Document:

Exhibit 10.1

FORM
OF

SEPARATION
AND DISTRIBUTION 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

  	
  General

  	
  2

  
	
   

  	
  Section 1.2

  	
  References;
  Interpretation

  	
  34

  
	
   

  	
  Section 1.3

  	
  Effective Time;
  Suspension

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  THE SEPARATION

  	
  35

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 2.1

  	
  General

  	
  35

  
	
   

  	
  Section 2.2

  	
  Transfer of
  Assets

  	
  35

  
	
   

  	
  Section 2.3

  	
  Assumption and
  Satisfaction of Liabilities

  	
  37

  
	
   

  	
  Section 2.4

  	
  Intercompany
  Accounts

  	
  37

  
	
   

  	
  Section 2.5

  	
  Limitation of
  Liability

  	
  38

  
	
   

  	
  Section 2.6

  	
  Transfers Not
  Effected On or Prior to the Effective Time; Transfers Deemed Effective as of
  the Effective Time

  	
  39

  
	
   

  	
  Section 2.7

  	
  Conveyancing and
  Assumption Instruments

  	
  41

  
	
   

  	
  Section 2.8

  	
  Further
  Assurances

  	
  41

  
	
   

  	
  Section 2.9

  	
  Novation of
  Liabilities

  	
  42

  
	
   

  	
  Section 2.10

  	
  Guarantees

  	
  43

  
	
   

  	
  Section 2.11

  	
  Disclaimer of
  Representations and Warranties

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  CERTAIN ACTIONS AT OR PRIOR TO THE DISTRIBUTIONS

  	
  45

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 3.1

  	
  Certificate of
  Incorporation; Bye-laws

  	
  45

  
	
   

  	
  Section 3.2

  	
  Directors

  	
  45

  
	
   

  	
  Section 3.3

  	
  Resignations

  	
  46

  
	
   

  	
  Section 3.4

  	
  [Reserved]

  	
  46

  
	
   

  	
  Section 3.5

  	
  Cash Adjustments

  	
  46

  
	
   

  	
  Section 3.6

  	
  Ancillary
  Agreements

  	
  49

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  THE DISTRIBUTIONS

  	
  49

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 4.1

  	
  Stock Dividends
  to Tyco

  	
  49

  
	
   

  	
  Section 4.2

  	
  Fractional
  Shares

  	
  50

  
	
   

  	
  Section 4.3

  	
  Actions in
  Connection with the Distribution

  	
  50

  
	
   

  	
  Section 4.4

  	
  Sole Discretion
  of Tyco

  	
  51

  
	
   

  	
  Section 4.5

  	
  Conditions to
  Distributions

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  CERTAIN COVENANTS

  	
  52

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 5.1

  	
  No Solicit; No
  Hire

  	
  52

  
	
   

  	
  Section 5.2

  	
  Corporate Names
  and Other Parties’ Trademarks

  	
  53

  
	
   

  	
  Section 5.3

  	
  Auditors and
  Audits; Annual and Quarterly Financial Statements and Accounting

  	
  54

  
	
   

  	
  Section 5.4

  	
  Certain
  Securities

  	
  56

  
	
   

  	
  Section 5.5

  	
  Administration
  of Specified Shared Expenses

  	
  56

  
						

 

-i-

 

	
   

  	
  Section 5.6

  	
  Cooperation

  	
  56

  
	
   

  	
  Section 5.7

  	
  Periodic
  Meetings

  	
  57

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  EMPLOYEE MATTERS

  	
  57

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 6.1

  	
  Stock Options

  	
  57

  
	
   

  	
  Section 6.2

  	
  Restricted
  Stock, Restricted Stock Units, Performance Share Units and Deferred Stock
  Units

  	
  61

  
	
   

  	
  Section 6.3

  	
  Employee Stock
  Purchase Plan

  	
  64

  
	
   

  	
  Section 6.4

  	
  Nonqualified
  Deferred Compensation Plans

  	
  64

  
	
   

  	
  Section 6.5

  	
  Pension Plans

  	
  66

  
	
   

  	
  Section 6.6

  	
  Retirement Savings
  Plans

  	
  70

  
	
   

  	
  Section 6.7

  	
  Retiree Medical
  Benefits

  	
  73

  
	
   

  	
  Section 6.8

  	
  Health, Welfare
  and Fringe Benefit Plans

  	
  73

  
	
   

  	
  Section 6.9

  	
  Cooperation and
  Administrative Provisions

  	
  77

  
	
   

  	
  Section 6.10

  	
  Approval of
  Plans; Terms of Participation by Employees in Plans

  	
  80

  
	
   

  	
  Section 6.11

  	
  Tax Consequences

  	
  81

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  TYCO CONTINGENT ASSETS AND ASSUMED TYCO CONTINGENT LIABILITIES

  	
  81

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 7.1

  	
  Tyco Contingent
  Assets and Assumed Tyco Contingent Liabilities

  	
  81

  
	
   

  	
  Section 7.2

  	
  Management of
  Tyco Contingent Assets and Assumed Tyco Contingent Liabilities.

  	
  82

  
	
   

  	
  Section 7.3

  	
  Access to
  Information; Certain Services; Expenses

  	
  84

  
	
   

  	
  Section 7.4

  	
  Notice Relating
  to Tyco Contingent Assets and Assumed Tyco Contingent Liabilities; Disputes

  	
  85

  
	
   

  	
  Section 7.5

  	
  Cooperation with
  Governmental Entity

  	
  85

  
	
   

  	
  Section 7.6

  	
  Default

  	
  85

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  INDEMNIFICATION

  	
  86

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 8.1

  	
  Release of
  Pre-Distribution Claims

  	
  86

  
	
   

  	
  Section 8.2

  	
  Indemnification
  by Tyco

  	
  88

  
	
   

  	
  Section 8.3

  	
  Indemnification
  by Healthcare

  	
  88

  
	
   

  	
  Section 8.4

  	
  Indemnification
  by Electronics

  	
  88

  
	
   

  	
  Section 8.5

  	
  Procedures for
  Indemnification

  	
  89

  
	
   

  	
  Section 8.6

  	
  Cooperation In
  Defense And Settlement

  	
  91

  
	
   

  	
  Section 8.7

  	
  Indemnification
  Payments

  	
  91

  
	
   

  	
  Section 8.8

  	
  Contribution

  	
  91

  
	
   

  	
  Section 8.9

  	
  Indemnification
  Obligations Net of Insurance Proceeds and Other Amounts

  	
  92

  
	
   

  	
  Section 8.10

  	
  Additional
  Matters; Survival of Indemnities

  	
  92

  
	
   

  	
   

  	
   

  	
   

  
					

 

-ii-

 

	
  ARTICLE IX

  	
  CONFIDENTIALITY; ACCESS TO INFORMATION

  	
  93

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 9.1

  	
  Provision of
  Corporate Records

  	
  93

  
	
   

  	
  Section 9.2

  	
  Access to
  Information

  	
  94

  
	
   

  	
  Section 9.3

  	
  Witness Services

  	
  94

  
	
   

  	
  Section 9.4

  	
  Reimbursement;
  Other Matters

  	
  94

  
	
   

  	
  Section 9.5

  	
  Confidentiality

  	
  95

  
	
   

  	
  Section 9.6

  	
  Privileged
  Matters

  	
  96

  
	
   

  	
  Section 9.7

  	
  Ownership of
  Information

  	
  98

  
	
   

  	
  Section 9.8

  	
  Other Agreements

  	
  98

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  DISPUTE RESOLUTION

  	
  98

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 10.1

  	
  Negotiation

  	
  98

  
	
   

  	
  Section 10.2

  	
  Mediation

  	
  99

  
	
   

  	
  Section 10.3

  	
  Arbitration

  	
  99

  
	
   

  	
  Section 10.4

  	
  Arbitration with
  Respect to Monetary Damages

  	
  100

  
	
   

  	
  Section 10.5

  	
  Arbitration
  Period

  	
  100

  
	
   

  	
  Section 10.6

  	
  Treatment of
  Negotiations, Mediation and Arbitration

  	
  100

  
	
   

  	
  Section 10.7

  	
  Continuity of
  Service and Performance

  	
  100

  
	
   

  	
  Section 10.8

  	
  Consolidation

  	
  101

  
	
   

