section 9.2(d)(iv), upon delivery of the
Acceptance Notice, the Replaced Audit Management Party shall have no further
rights or obligations as the Audit Management Party (other than for any expense
or cost reimbursements incurred prior to its replacement). If (a) the current
Audit Management Party receives a majority in number of votes, (b) no Party
receives a majority of the votes cast, or (c) the Elected Party fails to
deliver the Acceptance Notice, then the Audit Management Party shall remain the
Party then appointed.

 

(iv)                              If as a result of a vote under (ii) above,
there is a replacement of the then appointed Audit Management Party (the “Replaced
Audit Management Party”), the Replaced Audit Management Party shall use its
reasonable best efforts to transition to the new Audit Management Party the
administration and control of the ongoing Audits that the Replaced Audit
Management Party was prior to its replacement responsible for administering and
controlling pursuant to Section 9.2(a).

 

(v)                                 Each Party has the exclusive right to replace
its respective Audit Representative provided that such Audit Representative
must be an employee of such Party or any of its Affiliate, and in the event of
such replacement, the applicable Party shall provide written notice of such
replacement to the other Parties.

 

(e)                                  Sharing of Internal and External Costs and
Expenses related to Pre-Distribution U.S. Income Tax Audits, Pre-Distribution
Tyco (U.S.) Qualified Plan Tax Audits, Pre-Distribution TME Payroll Tax Audits,
and Pre-Distribution Transfer Pricing Tax Audits.

 

(i)                                     External Costs and Expenses. All external costs and expenses (including
all costs and expenses of calculating Taxes and other amounts payable
hereunder) that are incurred by the Audit Management Party with respect to a
Pre-Distribution U.S. Income Tax Audit, a Pre-Distribution Tyco (U.S.)
Qualified Plan Tax Audit, a Pre-Distribution TME Payroll Tax Audit, or a Pre-Distribution
Transfer Pricing Tax Audit (including any costs and expenses incurred as a
result of any reporting obligations that arise out of an Audit, such as the
reporting of any Audit adjustments to the various U.S. states) shall be shared
on an equal one-third (1/3) basis by each of the Parties. The Audit Management
Party shall provide to the other Parties at the end of each calendar quarter an
invoice for each other Party’s share of the external costs (along with
supporting invoices received from the external service providers), and each
other Party shall remit, within sixty (60) days after receipt of the invoice,
payment of their share of the external costs to the Audit Management Party.

 

(ii)                                  Internal Costs and Expenses. The U.S. Audit Management Party shall
estimate the internal costs and expenses that it expects will be incurred by
the Boca Raton Audit Team (based on consistent past practices) during the five
(5) year period that starts on the Distribution Date and ends on the fifth
anniversary thereof, and shall provide such estimate on Schedule 9.2(e)(ii).
Each of the other Parties shall pay the U.S. Audit Management Party, within
sixty (60) days of the beginning of each year in this five (5) year period, a
fixed fee equal to (a) one-third (1/3) of the internal costs and expenses shown
in the estimate provided by the U.S.

 

35

 

Audit Management Party on
Schedule 9.2(e)(ii), divided by (b) five (5). Prior to the end of such five (5)
year period, the Parties shall renegotiate this fee for succeeding periods. No
adjustment shall be made for any difference between the internal costs and
expenses estimated by the U.S. Audit Management Party and the amount of such
costs and expenses that are actually incurred by the U.S. Audit Management
Party. The other Parties acknowledge that they may incur internal costs and
expenses related to an Audit that are not reimbursed pursuant to this Agreement
and that the only internal costs and expenses that are subject to sharing and
reimbursement are the internal costs and expenses incurred by the U.S. Audit
Management Party as provided in Schedule 9.2(e)(ii).

 

(f)                                    Treatment of Costs and Expenses related to
Pre-Distribution U.S. Income Tax Audits, Pre-Distribution Tyco (U.S.) Qualified
Plan Tax Audits, Pre-Distribution TME Payroll Tax Audits, and Pre-Distribution
Transfer Pricing Tax Audits.
Payments borne by the Parties or any of their Subsidiaries for costs and
expenses relating to Pre-Distribution U.S. Income Tax Audits, Pre-Distribution
Tyco (U.S.) Qualified Plan Tax Audits, Pre-Distribution TME Payroll Tax Audits,
and Pre-Distribution Transfer Pricing Tax Audits shall be treated as amounts
deductible by the paying Party (or its Subsidiary) pursuant to Section 162 of the
Code, and none of the Parties or any of their Subsidiaries shall take any
position inconsistent with such treatment, except to the extent that a Final
Determination with respect to the paying Party or its Subsidiary causes any
such payment to not be so treated.

 

(g)                                 Geographical Movement of Audit. Notwithstanding anything to the contrary in
this Section 9.2, (i) the Audit Management Party shall not move the
administration and control of a Pre-Distribution U.S. Income Tax Audit, a
Pre-Distribution Tyco (U.S.) Qualified Plan Tax Audit, or a Pre-Distribution
TME Payroll Tax Audit from Boca Raton, FL without the prior consent of the
other Parties; and (ii) all Pre-Distribution U.S. Income Tax Audits,
Pre-Distribution Tyco (U.S.) Qualified Plan Tax Audits, Pre-Distribution TME
Payroll Tax Audits, must be administered and controlled in the same location. A
vote to move the administration and control of a Pre-Distribution U.S. Income
Tax Audit, a Pre-Distribution Tyco (U.S.) Qualified Plan Tax Audit, or a Pre-Distribution
TME Payroll Tax Audit from Boca Raton, FL shall be made at the time and in the
manner specified in Section 9.2(d).