  	
  Section 10.9

  	
  Exception to
  Arbitration

  	
  101

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  INSURANCE

  	
  101

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 11.1

  	
  Policies and
  Rights Included Within Assets

  	
  101

  
	
   

  	
  Section 11.2

  	
  Claims Made Tail
  Policies

  	
  102

  
	
   

  	
  Section 11.3

  	
  Occurrence Based
  Policies

  	
  104

  
	
   

  	
  Section 11.4

  	
  Administration;
  Other Matters

  	
  104

  
	
   

  	
  Section 11.5

  	
  Agreement for
  Waiver of Conflict and Shared Defense

  	
  106

  
	
   

  	
  Section 11.6

  	
  Cooperation

  	
  106

  
	
   

  	
  Section 11.7

  	
  Certain Matters
  Relating to Tyco’s Organizational Documents

  	
  106

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
  MISCELLANEOUS

  	
  106

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 12.1

  	
  Complete
  Agreement; Construction

  	
  106

  
	
   

  	
  Section 12.2

  	
  Ancillary
  Agreements

  	
  107

  
	
   

  	
  Section 12.3

  	
  Counterparts

  	
  107

  
	
   

  	
  Section 12.4

  	
  Survival of
  Agreements

  	
  107

  
	
   

  	
  Section 12.5

  	
  Expenses

  	
  107

  
	
   

  	
  Section 12.6

  	
  Notices

  	
  107

  
	
   

  	
  Section 12.7

  	
  Waivers and
  Consents

  	
  108

  
	
   

  	
  Section 12.8

  	
  Amendments

  	
  108

  
	
   

  	
  Section 12.9

  	
  Assignment

  	
  108

  
	
   

  	
  Section 12.10

  	
  Successors and
  Assigns

  	
  109

  
	
   

  	
  Section 12.11

  	
  Certain
  Termination and Amendment Rights

  	
  109

  
					

 

-iii-

 

	
   

  	
  Section 12.12

  	
  Payment Terms

  	
  109

  
	
   

  	
  Section 12.13

  	
  No Circumvention

  	
  109

  
	
   

  	
  Section 12.14

  	
  Subsidiaries

  	
  110

  
	
   

  	
  Section 12.15

  	
  Third Party
  Beneficiaries

  	
  110

  
	
   

  	
  Section 12.16

  	
  Title and
  Headings

  	
  110

  
	
   

  	
  Section 12.17

  	
  Exhibits and
  Schedules

  	
  110

  
	
   

  	
  Section 12.18

  	
  Governing Law

  	
  110

  
	
   

  	
  Section 12.19

  	
  Consent to
  Jurisdiction

  	
  110

  
	
   

  	
  Section 12.20

  	
  Specific
  Performance

  	
  111

  
	
   

  	
  Section 12.21

  	
  Waiver of Jury
  Trial

  	
  111

  
	
   

  	
  Section 12.22

  	
  Severability

  	
  111

  
	
   

  	
  Section 12.23

  	
  Force Majeure

  	
  111

  
	
   

  	
  Section 12.24

  	
  Interpretation

  	
  111

  
	
   

  	
  Section 12.25

  	
  No Duplication;
  No Double Recovery

  	
  111

  

 

-iv-

 

	
  List of Schedules

  	
   

  
	
   

  	
   

  
	
  Schedule
  1.1(15)(1)

  	
  Assumed
  Tyco Contingent Liabilities

  
	
  Schedule
  1.1(28)

  	
  Continuing
  Arrangements

  
	
  Schedule
  1.1(34)

  	
  Delayed
  Transfer Employees

  
	
  Schedule
  1.1(49)(vi)

  	
  Electronics
  Assets

  
	
  Schedule
  1.1(65)

  	
  Electronics
  Group

  
	
  Schedule
  1.1(68)(i)

  	
  Electronics
  Liabilities

  
	
  Schedule
  1.1(68)(iii)

  	
  Electronics
  Assumed Divested Business Liabilities

  
	
  Schedule
  1.1(86)(A) & (B)

  	
  (A)
  Members of the Electronics Group whose former employees are not Former
  Electronics Employees; (B) Members of the Healthcare Group or Tyco Group
  whose former employees shall be treated as Former Electronics Employees

  
	
  Schedule
  1.1(87)(A) & (B)

  	
  (A)
  Members of the Healthcare Group whose former employees are not Former
  Healthcare Employees; (B) Members of the Electronics Group or Tyco Group
  whose former employees shall be treated as Former Healthcare Employees

  
	
  Schedule
  1.1(88)(A) & (B)

  	
  (A)
  Members of the Tyco Group whose former employees are not Former Tyco
  Employees; (B) Members of the Electronics Group or Healthcare Group whose
  former employees shall be treated as Former Tyco Employees

  
	
  Schedule
  1.1(97)(vi)

  	
  Healthcare
  Assets

  
	
  Schedule
  1.1(113)

  	
  Healthcare
  Group

  
	
  Schedule
  1.1(116)(i)

  	
  Healthcare
  Liabilities

  
	
  Schedule
  1.1(116)(iii)(B)

  	
  Healthcare
  Assumed Divested Business Liabilities

  
	
  Schedule
  1.1(177)

  	
  Specified
  Shared Expenses

  
	
  Schedule
  1.1(191)

  	
  Tyco
  Contingent Assets

  
	
  Schedule
  1.1(190)

  	
  Tyco
  Deferred Compensation Plans

  
	
  Schedule
  1.1(192)

  	
  Employees
  to Transfer to Tyco Post-Distribution

  
	
  Schedule
  1.1(196)

  	
  Tyco
  Equity Plans

  
	
  Schedule
  1.1(197)

  	
  Tyco
  Group

  
	
  Schedule
  1.1(203)(vi)

  	
  Tyco
  Retained Assets

  
	
  Schedule
  1.1(206)(i)

  	
  Tyco
  Retained Liabilities

  
	
  Schedule
  1.1(206)(iii)(B)

  	
  Tyco
  Assumed Divested Business Liabilities

  
	
  Schedule
  2.2(c)

  	
  Shared
  Contracts

  
	
  Schedule
  2.5

  	
  Tyco
  Retained Contracts

  
	
  Schedule
  2.10(a)

  	
  Guarantees
  Not Removed

  
	
  Schedule
  2.10(a)(i)

  	
  Tyco
  Removal of Guarantees

  
	
  Schedule
  2.10(a)(ii)

  	
  Healthcare
  Removal of Guarantees

  
	
  Schedule
  2.10(a)(iii)

  	
  Electronics
  Removal of Guarantees

  
	
  Schedule
  3.4

  	
  Borrowings

  
	
  Schedule
  3.5

  	
  Determination
  of Free Cash Flow

  
	
  Schedule
  6.1(d)

  	
  Tyco
  Corporate Employees

  
	
  Schedule
  6.4(a)

  	
  Healthcare
  Nonqualified Deferred Compensation Plans

  
	
  Schedule
  6.4(b)

  	
  Electronics
  Nonqualified Deferred Compensation Plans

  
	
  Schedule
  6.4(c)

  	
  Tyco
  Nonqualified Deferred Compensation Plans

  

 

-v-

 

	
  Schedule
  6.5(a)

  	
  Healthcare
  Pension Plans

  
	
  Schedule
  6.5(b)

  	
  Electronics
  Pension Plans

  
	
  Schedule
  6.5(c)

  	
  Tyco
  Retained Pension Plans

  
	
  Schedule
  6.5(d)

  	
  Pension
  Asset Transfer Assumptions

  
	
  Schedule
  6.6(a)

  	
  Healthcare
  Savings Plans

  
	
  Schedule
  6.6(b)

  	
  Electronics
  Savings Plans

  
	
  Schedule
  6.6(c)

  	
  Tyco
  Retained Savings Plans

  
	
  Schedule
  6.7(a)

  	
  Tyco
  Retiree Medical Plans

  
	
  Schedule
  6.7(b)

  	
  Healthcare
  Retiree Medical Plans

  
	
  Schedule
  6.7(c)

  	
  Electronics
  Retiree Medical Plans

  
	
  Schedule
  6.9(c)

  	
  Employees
  on International Assignment

  
	
  Schedule
  6.10(c)

  	
  Service
  Credit Under Employee Benefit Plans

  
	
  Schedule
  10.9

  	
  Exception
  to Arbitration

  
	
  Schedule
  12.5

  	
  Separation
  Expenses

  
	
   

  	
   

  
	
  List
  of Exhibits

  	
   

  
	
   

  	
   

  
	
  Exhibit
  A

  	
  [Reserved]

  
	
  Exhibit
  B

  	
  Joint
  Defense Agreement

  
	
  Exhibit
  C

  	
  Joint
  Venture Agreement

  
	
  Exhibit
  D

  	
  Tax
  Sharing Agreement

  

 

-vi-

 

SEPARATION
AND DISTRIBUTION AGREEMENT

SEPARATION AND DISTRIBUTION
AGREEMENT (this “Agreement”), dated as of           , 2007, by and among Tyco
International Ltd., a Bermuda corporation (“Tyco”), Covidien Ltd., a Bermuda
corporation (formerly known as Tyco Healthcare Ltd.) (“Healthcare”), and
Tyco 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”.

W I T
N E S S E T H:

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, each of Tyco, Healthcare
and Electronics has determined that it is necessary and desirable, on or prior
to the Effective Time (as defined herein), to allocate and transfer to the
applicable Party or its Subsidiaries those Assets, and to allocate and assign
to the applicable Party or its Subsidiaries responsibility for those
Liabilities, in respect of the activities of the applicable Businesses of such
entities and those Assets and Liabilities in respect of other businesses and
activities of Tyco and its current and former Subsidiaries;

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, qualifies 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 the Healthcare Common Stock and
the Electronics Common Stock to the stockholders of Tyco will qualify as
tax-free under Section355(a) of the Code to such stockholders, and as tax-free
to Tyco under Section 361(c) of the Code;

WHEREAS, each of Tyco, Healthcare
and Electronics has determined that it is necessary and desirable to set forth
the principal corporate transactions required to effect the Plan of Separation
and each Distribution and to set forth other agreements that will govern
certain other matters following the Effective Time.

NOW, THEREFORE, in
consideration of the foregoing and the mutual agreements, provisions and
covenants contained in this Agreement, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

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

(1)           “AAA” shall have the meaning
set forth in Section 10.2.

(2)           “Accountant” shall have the
meaning set forth in Section 3.5.

(3)           “Action” shall mean any
demand, action, claim, suit, countersuit, arbitration, inquiry, subpoena,
proceeding or investigation by or before any court or grand jury, any
Governmental Entity or any arbitration or mediation tribunal.

(4)           “Affiliate” shall mean, when
used with respect to a specified Person, a Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with such specified Person. 
For the purposes of this definition, “control”, when used with respect
to any specified Person shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities or other
interests, by Contract or otherwise.  It
is expressly agreed that no Party or member of any Group shall be deemed to be
an Affiliate of another Party or member of such other Party’s Group by reason
of having one or more directors in common.

(5)           “Agent” shall mean Mellon
Investor Services.

(6)           “Agreement Disputes” shall
have the meaning set forth in Section 10.1.

(7)           “Ancillary Agreements” shall
mean all of the written Contracts, instruments, assignments or other
arrangements (other than this Agreement) entered into in connection with the
transactions contemplated hereby, including the Conveyancing

 

-2-

 

and Assumption
Instruments, the Tax Sharing Agreement, the Joint Defense Agreement and the Joint
Venture Agreement.

(8)           “Annual Reports” shall have
the meaning set forth in Section 5.3(d).

(9)           “Applicable Electronics Percentage”
shall mean thirty-one percent (31%).

(10)         “Applicable Healthcare Percentage”
shall mean forty-two percent (42%).

(11)          “Applicable Percentage” shall
mean (i) as to Tyco, the Applicable Tyco Percentage, (ii) as to Electronics,
the Applicable Electronics Percentage and (iii) as to Healthcare, the
Applicable Healthcare Percentage.

(12)         “Applicable Tyco Percentage”
shall mean twenty-seven percent (27%).

(13)         “Assets” shall mean assets,
properties, claims and rights (including goodwill), wherever located (including
in the possession of vendors or other third parties or elsewhere), of every
kind, character and description, whether real, personal or mixed, tangible,
intangible or contingent, in each case whether or not recorded or reflected or
required to be recorded or reflected on the Records or financial statements of
any Person, including the following:

(i)            all accounting and other legal and
business books, records, ledgers and files whether printed, electronic or
written;

(ii)           all apparatuses, computers and other
electronic data processing and communications equipment, fixtures, machinery,
equipment, furniture, office equipment, automobiles, trucks, aircraft and other
transportation equipment, special and general tools, test devices, prototypes
and models and other tangible personal property;

(iii)          all inventories of products, goods,
materials, parts, raw materials and supplies;

(iv)          all interests in real property of
whatever nature, including easements, whether as owner, mortgagee or holder of
a Security Interest in real property, lessor, sublessor, lessee, sublessee or
otherwise;

(v)           all interests in any capital stock or
other equity interests of any Subsidiary or any other Person, all bonds, notes,
debentures or other securities issued by any Subsidiary or any other Person,
all loans, advances or other extensions of credit or capital contributions to
any Subsidiary or any other Person and all other investments in securities of
any Person;

(vi)          all license Contracts, leases of
personal property, open purchase orders for raw materials, supplies, parts or
services, unfilled orders for the manufacture and sale of products and other
Contracts or commitments;

 

-3-

 

(vii)         all deposits, letters of credit and
performance and surety bonds;

(viii)        all written (including in electronic
form) technical information, data, specifications, research and development
information, engineering drawings and specifications, operating and maintenance
manuals, and materials and analyses prepared by consultants and other third
parties;

(ix)           all Intellectual Property;

(x)            all Software;

(xi)           all cost information, sales and
pricing data, customer prospect lists, supplier records, customer and supplier
lists, customer and vendor data, correspondence and lists, product data and
literature, artwork, design, development and business process files and data,
vendor and customer drawings, specifications, quality records and reports and
other books, records, studies, surveys, reports, plans and documents;

(xii)          all prepaid expenses, trade accounts
and other accounts and notes receivables;

(xiii)         all rights under Contracts, all claims
or rights against any Person, choses in action or similar rights, whether
accrued or contingent;

(xiv)        all rights under insurance policies and
all rights in the nature of insurance, indemnification or contribution;

(xv)         all licenses, permits, approvals and
authorizations which have been issued by any Governmental Entity;

(xvi)        all cash or cash equivalents, bank
accounts, lock boxes and other third-party deposit arrangements; and

(xvii)       all interest rate, currency, commodity or
other swap, collar, cap or other hedging or similar Contracts or arrangements.

(14)         “Assume” shall have the meaning
set forth in Section 2.3.

(15)         “Assumed Tyco Contingent Liabilities”
shall mean any of the Liabilities set forth on Schedule 1.1(15).

(16)          “Audited Party” shall have the
meaning set forth in Section 5.3(b).

(17)         “Business” shall mean the Tyco
Retained Business, the Healthcare Business or the Electronics Business, as
applicable.

 

-4-

 

(18)         “Business Day” means any day
that is not a Saturday, a Sunday or any other day on which banks are required
or authorized by Law to be closed in The City of New York.

(19)         “Business Entity” shall mean any
corporation, partnership, limited liability company, joint venture or other
entity which may legally hold title to Assets.

(20)         “Claims Administration” shall
mean the processing of claims made under the Shared Policies, including the reporting
of claims to the insurance carriers, management and defense of claims and
providing for appropriate releases upon settlement of claims.

(21)           “Closing
Tyco Stock Price” shall have the meaning set forth in Section 6.1(a)(ii).

(22)         “COBRA” means the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended.

(23)         “Code” shall have the meaning
set forth in the preamble.

(24)         “Commission” shall mean the
United States Securities and Exchange Commission.

(25)         “Confidential Information” shall
mean Confidential Business Information and Confidential Operational Information
concerning a Party and/or its Subsidiaries which, prior to or following the
Effective Time, has been disclosed by a Party or its Subsidiaries to another
Party or its Subsidiaries, in written, oral (including by recording),
electronic, or visual form to, or otherwise has come into the possession of,
the other, including pursuant to the access provisions of Section 9.1
or Section 9.2 or any other provision of this Agreement (except to
the extent that such information can be shown to have been (i) in the public
domain through no fault of such Party or its Subsidiaries or (ii) lawfully
acquired by such Party or its Subsidiaries from other sources; provided,
however, in the case of clause (ii) that, to the furnished Party’s
knowledge, such furnishing sources did not provide such information in breach
of any confidentiality obligations).