 

(h)                                 Power of Attorney/Officer Signature. Each Party hereby appoints (and shall cause
its Subsidiaries to appoint) the Audit Management Party (and its designated
representatives) as its agent and attorney-in-fact to take the actions the
Audit Management Party deems necessary or appropriate to implement the
responsibilities of the Audit Management Party under this Agreement. Each Party
also shall (or shall cause its Subsidiaries to) execute and deliver to the
Audit Management Party a power of attorney, substantially in the form attached
hereto as Schedule 9.2(h-1), and such other documents as are reasonably
requested from time to time by the Audit Management Party (or its designee).
Such other documents include, but are not limited to, documents signed by an
authorized corporate officer of a Party (or a Subsidiary of a Party), where the
Audit Management Party determines that a power of attorney is insufficient (in
which case such signed documents shall not be withheld) to allow the Audit
Management Party to make the necessary or appropriate filings or to take steps
necessary or appropriate to the Audit Management Party’s defense, prosecution,
or settlement of an Audit under this Agreement; provided, that (i) such
power of attorney or such other documents shall not expand the rights or powers
of such Audit Management Party beyond those provided by this Agreement; (ii)

 

36

 

activities conducted under a
power of attorney or such other documents are limited to the activities
authorized by that power of attorney or such other documents; (iii) a power of
attorney or such other documents delivered by a Party to the Audit Management
Party can be revoked only with the approval of the Audit Committee of the Board
of Directors of the Party to which the power of attorney or such other
documents relates; and (iv) a revocation of a power of attorney or such other
documents by a Party’s Audit Committee also effects the immediate revocation of
all powers of attorney or such other documents granted under, or derived from,
the authority of the power of attorney that is revoked by that Party’s Audit
Committee. Examples of activities for which the signature of a Party’s
authorized representative could be required are set forth on Schedule 9.2(h-2).

 

(i)                                     Adjustments Resulting from Redo Project. Any adjustment to an Income Tax Return
resulting from the Redo Project that is not otherwise adjusted by the IRS shall
be treated as an adjustment of Taxes arising in connection with a Final
Determination with respect to a Pre-Distribution U.S. Income Tax Audit, or as a
Refund of Taxes reported on an Income Tax Return that is the subject of a
Pre-Distribution U.S. Income Tax Audit, as the case may be. The Parties shall
share any such adjustment to an Income Tax Return or Refund of Taxes in
accordance with their Sharing Percentages pursuant to Sections 9.3(a) and
4.1(a), as applicable.

 

Section 9.3                                      Payment of Audit Amounts.

 

(a)                                  Pre-Distribution U.S. Income Tax Audits. Except with regard to adjustments to
carryback claims in Section 4.2, in connection with any Final Determination
with respect to a Pre-Distribution U.S. Income Tax Audit:

 

(i)                                     Tyco shall be liable for and shall pay or
cause to be paid to the applicable Taxing Authority, Healthcare, or Electronics
(as the case may be) an amount equal to the Tyco Sharing Percentage of the
additional Taxes due and payable as a result of such Final Determination that
are attributable to a Pre-Distribution Tax Period or the portion of a Straddle
Tax Period ending on the Distribution Date.

 

(ii)                                  Electronics shall be liable for and shall pay
or cause to be paid to the applicable Taxing Authority, Tyco, or Healthcare (as
the case may be) an amount equal to the Electronics Sharing Percentage of the
additional Taxes due and payable as a result of such Final Determination that
are attributable to a Pre-Distribution Tax Period or the portion of a Straddle
Tax Period ending on the Distribution Date.

 

(iii)                               Healthcare shall be liable for and shall pay
or cause to be paid to the applicable Taxing Authority, Tyco, or Electronics
(as the case may be) an amount equal to the Healthcare Sharing Percentage of
the additional Taxes due and payable as a result of such Final Determination
that are attributable to a Pre-Distribution Tax Period or the portion of a
Straddle Tax Period ending on the Distribution Date.

 

(b)                                 Pre-Distribution Transfer Pricing Tax Audits. In connection with any Final Determination
with respect to a Pre-Distribution Transfer Pricing Tax Audit:

 

(i)                                     Tyco shall be liable for and shall pay or
cause to be paid to the applicable Taxing Authority, Healthcare, or Electronics
(as the case may be) an amount equal to

 

37

 

the Tyco Sharing Percentage
of the additional Taxes due and payable as a result of such Final Determination
that are attributable to a Pre-Distribution Tax Period or the portion of a Straddle
Tax Period ending on the Distribution Date.

 

(ii)                                  Electronics shall be liable for and shall pay
or cause to be paid to the applicable Taxing Authority, Tyco, or Healthcare (as
the case may be) an amount equal to the Electronics Sharing Percentage of the
additional Taxes due and payable as a result of such Final Determination that
are attributable to a Pre-Distribution Tax Period or the portion of a Straddle
Tax Period ending on the Distribution Date.

 

(iii)                               Healthcare shall be liable for and shall pay
or cause to be paid to the applicable Taxing Authority, Tyco, or Electronics
(as the case may be) an amount equal to the Healthcare Sharing Percentage of
the additional Taxes due and payable as a result of such Final Determination
that are attributable to a Pre-Distribution Tax Period or the portion of a
Straddle Tax Period ending on the Distribution Date.

 

(c)                                  Pre-Distribution Non-Income or Non-U.S. Tax
Audits. In connection with
any Final Determination with respect to a Pre-Distribution Non-Income or Non-U.S.
Tax Audit:

 

(i)                                     Tyco shall be liable for and shall pay or
cause to be paid to the applicable Taxing Authority, Healthcare, or Electronics
(as the case may be) the Tyco Allocable Audit Portion due and payable as a
result of such Final Determination.

 

(ii)                                  Electronics shall be liable for and shall pay
or cause to be paid to the applicable Taxing Authority, Tyco, or Healthcare (as
the case may be) the Electronics Allocable Audit Portion due and payable as a
result of such Final Determination.

 

(iii)                               Healthcare shall be liable for and shall pay
or cause to be paid to the applicable Taxing Authority, Tyco, or Electronics
(as the case may be) the Healthcare Allocable Audit Portion due and payable as
a result of such Final Determination.

 

(d)                                 Pre-Distribution Tyco (U.S.) Qualified Plan
Tax Audits. In connection
with any Final Determination with respect to a Pre-Distribution Tyco (U.S.)
Qualified Plan Tax Audit:

 

(i)                                     Tyco shall be liable for and shall pay or
cause to be paid to the applicable Taxing Authority, Healthcare, or Electronics
(as the case may be) an amount equal to the Tyco Sharing Percentage of the
additional Taxes due and payable as a result of such Final Determination that
are attributable to a Pre-Distribution Tax Period or the portion of a Straddle
Tax Period ending on the Distribution Date.