(26)         “Confidential Business Information”
shall mean all Information, data or material other than Confidential
Operational Information, including (i) earnings reports and forecasts, (ii)
macro-economic reports and forecasts, (iii) business plans, (iv) general market
evaluations and surveys and (v) financing and credit-related information.

(27)         “Confidential Operational
Information” shall mean all operational Information, data or material
including (i) specifications, ideas and concepts for products and services,
(ii) quality assurance policies, procedures and specifications, (iii) customer
information, (iv) Software, (v) training materials and information and (vi) all
other know-how, methodology, procedures, techniques and trade secrets related
to design, development and operational processes.

 

-5-

 

(28)         “Continuing Arrangements” shall
mean those arrangements set forth on Schedule 1.1(28) and such other
commercial arrangements among the Parties that are intended to survive and
continue following the applicable Relevant Time; provided, however,
that for the avoidance of doubt, Continuing Arrangements shall not apply to any
of the following Contracts, arrangements, course of dealings or understandings
(or to any of the provisions thereof):

(i)            any agreements, arrangements,
commitments or understandings to which any Person other than the Parties and
their respective Groups is a party hereto (it being understood that to the
extent that the rights and obligations of the Parties and the members of their
respective Groups under any such Contracts constitute Healthcare Assets or
Healthcare Liabilities, Electronics Assets or Electronics Liabilities or Tyco
Retained Assets or Tyco Retained Liabilities, such Contracts shall be assigned
or retained pursuant to Article II); and

(ii)           any agreements, arrangements,
commitments or understandings to which any non-wholly-owned Subsidiary of Tyco,
Healthcare or Electronics, as the case may be, is a Party.

(29)         “Contract” shall mean any
agreement, contract, obligation, indenture, instrument, lease, promise,
arrangement, warranty, commitment or undertaking (whether written or oral and
whether express or implied).

(30)         “Conveyancing and Assumption
Instruments” shall mean, collectively, the various Contracts and other
documents heretofore entered into and to be entered into to effect the Transfer
of Assets and the Assumption of Liabilities in the manner contemplated by this
Agreement and the Plan of Separation, or otherwise relating to, arising out of
or resulting from the transactions contemplated by this Agreement, in such form
or forms as the applicable Parties thereto agree.

(31)         “Consents” shall mean any
consents, waivers or approvals from, or notification requirements to, any
Person other than a Governmental Entity.

(32)         “D&O Tail Policies” shall
have the meaning set forth in Section 11.2(a).

(33)         “Deferred Stock Unit” (a) when
immediately preceded by “Tyco,” shall mean a unit granted by Tyco pursuant to
one of the Tyco Equity Plans representing a general unsecured promise by Tyco
to deliver a share of Tyco Common Stock; (b) when immediately preceded by “Healthcare”
shall mean a unit granted by Healthcare representing a general unsecured
promise by Healthcare to deliver a share of Healthcare Common Stock, which unit
is granted pursuant to the Healthcare Director Deferred Compensation Plan as
part of the adjustment to Tyco Deferred Stock Units in connection with the
Healthcare Distribution; and (c) when immediately preceded by “Electronics”
shall mean a unit granted by Electronics representing a general unsecured
promise by Electronics to deliver a share of Electronics Common Stock, which
unit is granted pursuant to the Electronics Director Deferred Compensation Plan
as part of the adjustment to Tyco Deferred Stock Units in connection with the
Electronics Distribution.

 

-6-

 

(34)           “Delayed
Transfer Employees” shall mean those employees set forth in Schedule
1.1(34) (which Schedule 1.1(34) may be amended in writing by
agreement of the applicable Parties) who will transfer from one Party to
another Party as described in Schedule 1.1(34) between the Distribution
Date and December 31, 2007 (or such later date as mutually agreed to by the
applicable Parties.)

(35)         “Delivering Party” shall have
the meaning set forth in Section 3.5.

(36)         “Determination Date” shall mean
the earlier of (i) 12:01 a.m., Eastern Standard Time, on the Final Separation
Date or (ii) 11:59 p.m., Eastern Standard Time, September 30, 2007.

(37)         “Direct Transfer”  shall mean a Healthcare Employee, Electronics
Employee or Tyco Employee’s direct transfer of employment (without
interruption) to another Party (or its subsidiary) between the Distribution
Date and December 31, 2007.

(38)         “Disability Plan” when
immediately preceded by “Tyco,” shall mean any short-term disability program
and long-term disability program sponsored by Tyco, (ii) when immediately
preceded by “Healthcare,” shall mean the short-term disability program and
long-term disability program to be established by Healthcare under Section
6.8(d); and (iii) when immediately preceded by “Electronics,” shall mean
the short-term disability program and long-term disability program to be
established by Electronics under Section 6.8(d).

(39)         “Disclosure Documents” shall
mean any registration statement (including any registration statement on Form
10) filed with the Commission by or on behalf of any Party or any of its
controlled Affiliates, and also includes any information statement, prospectus,
offering memorandum, offering circular (including franchise offering circular
or any similar disclosure statement) or similar disclosure document, whether or
not filed with the Commission or any other Governmental Entity, which offers
for sale or registers the Transfer or distribution of any security of such
Party or any of its controlled Affiliates.

(40)         “Dispute Notice” shall have the
meaning set forth in Section 10.1.

(41)         “Disputed Item” shall have the
meaning set forth in Section 3.5.

(42)         “Distribution Date” shall mean
(i) with respect to Healthcare, the Healthcare Distribution Date and (ii) with
respect to Electronics, the Electronics Distribution Date.

(43)         “Distribution Electronics Stock
Price” shall have the meaning set forth in Section 6.1(b)(ii).

(44)         “Distribution Healthcare Stock Price”
shall have the meaning set forth in Section 6.1(a)(ii).

 

-7-

 

(45)         “Distribution Regular Tyco Stock
Price” shall have the meaning set forth in Section 6.1(a)(ii).

(46)         “Distributions” shall mean,
collectively, the Healthcare Distribution and the Electronics Distribution.

(47)         “Effective Time” shall mean
12:01 a.m., Eastern Standard Time, on the earlier to occur of the Electronics Distribution
Date and the Healthcare Distribution Date.

(48)         “Electronics” shall have the
meaning set forth in the preamble.

(49)         “Electronics Assets” shall mean:

(i)            the ownership interests in those
Business Entities that are included in the definition of Electronics Group
including those Business Entities set forth on Schedule 1.1(65) in the
definition of Electronics Group;

(ii)           all Electronics Contracts, any rights
or claims arising thereunder, and any other rights or claims or contingent
rights or claims primarily relating to or arising from any Electronics Asset or
the Electronics Business;

(iii)          any and all Assets reflected on the Electronics
Balance Sheet or the accounting records supporting such balance sheet and any
Assets acquired by or for Electronics or any member of the Electronics Group
subsequent to the date of such balance sheet which, had they been so acquired
on or before such date and owned as of such date, would have been reflected on
such balance sheet if prepared on a consistent basis, subject to any
dispositions of any of such Assets subsequent to the date of such balance
sheet;

(iv)          subject to Article XI, any rights
of any member of the Electronics Group under any Policies, including any rights
thereunder arising after the Electronics Distribution Date in respect of any
Policies that are occurrence policies;

(v)           any and all Assets owned or held
immediately prior to the Relevant Time by Tyco or any of its Subsidiaries
(including, prior to their applicable Distribution Date, Healthcare or any of its
respective Subsidiaries) primarily relating to or used in the Electronics
Business.  The intention of this clause
(v) is only to rectify any inadvertent omission of Transfer of any Asset that,
had the Parties given specific consideration to such Asset as of the date
hereof, would have otherwise been classified as an Electronics Asset.  No Asset shall be deemed an Electronics Asset
solely as a result of this clause (v) unless a claim with respect thereto is
made by Electronics within the applicable time period(s) established by Section 2.6(d);

(vi)          the Assets set forth on Schedule
1.1(49)(vi) and any and all Assets that are expressly contemplated by this
Agreement or any Ancillary Agreement as

 

-8-

 

Assets which have been or
are to be Transferred to Electronics or any other member of the Electronics
Group;

(vii)         any and all furnishings and office
equipment located at a physical site of which the ownership or leasehold
interest is being Transferred to Electronics; provided, that personal
computers shall be Transferred to the Party who, following the Relevant Time,
employs the applicable employee who, prior to the Relevant Time, used such
personal computer; and

(viii)        the Applicable Electronics Percentage of
any Tyco Contingent Asset.

Notwithstanding the
foregoing, the Electronics Assets shall not include any Assets that are expressly
contemplated by this Agreement or any Ancillary Agreement (or the Schedules
hereto or thereto) as Assets to be retained by or Transferred to any member of
the Tyco Group, or Healthcare Group, as the case may be.

In the event of any
inconsistency or conflict which may arise in the application or interpretation
of any of the foregoing provisions, for the purpose of determining what is and
is not a Electronics Asset, any item explicitly included on a Schedule referred
to in this definition shall take priority over any provision of the text
hereof, and clause (v) shall take priority over clause (iii) of this Section
1.1(49) and over clause (iii) of Section 1.1(97) in the definition
of Healthcare Assets and Section 1.1(203) in the definition of Tyco
Retained Assets.

(50)         “Electronics Balance Sheet”
shall mean the combined balance sheet of the Electronics Group, including the
notes thereto, as of September 29, 2006, as filed with the Electronics Form 10.

(51)         “Electronics Business” shall
mean (i) the business and operations of the Electronics segment of Tyco as each
is described in Electronics’ Form 10, (ii) any other business conducted
primarily through the use of the Electronics Assets prior to the Relevant Time
and (iii) the businesses and operations of Business Entities acquired or
established by or for Electronics or any of its Subsidiaries after the date of
this Agreement.

(52)         “Electronics Cash Balance” shall
have the meaning set forth in Section 3.5.

(53)         “Electronics Common Stock” shall
have the meaning set forth in the recitals hereto.

(54)         “Electronics Contracts” shall
mean the following Contracts to which Tyco or any of its Affiliates is a party
or by which it or any of its Affiliates or any of their respective Assets is
bound, whether or not in writing, except for any such Contract or part thereof
(i) that is expressly contemplated not to be Transferred by any member of the
Tyco Group or the

 

-9-

 

Healthcare Group to the Electronics
Group or (ii) that is expressly contemplated to be Transferred to (or remain
with) any member of the Tyco Group or the Healthcare Group, in each case,
pursuant to any provision of this Agreement or any Ancillary Agreement:

(i)            any Contract entered into in the
name of, or expressly on behalf of, any division, business unit or member of
the Electronics Group;

(ii)           any Contract that relates primarily
to the Electronics Business;

(iii)          any Contract representing capital or
operating equipment lease obligations reflected on the Electronics Balance
Sheet;

(iv)          any Contract or part thereof, that is
otherwise expressly contemplated pursuant to this Agreement (including pursuant
to Section 2.2(c)) or any of the Ancillary Agreements to be
assigned to any member of the Electronics Group; and

(v)           any guarantee, indemnity,
representation or warranty of or in favor of any member of the Electronics
Group.

(55)         “Electronics Credit Facilities”
shall mean the credit facilities and related contracts to be entered into by
one or more members of the Electronics Group on or prior to the Electronics
Distribution Date in connection with the Plan of Separation.

(56)         “Electronics
Deferred Compensation Liabilities” shall have the meaning set forth in Section 6.4(b)(i).

(57)         “Electronics
Deferred Compensation Plans” shall mean the nonqualified deferred
compensation plans listed in Schedule 6.4(b) and any other legacy
nonqualified deferred compensation plan sponsored by members of the Electronics
Group.

(58)         “Electronics Director Deferred
Compensation Plan” shall mean the 2007 Tyco Electronics Ltd. Director
Deferred Compensation Plan adopted by Electronics to provide for non-employee
director nonqualified deferred compensation.

(59)          “Electronics Distribution”
shall mean the distribution on the Electronics Distribution Date to holders of
record of shares of Tyco Common Stock as of the Electronics Distribution Record
Date of the Electronics Common Stock owned by Tyco on the basis of one share of
Electronics Common Stock for every       outstanding shares of Tyco Common Stock.

(60)         “Electronics Distribution Date”
shall mean the date on which Tyco distributes all of the issued and outstanding
shares of Electronics Common Stock to the holders of Tyco Common Stock.

(61)         “Electronics Distribution Date FCF”
shall have the meaning set forth in Section 3.5.

 

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(62)         “Electronics Distribution Record
Date” shall mean such date as may be determined by Tyco’s Board of
Directors as the record date for the Electronics Distribution.

(63)         “Electronics Employee” shall
mean an active employee or an employee on vacation or on approved leave of
absence (including qualified military service under the Uniformed Services
Employment and Reemployment Rights Act of 1994, and leave under the Family
Medical Leave Act and other approved leaves) who (i) immediately following
the Electronics Distribution Date is employed by Electronics or any member of
the Electronics Group, or (ii) any Delayed Transfer Employee identified on
Schedule 1.1(34) who will be employed by Electronics or any member of
the Electronics Group.  Electronics
Employee shall also include any employee of an entity in the Electronics Group
who, as of the Electronics Distribution Date, is receiving short-term or long-term
disability benefits or workers’ compensation benefits.

(64)         “Electronics Form 10” shall mean
the registration statement on Form 10 filed by Electronics with the Commission
in connection with the Electronics Distribution.

(65)         “Electronics Group” shall mean
Electronics and each Person (other than any member of the Healthcare Group or
the Tyco Group) that is a direct or indirect Subsidiary of Electronics
immediately after the Effective Time, and each Person that becomes a Subsidiary
of Electronics after the Effective Time, which shall include those entities
identified as such on Schedule 1.1(65).

(66)         “Electronics Indemnitees” shall
mean each member of the Electronics Group and each of their Affiliates and each
member of the Electronics Group and their respective Affiliates’ respective
directors, officers, employees and agents and each of the heirs, executors,
successors and assigns of any of the foregoing.

(67)         “Electronics Information Statement”
shall mean the Information Statement attached as an exhibit to the Electronics
Form 10 sent to the holders of shares of Tyco Common Stock in connection with
the Electronics Distribution, including any amendment or supplement thereto.

(68)         “Electronics Liabilities” shall
mean:

(i)            any and all Liabilities that are
expressly contemplated by this Agreement or any Ancillary Agreement (or the
Schedules hereto or thereto, including Schedule 1.1(68)(i) hereto) as
Liabilities to be Assumed by any member of the Electronics Group, and all
obligations and Liabilities expressly Assumed by any member of the Electronics
Group under this Agreement or any of the Ancillary Agreements;

(ii)           any and all Liabilities primarily
relating to, arising out of or resulting from:

(a)           the operation or conduct of the
Electronics Business, as conducted at any time prior to, on or after the
Effective Time (including

 

-11-

 

any Liability relating
to, arising out of or resulting from any act or failure to act by any director,
officer, employee, agent or representative (whether or not such act or failure
to act is or was within such Person’s authority));

(b)           the operation or conduct of any
business conducted by any member of the Electronics Group at any time after the
Effective Time (including any Liability relating to, arising out of or
resulting from any act or failure to act by any director, officer, employee,
agent or representative (whether or not such act or failure to act is or was
within such Person’s authority)); or

(c)           any Electronics Assets, whether
arising before, on or after the Effective Time;

(iii)          any Liabilities to the extent relating
to, arising out of or resulting from any terminated or divested Business
Entity, business or operation (A) formerly and primarily owned or managed by or
associated with any member of the Electronics Group or any Electronics Business
or (B) set forth on Schedule 1.1(68)(iii);

(iv)          the Applicable Electronics Percentage
of any Assumed Tyco Contingent Liability;

(v)           any Liabilities relating to any Electronics
Employee or Former Electronics Employee in respect of the period prior to, on
or after the Effective Time;

(vi)          any Liabilities relating to, arising
out of or resulting from any indebtedness (including debt securities and
asset-backed debt) of any member of the Electronics Group or indebtedness
(regardless of the issuer of such indebtedness) exclusively relating to the
Electronics Business or any indebtedness (regardless of the issuer of such
indebtedness) secured exclusively by any of the Electronics Assets (including
any Liabilities relating to, arising out of or resulting from a claim by a
holder of any such indebtedness, in its capacity as such);

(vii)         Specified Shared Expenses to the extent
provided in Section 5.5;

(viii)        all Liabilities reflected as liabilities
or obligations on the Electronics Balance Sheet or the accounting records
supporting such balance sheet, and all Liabilities arising or Assumed after the
date of such balance sheet which, had they arisen or been Assumed on or before
such date and been retained as of such date, would have been reflected on such
balance sheet if prepared on a consistent basis, subject to any discharge of
such Liabilities subsequent to the date of the Electronics Balance Sheet.