 

(ii)                                  Electronics shall be liable for and shall pay
or cause to be paid to the applicable Taxing Authority, Tyco, or Healthcare (as
the case may be) an amount equal to the Electronics Sharing Percentage of the
additional Taxes due and payable as a result of such Final Determination that
are attributable to a Pre-Distribution Tax Period or the portion of a Straddle
Tax Period ending on the Distribution Date.

 

38

 

(iii)                               Healthcare shall be liable for and shall pay
or cause to be paid to the applicable Taxing Authority, Tyco, or Electronics
(as the case may be) an amount equal to the Healthcare Sharing Percentage of
the additional Taxes due and payable as a result of such Final Determination
that are attributable to a Pre-Distribution Tax Period or the portion of a
Straddle Tax Period ending on the Distribution Date.

 

(e)                                  Pre-Distribution TME Payroll Tax Audits. In connection with any Final Determination
with respect to a Pre-Distribution TME Payroll Tax Audit:

 

(i)                                     Tyco shall be liable for and shall pay or
cause to be paid to the applicable Taxing Authority, Healthcare, or Electronics
(as the case may be) eighty-three percent (83%) of the additional Taxes due and
payable as a result of such Final Determination that are attributable to a
Pre-Distribution Tax Period or the portion of a Straddle Tax Period ending on
the Distribution Date.

 

(ii)                                  Electronics shall be liable for and shall pay
or cause to be paid to the applicable Taxing Authority, Tyco, or Healthcare (as
the case may be) ten percent (10%) of the additional Taxes due and payable as a
result of such Final Determination that are attributable to a Pre-Distribution
Tax Period or the portion of a Straddle Tax Period ending on the Distribution
Date.

 

(iii)                               Healthcare shall be liable for and shall pay
or cause to be paid to the applicable Taxing Authority, Tyco, or Electronics
(as the case may be) seven percent (7%) of the additional Taxes due and payable
as a result of such Final Determination that are attributable to a
Pre-Distribution Tax Period or the portion of a Straddle Tax Period ending on
the Distribution Date.

 

(f)                                    Adjustments to Refunds. Notwithstanding Section 9.3(a), (b), (c),
(d), or (e), if a Final Determination with respect to an Audit includes an
adjustment to a Refund previously received by a Party or its Affiliates, such
Party shall be liable for one hundred percent (100%) of the amount owed to the
extent of such recovery. For purposes of this Section 9.3(f), an amount shall
be considered to be owed when it is actually paid or satisfied pursuant to an
offset.

 

(g)                                 Payment Procedures. In connection with any Audit that results
in an amount to be paid pursuant to Section 9.3(a), (b), (c), (d), or (e), the
Audit Management Party shall, within thirty (30) Business Days following a
final resolution of such Audit, submit in writing to the other Parties a
preliminary determination (calculated and explained in detail reasonably
sufficient to enable the Parties to fully understand the basis for such
determination and to permit such Parties and their Affiliates to satisfy their
financial reporting requirements) of the portion of such amount to be paid by
each of the Parties pursuant to Section 9.3(a), (b), (c), (d), (e), or (f), as
applicable. Each of the Parties and its Affiliates shall have access to all
data and information necessary to calculate such amounts and the Parties and
their Affiliates shall cooperate fully in the determination of such amounts.
Within twenty (20) Business Days following the receipt by a Party of the
information described in this Section 9.3(g), such Party shall have the right
to object only to the calculation of the amount of the payment (but not the
basis for the payment) by written notice to the other Parties; such written
notice shall contain

 

39

 

such disputed item or items
and the basis for its objection. If no Party objects by proper written notice
to the other Parties within the time period described in this Section 9.3(g),
the calculation of the amounts due and owing from each Party shall be deemed to
have been accepted and agreed upon, and final and conclusive, for purposes of
this Section 9.3(g). If any Party objects by proper written notice to the other
Parties within such time period, the Parties shall act in good faith to resolve
any such dispute as promptly as practicable in accordance with Article XIII.
The Party or its Affiliate responsible for paying to the applicable Taxing Authority
under applicable Law amounts owed pursuant to a Final Determination shall make
such payments to such Taxing Authority prior to the due date for such payments.
The other Parties shall reimburse the paying Party in accordance with Article
VIII for the portion of such payments for which such other Parties are liable
pursuant to this Section 9.3. The time periods specified above for submitting a
preliminary determination and objecting may be shortened to a time period
determined by a Majority of the Parties if these Parties ascertain that such
shortened time period is necessary to meet the Audit obligations of the Parties
and their Affiliates.

 

(h)                                 Advance Payment of Taxes. In the event that the Audit Management
Party decides to contest the position of a Taxing Authority taken with respect
to a Pre-Distribution U.S. Income Tax Audit, a Pre-Distribution Tyco (U.S.)
Qualified Plan Tax Audit, a Pre-Distribution TME Payroll Tax Audit, or a
Pre-Distribution Transfer Pricing Tax Audit in a forum or jurisdiction that
requires the prepayment or deposit of the Taxes (or security for the Taxes) in
order to contest the Taxes determined by the Taxing Authority to be due and
payable, each of the other Parties must pay to the Audit Management Party its
portion of such prepayment determined in accordance with this Section 9.3; provided,
however, if any Party’s portion of such prepayment exceeds $500 million,
the Parties shall only be obligated to pay their portions of such prepayment if
a Majority of the Parties votes in favor of the Audit Management Party’s
decision as to choice of forum or jurisdiction. Each of the Parties shall
deliver its written vote to the Audit Management Party within ten (10) days of
its receipt of written notice of the Audit Management Party’s decision as to
choice of forum or jurisdiction and the amount of the required prepayment. A
recoupment of all or a portion of a prepayment of Taxes resulting from a Final
Determination shall be paid to the Party or Parties that contributed to such
prepayment, in proportion to such contributions. No Party shall be liable to
any other Party in the event that a Final Determination does not allow for the
recovery of all or a portion of a prepayment.