Notwithstanding anything to
the contrary herein, the Electronics Liabilities shall not include:

 

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(x)            any Liabilities that are expressly contemplated by this
Agreement or any Ancillary Agreement (or the Schedules hereto or thereto) as
Liabilities to be retained or Assumed by any member of the Tyco Group or the Healthcare
Group or for which any such Party is liable;

(y)           any Contracts expressly Assumed by any member of the Tyco
Group or the Healthcare Group under this Agreement or any of the Ancillary
Agreements; and

(z)            any Liabilities expressly discharged pursuant to Section
2.4 of this Agreement.

In the event of any
inconsistency or conflict which may arise in the application or interpretation
of any of the foregoing provisions, for the purpose of determining what is and
is not a Electronics Liability, any item explicitly included on a Schedule
referred to in this definition shall take priority over any provision of the
text hereof, and clause (ii) shall take priority over clause (viii) of this Section
1.1(68) and over clause (viii) of Section 1.1(116) in the definition
of Healthcare Liabilities and clause (vii) of Section 1.1(206) in
the definition of Tyco Retained Liabilities.

(69)         “Electronics Master Trust” shall
have the meaning set forth in Section 6.5(b)(ii)(A).

(70)         “Electronics Option” shall have
the meaning set forth in Section 6.1(b)(i).

(71)         “Electronics Pension Plans”
shall have the meaning set forth in Section 6.5(b)(i).

(72)         “Electronics Plans” shall mean
the employee benefit plans, policies, programs, payroll practices, and
arrangements established or assumed by the Electronics Group under this
Agreement for the benefit of Electronics Employees and where applicable, Former
Electronics Employees.

(73)         “Electronics Policies” shall
mean all Policies, current or past, which are owned or maintained by or on
behalf of Tyco or any Subsidiary of Tyco, which relate exclusively to the
Electronics Business and which Policies are either maintained by Electronics or
a member of the Electronics Group or assignable to Electronics or a member of
the Electronics Group.

(74)         “Electronics
Retiree Medical Plans” shall have the meaning set forth in Section 6.7.

(75)          “Electronics Savings Plan” shall
have the meaning set forth in Section 6.6(b)(i).

(76)         “Electronics Shared Policies”
shall mean all Policies, current or past, which are owned or maintained by or
on behalf of Tyco or any Subsidiary of Tyco which relate to the Electronics
Business, other than Electronics Policies.

 

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(77)         “Electronics Target FCF” shall
have the meaning set forth in Section 3.5.

(78)         “Electronics US
Pension Plans” shall have the meaning set forth in Section 6.5(b)(ii).

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

(80)         “Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder, all as the same shall be in effect at the time that
reference is made thereto.

(81)         “Ex-Distribution Tyco Stock Price”
shall have the meaning set forth in Section 6.1(c)(ii).

(82)         “FCF Review Period” shall have
the meaning set forth in Section 3.5.

(83)         “Fiduciary Tail Policies” shall
have the meaning set forth in Section 11.2(b).

(84)         “Final Separation Date” shall mean
the last to occur of the Electronics Distribution Date or the Healthcare Distribution
Date; provided, that in the event that Tyco makes a public announcement
that its board of directors has determined that the shares of either Electronics
or Healthcare shall not be distributed by Tyco to its stockholders, then the “Final
Separation Date” shall be the date of the last Distribution to be made by Tyco
to its stockholders as contemplated by the Plan of Separation, as so amended.

(85)         “Force Majeure” shall mean, with
respect to a Party, an event beyond the control of such Party (or any Person
acting on its behalf), which by its nature could not have been foreseen by such
Party (or such Person), or, if it could have been foreseen, was unavoidable,
and includes, without limitation, acts of God, storms, floods, riots,
pandemics, nuclear incidents, fires, sabotage, civil commotion or civil unrest,
interference by civil or military authorities, acts of war (declared or
undeclared) or armed hostilities or other national or international calamity or
one or more acts of terrorism or failure of energy sources or distribution
facilities.  Notwithstanding the
foregoing, the receipt by a Party of a hostile takeover offer, even if
unforeseen or unavoidable, and such Party’s response thereto shall not be
deemed an event of Force Majeure.

(86)         “Former Electronics
Employee” shall mean any
former employee who terminated employment with all members of the Tyco
controlled group of corporations before the Electronics Distribution Date and
who was last employed by (i) a member of the Electronics Group other than those members of the
Electronics Group identified on part A of Schedule 1.1(86) or (ii) a
member of the Healthcare Group or Tyco Group identified on part B of Schedule
1.1(86).

(87)         “Former Healthcare
Employee” shall mean any former employee who terminated employment with all
members of the Tyco controlled group of corporations

 

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before
the Healthcare Distribution Date and who was last employed by (i) a member of
the Healthcare Group
other than those members of the Healthcare Group identified on part A of Schedule
1.1(87) or (ii) a member of the Electronics Group or Tyco Group identified
on part B of Schedule 1.1(87).

(88)         “Former Tyco
Employee” shall mean any former employee who terminated employment with all
members of the Tyco controlled group of corporations before the Electronics
Distribution Date or the Healthcare Distribution Date and who was last employed
by (i) a member of the Tyco Group other than those members of the Tyco Group identified
on part A of Schedule 1.1(88) or (ii) a member of the Electronics Group
or Healthcare Group identified on part B of 
Schedule 1.1(88).

(89)         “Free Cash Flow” shall, for each
of Healthcare and Electronics, mean cash generated from continuing operations, (i)
minus capital expenditures, net, (ii) minus any increase in the sale of accounts
receivable, (iii) minus any changes in purchase accounting and holdback
liabilities, (iv) plus voluntary pension contributions, (v) plus its portion of
Separation Expenses, for the period from September 30, 2006 to its respective Distribution
Date, all calculated as set forth in Tyco’s Form 10-K for the fiscal year ended
September 29, 2006 in Item 7: Management’s
Discussion and Analysis of Financial Condition and Results of Operations under the
heading “Liquidity and Capital Resources” and determined in accordance with generally accepted
accounting principles.

(90)         “Governmental Approvals” shall
mean any notices or reports to be submitted to, or other filings to be made
with, or any consents, registrations, approvals, permits or authorizations to
be obtained from, any Governmental Entity.

(91)         “Governmental Entity” shall mean
any nation or government, any state, municipality or other political
subdivision thereof and any entity, body, agency, commission, department,
board, bureau or court, whether domestic, foreign or multinational, exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government and any executive official thereof.

(92)         “Group” shall mean (i) with
respect to Tyco, the Tyco Group, (ii) with respect to Healthcare, the
Healthcare Group and (iii) with respect to Electronics, the Electronics Group.

(93)         “Group Insurance Plan” when
immediately preceded by “Tyco,” shall mean any basic life insurance, dependent
life insurance, optional life insurance, accidental death and dismemberment
insurance, business travel

 

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accident insurance and
executive group universal life insurance programs sponsored by Tyco, (ii) when
immediately preceded by “Healthcare,” shall mean the basic life insurance,
dependent life insurance, optional life insurance, accidental death and
dismemberment insurance, business travel accident insurance and executive group
universal life insurance programs to be established by Healthcare under Section
6.8(e); and (iii) when immediately preceded by “Electronics,” shall mean
the basic life insurance, dependent life insurance, optional life insurance,
accidental death and dismemberment insurance, business travel accident
insurance and executive group universal life insurance program to be
established by Electronics under Section 6.8(e).

(94)         “Guaranty Release” shall have
the meaning set forth in Section 2.10(b).

(95)         “Health Plans” when immediately preceded by “Tyco,” shall mean the Tyco
International employee health benefit plans, any other medical, HMO, vision,
and dental plans and any similar or successor plans, (ii) when immediately
preceded by “Healthcare,” shall mean the employee health benefit plans, any
other medical, HMO, vision, and dental plans and any similar or successor plans
to be established by Healthcare under Section 6.8(d); and (iii) when
immediately preceded by “Electronics,” shall mean employee health benefit
plans, any other medical, HMO, vision, and dental plans and any similar or
successor plans program to be established by Electronics under Section
6.8(d).

(96)         “Healthcare” shall have the
meaning set forth in the preamble.

(97)         “Healthcare Assets” shall mean:

(i)            the ownership interests in those
Business Entities that are included in the definition of Healthcare Group, including
those Business Entities set forth on Schedule 1.1(113) in the definition
of Healthcare Group and any Business Entities previously engaged in the Tyco Plastics
and Adhesives business or the A&E Products business;

(ii)           all Healthcare Contracts, any rights
or claims arising thereunder, and any other rights or claims or contingent
rights or claims primarily relating to or arising from any Healthcare Asset or
the Healthcare Business;

(iii)          any and all Assets reflected on the
Healthcare Balance Sheet or the accounting records supporting such balance sheet
and any Assets acquired by or for Healthcare or any member of the Healthcare
Group subsequent to the date of such balance sheet which, had they been so
acquired on or before such date and owned as of such date, would have been
reflected on such balance sheet if prepared on a consistent basis, subject to
any dispositions of any of such Assets subsequent to the date of such balance
sheet;

(iv)          subject to Article XI, any
rights of any member of the Healthcare Group under any Policies, including any
rights thereunder arising after the Distribution Date in respect of any
Policies that are occurrence policies;

(v)           any and all Assets owned or held
immediately prior to the Relevant Time by Tyco or any of its Subsidiaries
(including, prior to their applicable Distribution Date, Electronics or any of
their respective Subsidiaries) primarily relating to or used in the Healthcare
Business.  The intention of this clause
(v) is only to rectify any inadvertent omission of Transfer of any Asset that,
had the Parties given specific consideration to such Asset as of the date
hereof, would have otherwise been classified as a Healthcare Asset.  No Asset shall be deemed a

 

-16-

 

Healthcare Asset solely
as a result of this clause (v) unless a claim with respect thereto is made by
Healthcare within the applicable time period(s) established by Section 2.6(d);

(vi)          the Assets set forth on Schedule 1.1(97)(vi)
and any and all Assets that are expressly contemplated by this Agreement or any
Ancillary Agreement as Assets which have been or are to be Transferred to
Healthcare or any other member of the Healthcare Group;

(vii)         any and all furnishings and office
equipment located at a physical site of which the ownership or leasehold
interest is being Transferred to Healthcare; provided, that personal
computers shall be Transferred to the Party who, following the Relevant Time,
employs the applicable employee who, prior to the Relevant Time, used such
personal computer; and

(viii)        the Applicable Healthcare Percentage of
any Tyco Contingent Asset.

Notwithstanding the
foregoing, the Healthcare Assets shall not include any Assets that are
expressly contemplated by this Agreement or any Ancillary Agreement (or the
Schedules hereto or thereto) as Assets to be retained by or Transferred to any
member of the Tyco Group or the Electronics Group, as the case may be.

In the event of any
inconsistency or conflict which may arise in the application or interpretation
of any of the foregoing provisions, for the purpose of determining what is and
is not a Healthcare Asset, any item explicitly included on a Schedule referred
to in this definition shall take priority over any provision of the text
hereof, and clause (v) shall take priority over clause (iii) of this Section
1.1(97) and over clause (iii) of Section 1.1(49) in the definition
of Electronics Assets and Section 1.1(203) in the definition of Tyco
Retained Assets.

(98)         “Healthcare Balance Sheet” shall
mean the combined balance sheet of the Healthcare Group, including the notes
thereto, as of December 29, 2006, as filed with the Healthcare Form 10.

(99)         “Healthcare Business” shall mean
(i) the business and operations of the Healthcare segment of Tyco as described
in Healthcare’s Form 10, (ii) any other business conducted primarily through
the use of the Healthcare Assets prior to the Relevant Time and (iii) the
businesses and operations of Business Entities acquired or established by or
for Healthcare or any of its Subsidiaries after the date of this Agreement.

(100)       “Healthcare Cash Balance” shall
have the meaning set forth in Section 3.5.

(101)       “Healthcare Common Stock” shall
have the meaning set forth in the recitals hereto.

(102)       “Healthcare Contracts” shall mean
the following Contracts to which Tyco or any of its Affiliates is a party or by
which it or any of its Affiliates or any of their

 

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respective Assets is
bound, whether or not in writing, except for any such Contract or part thereof
(i) that is expressly contemplated not to be Transferred by any member of the
Tyco Group or the Electronics Group to the Healthcare Group or (ii) that is
expressly contemplated to be Transferred to (or remain with) any member of the
Tyco Group or the Electronics Group, in each case, pursuant to any provision of
this Agreement or any Ancillary Agreement:

(i)            any Contract entered into in the
name of, or expressly on behalf of, any division, business unit or member of
the Healthcare Group;

(ii)           any Contract that relates primarily
to the Healthcare Business;

(iii)          any Contract representing capital or
operating equipment lease obligations reflected on the Healthcare Balance
Sheet;

(iv)          any Contract or part thereof, that is
otherwise expressly contemplated pursuant to this Agreement (including pursuant
to Section 2.2(c)) or any of the Ancillary Agreements to be
assigned to any member of the Healthcare Group; and

(v)           any guarantee, indemnity,
representation or warranty of or in favor of any member of the Healthcare
Group.

(103)       “Healthcare Credit Facilities”
shall mean the credit facilities and related contracts to be entered into by
one or more members of the Healthcare Group on or prior to the Healthcare
Distribution Date in connection with the Plan of Separation.

(104)       “Healthcare
Deferred Compensation Liabilities” shall have the meaning set forth in Section 6.4(a)(i).

(105)       “Healthcare
Deferred Compensation Plans” shall mean the nonqualified deferred
compensation plans listed in Schedule 6.4(a) and any other legacy
nonqualified deferred compensation plan sponsored by members of the Healthcare
Group.

(106)       “Healthcare Director Deferred Compensation Plan” shall mean the Tyco Healthcare Ltd.
Director Deferred Compensation Plan adopted by Healthcare to provide for
non-employee director nonqualified deferred compensation.

(107)       “Healthcare Distribution” shall
mean the distribution on the Healthcare Distribution Date to holders of record
of shares of Tyco Common Stock as of the Healthcare Distribution Record Date of
the Healthcare Common Stock owned by Tyco on the basis of one share of Healthcare
Common Stock for every         outstanding shares of
Tyco Common Stock.

(108)       “Healthcare Distribution Date”
shall mean the date on which Tyco distributes all of the issued and outstanding
shares of Healthcare Common Stock to the holders of Tyco Common Stock.

 

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(109)       “Healthcare Distribution Date FCF”
shall have the meaning set forth in Section 3.5(e).

(110)       “Healthcare Distribution Record Date”
shall mean such date as may be determined by Tyco’s Board of Directors as the
record date for the Healthcare Distribution.

(111)       “Healthcare Employee” shall mean
an active employee or an employee on vacation or on approved leave of absence
(including qualified military service under the Uniformed Services Employment
and Reemployment Rights Act of 1994, and leave under the Family Medical Leave
Act and other approved leaves) who (i) immediately following the Healthcare
Distribution Date is employed by Healthcare or any member of the Healthcare
Group, or (ii) any Delayed Transfer Employee identified on Schedule 1.1(34)
who will be employed by Healthcare or any member of the Healthcare Group.  Healthcare Employee shall also include any
employee of an entity in the Healthcare Group who, as of the Healthcare
Distribution Date, is receiving short-term or long-term disability benefits or
workers’ compensation benefits.

(112)       “Healthcare Form 10” shall mean
the registration statement on Form 10 filed by Healthcare with the Commission
in connection with the Healthcare Distribution.

(113)       “Healthcare Group” shall mean Healthcare
and each Person (other than any member of the Electronics Group or the Tyco
Group) that is a direct or indirect Subsidiary of Healthcare immediately after
the Effective Time, and each Person that becomes a Subsidiary of Healthcare
after the Effective Time, which shall include those entities identified as such
on Schedule 1.1(113).