 

Section 9.4                                      Correlative Adjustments. If pursuant to a Final Determination there
is a Correlative Adjustment attributable to a Pre-Distribution Non-Income or
Non-U.S. Tax Audit that causes a Party or its Affiliate to become entitled to a
tax benefit, such Party shall pay the amount of the Tax Benefit Actually Realized
in respect to the taxable years included in the Final Determination to the
Party that experiences (or whose Affiliate experiences) a tax detriment as a
result of such Correlative Adjustment.

 

ARTICLE X

 

COOPERATION AND EXCHANGE OF INFORMATION

 

Section 10.1                                Cooperation and Exchange of Information. The Parties shall each cooperate fully (and
each shall cause its respective Affiliates to cooperate fully) and in a timely
manner (considering the other Party’s normal internal processing or reporting
requirements) with

 

40

 

all reasonable requests from
another Party hereto, or from an agent, representative, or advisor to such
Party, in connection with the preparation and filing of Tax Returns, claims for
Refund, Audits, determinations of Tax Attributes and the calculation of Taxes
or other amounts required to be paid hereunder, and any applicable financial
reporting requirements of a Party or its Affiliates, in each case, related or
attributable to or arising in connection with Taxes or Tax Attributes of any of
the Parties or their respective Subsidiaries covered by this Agreement. Such
cooperation shall include, without limitation:

 

(a)                                  the retention until the expiration of the
applicable statute of limitations or, if later, until the expiration of all
relevant Tax Attributes (in each case taking into account all waivers and
extensions), and the provision upon request, of Tax Returns of the Parties and
their respective Subsidiaries for periods up to and including the Distribution
Date, books, records (including information regarding ownership and Tax basis
of property), documentation, and other information relating to such Tax
Returns, including accompanying schedules, related work papers, and documents
relating to rulings or other determinations by Taxing Authorities;

 

(b)                                 the execution of any document that may be
necessary or reasonably helpful in connection with any Audit of any of the
Parties or their respective Subsidiaries, or the filing of a Tax Return or
Refund claim of the Parties or any of their respective Subsidiaries (including
the signature of an officer of a Party or its Subsidiary);

 

(c)                                  the use of the Party’s reasonable best
efforts to obtain any documentation and provide additional facts, insights or
views as requested by another Party that may be necessary or reasonably helpful
in connection with any of the foregoing (including without limitation any
information contained in Tax or other financial information databases); and

 

(d)                                 the use of the Party’s reasonable best
efforts to obtain any Tax Returns (including accompanying schedules, related
work papers, and documents), documents, books, records, or other information
that may be necessary or helpful in connection with any Tax Returns of any of
the Parties or their Affiliates.

 

Each Party shall make its
and its Subsidiaries’ employees and facilities available on a reasonable and
mutually convenient basis in connection with the foregoing matters. Except for
costs and expenses otherwise allocated among the Parties pursuant to this
Agreement, including costs incurred under Article II and Article IX, no
reimbursement shall be made for costs and expenses incurred by the Parties as a
result of cooperating pursuant to this Section 10.1.

 

Section 10.2                                Retention of Records. Subject to Section 10.1, if any of the
Parties or their respective Subsidiaries intends to dispose of any
documentation (including, without limitation, documentation that is being
retained pursuant to IRS guidelines, such as Revenue Procedure 98-25 and
Revenue Procedure 97-22) relating to the Taxes of the Parties or their
respective Subsidiaries for which another Party to this Agreement may be
responsible pursuant to the terms of this Agreement (including, without
limitation, Tax Returns, books, records, documentation, and other information,
accompanying schedules, related work papers, and documents relating to rulings
or other determinations by Taxing Authorities), such Party shall or shall cause
written notice to the other Parties describing the documentation to be
destroyed or disposed of sixty (60) Business Days prior to taking such action.
The other Parties may arrange

 

41

 

to take delivery of the
documentation described in the notice at their expense during the succeeding
sixty (60) day period.

 

ARTICLE XI

 

ALLOCATION OF TAX ATTRIBUTES, DUAL CONSOLIDATED LOSSES AND

OTHER TAX MATTERS

 

Section 11.1                                Allocation of Tax Attributes. Each Party shall make its own determination
as to the existence and the amount of the Tax Attributes to which it is
entitled after the Effective Time; provided, however, that such
determination shall be made in a manner that is (a) reasonably consistent with
the past practices of the Parties; (b) in accordance with the rules prescribed
by applicable Law, including the Code and the Treasury Regulations; (c)
consistent with the IRS Ruling, the Tax Representation Letters, and the Tax
Opinions; and (d) reasonably determined by the Party to minimize the aggregate
cash Tax liability of the Parties for all Pre-Distribution Tax Periods and the
portion of all Straddle Tax Periods ending on the Distribution Date. Each Party
agrees to provide the other Parties with all of the information supporting the
Tax Attribute determinations made by that Party pursuant to this Section 11.1.
Notwithstanding the above, the Tax Attributes listed on Schedule 11.1 shall be
allocated among the Parties in the manner specified thereon.

 

Section 11.2                                Dual Consolidated Losses. The Parties agree to (and if necessary
shall cause their Subsidiaries to) use their reasonable efforts to enter into a
closing agreement with the IRS as described in Treasury Regulations Section
1.1503-2(g)(2)(iv)(B)(3)(i) with respect to any “dual consolidated loss”
(within the meaning of Section 1503(d) of the Code and Treasury Regulations
Section 1.1503-2(c)(5)) that one or more of the Parties (or their Subsidiaries)
is reasonably likely to be required to include in income as a result of the
Plan of Separation. If any dual consolidated loss that was incurred prior to
the Effective Time is required to be included in the income of any Party (or
its Subsidiaries) because the Parties were not able to obtain a closing
agreement, the Parties shall share all Taxes that become due and payable for a
Pre-Distribution Tax Period or the portion of a Straddle Tax Period ending on
the Distribution Date in accordance with their Sharing Percentages.

 

Section 11.3                                Payment for Use of Certain Tax Attributes. If Healthcare utilizes any Tax Attribute
described in Schedule 11.3 during a Tax year, resulting in a Tax Benefit
Actually Realized in that year, Healthcare shall promptly notify the other
Parties and shall pay each other Party, within fifteen (15) days after the
realization of the Tax Benefit Actually Realized, one-third (1/3) of the amount
of such Tax Benefit Actually Realized. Healthcare shall not withhold on any
payment made to a Party pursuant to this Section 11.3, provided that on or
prior to the date of payment such Party provides Healthcare with an opinion of
counsel that such payment should not be subject to federal income Tax
withholding. If any Tax Attribute with respect to which payment is made
pursuant to this Section 11.3 is subsequently disallowed pursuant to a Final
Determination, the Parties shall share any amount owed as a result of such
Final Determination that is attributable to the disallowance of such Tax
Attribute in accordance with how the benefit of such Tax Attribute was shared
under this Section 11.3. Nothing in this Section 11.3 shall be deemed to impose
an obligation on Healthcare to utilize or to engage in any

 

42

 

planning to determine how to
utilize the Tax Attributes described in Schedule 11.3 for any taxable year.

 

Section 11.4                                Third Party Tax Indemnities and Benefits. Notwithstanding anything to the contrary in
this Agreement, the Parties shall share in accordance with their Sharing
Percentages (a) any duty or obligation (contractual or otherwise) of a Party or
any of its Affiliates, and (b) any Tax benefits, in either case, that arose or
is attributable to a period (or portion thereof) ending on or prior to the
Distribution Date, to reimburse or be reimbursed by, as the case may be, a
Person other than a Party or its Affiliates pursuant to a contractual Tax
indemnity agreement entered into in conjunction with the acquisition or
disposition of a business. Each Party shall promptly notify the other Parties
upon receiving notice of any amount to be shared pursuant to this Section 11.4.

 

Section 11.5                                Allocation of Tax Items. All determinations (whether for purposes of
preparing Tax Returns or for purposes of determining a Party’s responsibility
for Taxes under this Agreement) regarding the allocation of Tax items between
the portion of a Straddle Tax Period that ends on the Distribution Date and the
portion that begins the day after the Distribution Date shall be made pursuant
to the principles of Treasury Regulations Section 1.1502-76(b) or of a
corresponding provision under the Laws of other jurisdictions; provided,
further, that Tax items may be ratably allocated to the extent provided
by and pursuant to the principles of Treasury Regulations Section
1.1502-76(b)(2)(ii). Any such allocation of Tax items shall initially be made
by Tyco. To the extent that Electronics or Healthcare disagrees with such
determination, the dispute shall be resolved pursuant to the provisions of
Article XIII.

 

ARTICLE XII

 

DEFAULTED AMOUNTS

 

Section 12.1                                General. In the event that one or more Parties defaults on its obligation to
pay Distribution Taxes for which it is liable pursuant to Article V to another
Party, then each non-defaulting Party shall be required to pay an equal portion
of such Distribution Taxes to such other Party; provided, however,
that no payment obligation shall exist under this Section 12.1 with respect to
Distribution Taxes that are attributable to the Fault of one or more Parties; provided,
further, that any payment of Distribution Taxes by a non-defaulting
Party pursuant to this Section 12.1 shall in no way release the defaulting
Party from its obligations to pay such Distribution Taxes and any
non-defaulting Party may exercise any available legal remedies available
against such defaulting Party; provided, further, that interest
shall accrue on any such payment by a non-defaulting Party at a rate per annum
equal to the then applicable Prime Rate plus four percent (4%), or the maximum
legal rate, whichever is lower. In connection with the foregoing, it is
expressly understood that any defaulting Party’s rights to any amounts to be
received by such defaulting Party hereunder may be used via a right of offset
to satisfy, in whole or in part, the obligations of such defaulting Party to
pay the Distribution Taxes (and obligations for Assumed Tyco Contingent
Liabilities as such term is defined for purposes of the Separation and
Distribution Agreement) that are borne by the non-defaulting Parties; such
rights of offset shall be applied in favor of the non-defaulting Party or
Parties in proportion to the additional amounts paid by any such non-defaulting
Party or Parties.

 

43

 

Section 12.2                                Subsidiary Funding. Without limitation of the Parties’ rights
and obligations otherwise set forth in this Agreement and provided that no
other Party has defaulted on any of its obligations pursuant to this Agreement,
each Party agrees to provide or cause to be provided such funding as is
necessary to ensure that its respective Subsidiaries are able to satisfy their respective
Tax liabilities to a Taxing Authority that arise as a result of a Final
Determination under Section 9.3 of this Agreement, including any such Tax
liabilities that, upon default by a Party’s Subsidiary, may result in another
Party’s Subsidiary paying or being required to pay the defaulted Tax
liabilities to a Taxing Authority.

 

ARTICLE XIII

 

DISPUTE RESOLUTION

 

Section 13.1                                Negotiation. In the event of a controversy, dispute or claim arising out of, in
connection with, or in relation to the interpretation, performance,
nonperformance, validity or breach of this Agreement or otherwise arising out
of, or in any way related to this Agreement or the transactions contemplated
hereby, including any claim based on contract, tort, statute or constitution (“Dispute”),
the general counsels of the relevant Parties (or such other executive officers
designated by the relevant Party) shall negotiate for a reasonable period of
time to settle such Dispute; provided, however, that such
reasonable period shall not, unless otherwise agreed by the relevant Parties in
writing, exceed forty-five (45) days from the date of receipt by a Party of
written notice of such Dispute (“Dispute Notice”); provided, further,
that in the event of any arbitration in accordance with Section 13.2 hereof,
the relevant Parties shall not assert the defenses of statute of limitations
and laches arising during the period beginning after the date of receipt of the
Dispute Notice, and any contractual time period or deadline under this
Agreement or any Ancillary Agreement to which such Dispute relates occurring
after the Dispute Notice is received shall not be deemed to have passed until
such Dispute has been resolved. If the general counsels of the relevant Parties
(or such other executive officers designated by the relevant Party) are unable
to resolve the Dispute within forty-five (45) days from the receipt by a Party
(or Parties) of a Dispute Notice (or within a different period agreed to by the
relevant Parties in writing), the Dispute shall be resolved in accordance with
Section 13.2(a) or Section 13.2(b) as the case may be.

 

Section 13.2                                Mediation. If, within forty-five (45) days after receipt by a Party of a Dispute
Notice, the Parties have not succeeded in negotiating a resolution of the Dispute,
the Parties agree to submit the Dispute at the earliest possible date to
mediation conducted in accordance with the Commercial Mediation Rules of the
American Arbitration Association (“AAA”), and to bear equally the costs of the
mediation. The Parties agree to participate in good faith in the mediation and
negotiations related thereto for a period of thirty (30) days or such longer
period as they may mutually agree following the initial mediation session (the “Mediation
Period”).

 

Section 13.3                                Arbitration. Subject to Section 13.10, if the Dispute has not been resolved for
any reason after the Mediation Period, such Dispute shall be determined, at the
request of any relevant Party, by arbitration conducted in New York City, in
accordance with the then-existing Commercial Arbitration Rules of the AAA,
except as modified herein (the “Rules”). There shall be three arbitrators. If
there are only two Parties to the arbitration, each Party shall appoint one

 

44

 

arbitrator within twenty
(20) days of receipt by respondent of a copy of the demand for arbitration. The
two party-appointed arbitrators shall have twenty (20) days from the
appointment of the second arbitrator to agree on a third arbitrator who shall
chair the arbitral tribunal. If there are three Parties to the arbitration,
such Parties shall each appoint one arbitrator within twenty (20) days of
receipt by respondent of a copy of the demand for arbitration. Any arbitrator
not timely appointed by the Parties under this Section 13.3 shall be appointed
by the AAA in accordance with the listing, ranking and striking method in the
Rules, and in any such procedure, each Party shall be given a limited number of
strikes, excluding strikes for cause. Any controversy concerning whether a
Dispute is arbitrable, whether arbitration has been waived, whether a Party to
or assignee of this Agreement is bound to arbitrate, or as to the
interpretation, applicability or enforceability of this Article XIII shall be
determined by the arbitrators. In resolving any Dispute, the Parties intend
that the arbitrators shall apply applicable Tax Laws and the substantive Laws
of the State of New York, without regard to any choice of Law principles
thereof that would mandate the application of the Laws of another jurisdiction.
The Parties intend that the provisions to arbitrate set forth herein be valid,
enforceable and irrevocable, and any award rendered by the arbitrators shall be
final and binding on the Parties. The Parties agree to comply and cause the
members of their applicable Group to comply with any award made in any such
arbitration proceedings and agree to enforcement of or entry of judgment upon
such award, in any court of competent jurisdiction, including but not limited to
(a) the Supreme Court of the State of New York, New York County, or (b) the
United States District Court for the Southern District of New York. The
arbitrators shall be entitled, if appropriate, to award any remedy in such
proceedings in accordance with the terms of this Agreement and applicable Law,
including monetary damages, specific performance and all other forms of legal
and equitable relief; provided, however, the arbitrators shall
not be entitled to award punitive, exemplary, treble or any other form of
non-compensatory damages unless in connection with indemnification for a
third-party claim (and in such a case, only to the extent awarded in such
third-party claim).

 

Section 13.4                                Arbitration with Respect to Monetary Damages. Subject to Section 13.10, in the event the
Dispute involves (a) valuation of a liability under this Agreement, (b) an
amount in controversy in a Dispute, or (c) an amount of damages following a
determination of liability, the arbitration shall proceed in the following
manner:  Each Party shall submit to the
arbitrators and exchange with each other, on a schedule to be determined by the
arbitrators, a proposed valuation, amount or damages, as the case may be,
together with a statement, including all supporting documents or other evidence
upon which it relies, setting forth such Party’s explanation as to why its
proposal is reasonable and appropriate. The arbitrators, within fifteen (15)
days of receiving such proposals and supporting documents, shall choose between
the proposals and shall be limited to awarding only one of the proposals
submitted.

 

Section 13.5                                Arbitration Period. Any arbitration proceeding shall be
concluded in a maximum of six (6) months from the commencement of the
arbitration. The Parties involved in the proceeding may agree in writing to
extend the arbitration period if necessary to appropriately resolve the
Dispute.

 

Section 13.6                                Treatment of Negotiations, Mediation, and
Arbitration. Without
limiting the provisions of the Rules, unless otherwise agreed in writing by or
among the relevant Parties or permitted by this Agreement, the relevant Parties
shall keep, and shall cause the members of

 

45

 

their applicable Group to
keep, confidential all matters relating to and any negotiation, mediation,
conference, arbitration, discussion, or arbitration award pursuant to this
Article XIII shall be treated as compromise and settlement negotiations for
purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules;
provided, however, that such matters may be disclosed (i) to the
extent reasonably necessary in any proceeding brought to enforce the award or
for entry of a judgment upon the award and (ii) to the extent otherwise
required by Law or stock exchange. Nothing said or disclosed, nor any document
produced, in the course of any negotiations, conferences, and discussions that
is not otherwise independently discoverable shall be offered or received as
evidence or used for impeachment or for any other purpose in any current or
future arbitration. Nothing contained herein is intended to or shall be
construed to prevent any Party from applying to any court of competent
jurisdiction for interim measures or other provisional relief in connection
with the subject matter of any Disputes. Without prejudice to such provisional
remedies as may be available under the jurisdiction of a court, the arbitral
tribunal shall have full authority to grant provisional remedies and to direct
the Parties to request that any court modify or vacate any temporary or
preliminary relief issued by such court, and to award damages for the failure
of any party to respect the arbitral tribunal’s orders to that effect.

 

Section 13.7                                Continuity of Service and Performance. Unless otherwise agreed in writing, the
Parties will continue to provide service and honor all other commitments under
this Agreement and each Ancillary Agreement during the course of dispute
resolution pursuant to the provisions of this Article XIII with respect to all
matters not subject to such dispute resolution.

 

Section 13.8                                Costs. Except as otherwise may be provided in this Agreement, the costs of
any arbitration pursuant to this Article XIII shall be borne by the losing
Party or Parties in such proportion as the arbitrator or arbitrators determine
based on the facts and circumstances.

 

Section 13.9                                Consolidation. The arbitrators may consolidate an
arbitration under this Agreement with any arbitration arising under or relating
to the Ancillary Agreements or any other agreement between the Parties entered
into pursuant hereto, as the case may be, if the subject of the Disputes
thereunder arise out of or relate essentially to the same set of facts or
transactions. Such consolidated arbitration shall be determined by the arbitrator
appointed for the arbitration proceeding that was commenced first in time.

 

Section 13.10                          Exception to Arbitration. Notwithstanding anything in this Article
XIII to the contrary, in the event that the matters described on Schedule 13.10
have been fully and finally completed, including the exhaustion of all appeals,
if the Dispute has not been resolved for any reason after the Mediation Period,
such Dispute may be subject to litigation in accordance with Sections 14.15 and
14.17.

 

ARTICLE XIV

 

MISCELLANEOUS

 

Section 14.1                                Counterparts; Facsimile Signatures. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more such counterparts have been signed
by each of the Parties

 

46

 

and delivered to the other
Parties. For purposes of this Agreement, facsimile signatures shall be deemed
originals.

 

Section 14.2                                Survival. Except as otherwise contemplated by this Agreement or any Ancillary
Agreement, all covenants and agreements of the Parties contained in this
Agreement and each Ancillary Agreement shall survive the Distribution Date and
remain in full force and effect in accordance with their applicable terms; provided,
however, that all indemnification for Taxes shall survive until ninety
(90) days following the expiration of the applicable statute of limitations
(taking into account all extensions thereof), if any, of the Tax that gave rise
to the indemnification; provided, further, that, in the event
that notice for indemnification has been given within the applicable survival
period, such indemnification shall survive until such time as such claim is
finally resolved.

 

Section 14.3                                Notices. All notices, requests, claims, demands, and other communications
under this Agreement shall be in writing and shall be given or made (and shall
be deemed to have been duly given or made upon receipt) by delivery in person,
by overnight courier service, by facsimile with receipt confirmed (followed by
delivery of an original via overnight courier service), or by registered or
certified mail (postage prepaid, return receipt requested) to the respective
Parties at the following addresses (or at such other address for a Party as
shall be specified in a notice given in accordance with this Section 14.3):

 

To Tyco:

 

To Healthcare:

 

To Electronics:

 

Section 14.4                                Waivers. The failure of any Party to require strict performance by any other
Party of any provision in this Agreement will not waive or diminish that Party’s
right to demand strict performance thereafter of that or any other provision
hereof.

 

Section 14.5                                Amendments. Subject to the terms of Section 14.8 hereof, this Agreement may not
be modified or amended except by an agreement in writing signed by each of the
Parties.

 

Section 14.6                                Assignment. Except as otherwise provided for in this Agreement, this Agreement
shall not be assignable, in whole or in part, directly or indirectly, by any
Party without the prior written consent of the other Parties, and any attempt
to assign any rights or obligations arising under this Agreement without such
consent shall be void; provided, however, that a Party may assign
this Agreement in connection with a merger transaction in which such Party is
not the surviving entity or the sale by such Party of all or substantially all
of its Assets; provided, that the surviving entity of such merger or the
transferee of such Assets shall agree in writing, reasonably satisfactory to
the other Parties, to be bound by the terms of this Agreement as if named as a “Party”
hereto.

 

Section 14.7                                Successors and Assigns. The provisions of this Agreement and the
obligations and rights hereunder shall be binding upon, inure to the benefit of
and be enforceable by (and against) the Parties and their respective successors
and permitted transferees and assigns;

 

47

 

provided, however, that in no event shall a
Party’s right to vote on a matter set forth herein be construed to permit any
duplication of a Party’s vote by a successor, assignee, or other transferee.
The Parties acknowledge that it is their intention to permit no more than three
(3) parties to vote on any matter set forth herein.

 

Section 14.8                                Certain Termination and Amendment Rights. This Agreement (including indemnification
obligations hereunder) may be terminated and each Distribution may be amended,
modified or abandoned at any time prior to the Distribution Date by and in the
sole discretion of Tyco without the approval of Healthcare or Electronics or
the stockholders of Tyco. In the event of such termination, no Party shall have
any liability of any kind to any other Party or any other Person.

 

Section 14.9                                No Circumvention. The Parties agree not to directly or
indirectly take any actions, act in concert with any Person who takes an
action, or cause or allow any member of any such Party’s Group to take any
actions (including the failure to take a reasonable action) such that the
resulting effect is to materially undermine the effectiveness of any of the
provisions of this Agreement, the Separation and Distribution Agreement or any
other Ancillary Agreement (including adversely affecting the rights or ability
of any Party to successfully pursue indemnification or payment pursuant to the
provisions of this Agreement).

 

Section 14.10                          Subsidiaries. Each of the Parties shall cause to be
performed, and hereby guarantees the performance of, all actions, agreements
and obligations set forth herein to be performed by any Subsidiary of such
Party or by any entity that becomes a Subsidiary of such Party on and after the
Distribution Date.

 

Section 14.11                          Third Party Beneficiaries. This Agreement is solely for the benefit of
the Parties and should not be deemed to confer upon third parties any remedy,
claim, liability, reimbursement, claim of action or other right in excess of
those existing without reference to this Agreement.

 

Section 14.12                          Title and Headings. Titles and headings to sections herein are
inserted for the convenience of reference only and are not intended to be a
part of or to affect the meaning or interpretation of this Agreement.

 

Section 14.13                          Exhibits and Schedules. The Exhibits and Schedules shall be
construed with and as an integral part of this Agreement to the same extent as
if the same had been set forth verbatim herein.

 

Section 14.14                          Governing Law. This Agreement shall be governed by and
construed in accordance with the internal Laws, and not the Laws governing
conflicts of Laws (other than Sections 5-1401 and 5-1402 of the New York
General Obligations Law), of the State of New York.

 

Section 14.15                          Consent to Jurisdiction. Subject to the provisions of Article XIII,
each of the Parties irrevocably submits to the exclusive jurisdiction of (a)
the Supreme Court of the State of New York, New York County, and (b) the United
States District Court for the Southern District of New York (the “New York
Courts”), for the purposes of any suit, action, or other proceeding to compel
arbitration or for provisional relief in aid of arbitration in accordance with

 

48

 

Article XIII or to prevent
irreparable harm, and to the non-exclusive jurisdiction of the New York Courts
for the enforcement of any award issued there under. Each of the Parties
further agrees that service of any process, summons, notice, or document by
U.S. registered mail to such Party’s respective address set forth above shall
be effective service of process for any action, suit, or proceeding in the New
York Courts with respect to any matters to which it has submitted to
jurisdiction in this Section 14.15. Each of the Parties irrevocably and
unconditionally waives any objection to the laying of venue of any action,
suit, or proceeding arising out of this Agreement or the transactions
contemplated hereby in the New York Courts, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.

 

Section 14.16                          Specific Performance. The Parties agree that irreparable damage
would occur in the event that the provisions of this Agreement were not
performed in accordance with their specific terms. Accordingly, it is hereby
agreed that the Parties shall be entitled to an injunction or injunctions to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at Law or in equity.

 

Section 14.17                          Waiver of Jury Trial. EACH OF THE PARTIES HEREBY WAIVES TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT. EACH OF THE PARTIES HEREBY (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY 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 (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED
TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 14.17.

 

Section 14.18                          Force Majeure. No Party (or any Person acting on its
behalf) shall have any liability or responsibility for failure to fulfill any
obligation (other than a payment obligation) under this Agreement so long as
and to the extent to which the fulfillment of such obligation is prevented,
frustrated, hindered, or delayed as a consequence of circumstances of Force
Majeure (as defined in the Separation and Distribution Agreement). A Party
claiming the benefit of this provision shall, as soon as reasonably practicable
after the occurrence of any such event: 
(a) notify the other applicable Parties of the nature and extent of any
such Force Majeure condition and (b) use due diligence to remove any such
causes and resume performance under this Agreement as soon as feasible.

 

Section 14.19                          Construction. The Parties have participated jointly in
the negotiation and drafting of this Agreement. This Agreement shall be
construed without regard to any presumption or rule requiring construction or
interpretation against the party drafting or causing any instrument to be
drafted.

 

49

 

Section 14.20                          Changes in Law.

 

(a)                                  Any reference to a provision of the Code,
Treasury Regulations, or a Law of another jurisdiction shall include a
reference to any applicable successor provision or Law.

 

(b)                                 If, due to any change in applicable Law or
regulations or their interpretation by any court of Law or other governing body
having jurisdiction subsequent to the date hereof, performance of any provision
of this Agreement or any transaction contemplated hereby shall become
impracticable or impossible, the Parties hereto shall use their commercially
reasonable best efforts to find and employ an alternative means to achieve the
same or substantially the same result as that contemplated by such provision.

 

Section 14.21                          Authority. Each of the Parties hereto represents to each of the other Parties
that (a) it has the corporate power (corporate or otherwise) and authority to
execute, deliver and perform this Agreement, (b) the execution, delivery and
performance of this Agreement by it have been duly authorized by all necessary
corporate or other action, (c) it has duly and validly executed and delivered
this Agreement, and (d) this Agreement is a legal, valid, and binding
obligation, enforceable against it in accordance with its terms subject to
applicable bankruptcy, insolvency, reorganization, moratorium, or other similar
Laws affecting creditors’ rights generally and general equity principles.

 

Section 14.22                          Severability. If any provision of this Agreement or the
application of any such provision to any Person or circumstance shall be held
invalid, illegal, or unenforceable in any respect by a court of competent
jurisdiction, such invalidity, illegality, or unenforceability shall not affect
any other provision hereof. The Parties shall engage in good faith negotiations
to replace any provision which is declared invalid, illegal, or unenforceable
with a valid, legal, and enforceable provision, the economic effect of which
comes as close as possible to that of the invalid, illegal, or unenforceable
provision which it replaces.

 

Section 14.23                          Tax Sharing Agreements. All Tax sharing, indemnification and
similar agreements, written or unwritten, as between any of the Parties or
their respective Subsidiaries, on the one hand, and any other Party or its
respective Subsidiaries, on the other hand (other than this Agreement or in any
other Ancillary Agreement), shall be or shall have been terminated as of the
Distribution Date and, after the Distribution Date, none of such Parties (or
their Subsidiaries) to any such Tax sharing, indemnification or similar
agreement shall have any further rights or obligations under any such
agreement.

 

Section 14.24                          Exclusivity. Except as specifically set forth in the Separation and Distribution
Agreement or any other Ancillary Agreement, all matters related to Taxes or Tax
Returns of the Parties and their respective Subsidiaries shall be governed
exclusively by this Agreement. In the event of a conflict between this
Agreement, the Separation and Distribution Agreement or any Ancillary Agreement
with respect to such matters, this Agreement shall govern and control.

 

Section 14.25                          No Duplication; No Double Recovery. Nothing in this Agreement is intended to
confer to or impose upon any Party a duplicative right, entitlement,
obligation, or recovery with respect to any matter arising out of the same
facts and circumstances.

 

50

 

IN WITNESS WHEREOF, the
Parties hereto have caused this Agreement to be executed the day and year first
above written.

 

	
   

  	
  TYCO
  INTERNATIONAL LTD.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:
  

  
	
   

  	
  Title:
  

  
	
   

  	
   

  
	
   

  	
  COVIDIEN
  LTD.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:
  

  
	
   

  	
  Title:
  

  
	
   

  	
   

  
	
   

  	
  TYCO
  ELECTRONICS LTD.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:
  

  
	
   

  	
  Title:
  

  

 

51

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