(114)       “Healthcare Indemnitees” shall
mean each member of the Healthcare Group and each of their Affiliates and each member
of the Healthcare Group and their respective Affiliates’ respective directors,
officers, employees and agents and each of the heirs, executors, successors and
assigns of any of the foregoing.

(115)       “Healthcare Information Statement”
shall mean the Information Statement attached as an exhibit to the Healthcare
Form 10 sent to the holders of shares of Tyco Common Stock in connection with
the Healthcare Distribution, including any amendment or supplement thereto.

(116)       “Healthcare Liabilities” shall
mean:

(i)            any and all Liabilities that are
expressly contemplated by this Agreement or any Ancillary Agreement (or the
Schedules hereto or thereto, including Schedule 1.1(116)(i) hereto) as
Liabilities to be Assumed by any member of the Healthcare Group, and all
obligations and Liabilities expressly Assumed by any member of the Healthcare
Group under this Agreement or any of the Ancillary Agreements;

(ii)           any and all Liabilities primarily
relating to, arising out of or resulting from:

 

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(A)          the operation or conduct of the
Healthcare Business, as conducted at any time prior to, on or after the
Effective Time (including any Liability relating to, arising out of or
resulting from any act or failure to act by any director, officer, employee, agent
or representative (whether or not such act or failure to act is or was within
such Person’s authority));

(B)           the operation or conduct of any
business conducted by any member of the Healthcare Group at any time after the
Effective Time (including any Liability relating to, arising out of or
resulting from any act or failure to act by any director, officer, employee,
agent or representative (whether or not such act or failure to act is or was
within such Person’s authority)); or

(C)           any Healthcare Assets, whether
arising before, on or after the Effective Time;

(iii)          any Liabilities to the extent relating
to, arising out of or resulting from any terminated or divested Business
Entity, business or operation (A) formerly and primarily owned or managed by or
associated with any member of the Healthcare Group or any Healthcare Business
or (B) set forth on Schedule 1.1(116)(iii);

(iv)          the Applicable Healthcare Percentage
of any Assumed Tyco Contingent Liability;

(v)           any Liabilities relating to any
Healthcare Employee or Former Healthcare Employee in respect of the period
prior to, on or after the Effective Time;

(vi)          any Liabilities relating to, arising
out of or resulting from any indebtedness (including debt securities and
asset-backed debt) of any member of the Healthcare Group or indebtedness
(regardless of the issuer of such indebtedness) exclusively relating to the
Healthcare Business or any indebtedness (regardless of the issuer of such
indebtedness) secured exclusively by any of the Healthcare Assets (including
any Liabilities relating to, arising out of or resulting from a claim by a
holder of any such indebtedness, in its capacity as such);

(vii)         Specified Shared Expenses to the extent
provided in Section 5.5; and

(viii)        all Liabilities reflected as liabilities
or obligations on the Healthcare Balance Sheet or the accounting records
supporting such balance sheet, and all Liabilities arising or Assumed after the
date of such balance sheet which, had they arisen or been Assumed on or before
such date and been retained as of such date, would have been reflected on such
balance sheet if prepared on a consistent basis, subject to any discharge of
such Liabilities subsequent to the date of the Healthcare Balance Sheet.

 

-20-

 

Notwithstanding anything to
the contrary herein, the Healthcare Liabilities shall not include:

(x)            any Liabilities that are expressly contemplated by this
Agreement or any Ancillary Agreement (or the Schedules hereto or thereto) as
Liabilities to be retained or Assumed by any member of the Tyco Group or the
Electronics Group or for which any such Party is liable;

(y)           any Contracts expressly Assumed by any member of the Tyco
Group or the Electronics Group under this Agreement or any of the Ancillary
Agreements; and

(z)            any Liabilities expressly discharged pursuant to Section
2.4 of this Agreement.

In the event of any
inconsistency or conflict which may arise in the application or interpretation
of any of the foregoing provisions, for the purpose of determining what is and
is not a Healthcare Liability, any item explicitly included on a Schedule
referred to in this definition shall take priority over any provision of the
text hereof, and clause (ii) shall take priority over clause (viii) of this Section
1.1(116) and over clause (viii) of Section 1.1(68) in the definition
of Electronics Liabilities and clause (vii) of Section 1.1(206) in
the definition of Tyco Retained Liabilities.

(117)       “Healthcare Master Trust” shall
have the meaning set forth in Section 6.5(a)(ii)(A).

(118)       “Healthcare Option” shall have the
meaning set forth in Section 6.1(a)(i).

(119)       “Healthcare Pension Plans” shall
have the meaning set forth in Section 6.5(a)(i).

(120)       “Healthcare Plans” shall mean the
employee benefit plans, policies, programs, payroll practices, and arrangements
established or assumed by the Healthcare Group under this Agreement for the
benefit of Healthcare Employees and, where applicable, Former Healthcare
Employees.

(121)       “Healthcare Policies” shall mean
all Policies, current or past, which are owned or maintained by or on behalf of
Tyco or any Subsidiary of Tyco, which relate exclusively to the Healthcare
Business and which Policies are either maintained by Healthcare or a member of
the Healthcare Group or assignable to Healthcare or a member of the Healthcare
Group.

(122)       “Healthcare Retiree
Medical Plans” shall have the meaning set forth in Section 6.7.

(123)       “Healthcare Savings
Plan” shall have the meaning set forth in Section 6.6(a).

 

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(124)       “Healthcare Shared Policies” shall
mean all Policies, current or past, which are owned or maintained by or on
behalf of Tyco or any Subsidiary of Tyco which relate to the Healthcare
Business, other than Healthcare Policies.

(125)       “Healthcare Target FCF” shall have
the meaning set forth in Section 3.5.

(126)        “Healthcare US Pension Plans”
shall have the meaning set forth in Section 6.5(a)(ii).

(127)       “HIPAA” shall have the meaning set
forth in Section 6.9(e).

(128)       “Income Taxes” shall have the
meaning set forth in the Tax Sharing Agreement.

(129)       “Indemnifiable Loss” and “Indemnifiable
Losses” shall mean any and all damages, losses, deficiencies, Liabilities,
obligations, penalties, judgments, settlements, claims, payments, fines,
interest, costs and expenses (including the costs and expenses of any and all
Actions and demands, assessments, judgments, settlements and compromises
relating thereto and the reasonable costs and expenses of attorneys’,
accountants’, consultants’ and other professionals’ fees and expenses incurred
in the investigation or defense thereof or the enforcement of rights
hereunder), excluding special, consequential, indirect, punitive damages (other
than special, consequential, indirect and/or punitive damages awarded to any
third party against an indemnified party) and/or Taxes.

(130)       “Indemnifying Party” shall have
the meaning set forth in Section 8.5(b).

(131)       “Indemnitee” shall have the
meaning set forth in Section 8.5(b).

(132)       “Indemnity Payment” shall have the
meaning set forth in Section 8.9(a).

(133)       “Information” shall mean
information, whether or not patentable or copyrightable, in written, oral,
electronic or other tangible or intangible forms, stored in any medium,
including studies, reports, records, books, contracts, instruments, surveys,
discoveries, ideas, concepts, trade secrets, know-how, techniques, designs,
specifications, drawings, blueprints, diagrams, models, prototypes, samples,
flow charts, data, computer data, disks, diskettes, tapes, computer programs or
other software, marketing plans, customer names, communications by or to
attorneys (including attorney-client privileged communications), memos and
other materials prepared by attorneys or under their direction (including attorney
work product), communications and materials otherwise related to or made or
prepared in connection with or in preparation for any legal proceeding, and
other technical, financial, employee or business information or data.

(134)       “Insurance Administration” shall
mean, with respect to each Shared Policy, the accounting for premiums,
retrospectively-rated premiums, defense costs, indemnity payments, deductibles
and retentions, as appropriate, under the terms and conditions of each of the
Shared Policies; and the reporting to excess insurance carriers of any losses
or claims which may cause the per-occurrence, per claim or aggregate limits of

 

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any Shared Policy to be
exceeded, and the distribution of Insurance Proceeds as contemplated by this
Agreement.

(135)       “Insurance Proceeds” shall mean
those monies (i) received by an insured from an insurance carrier, including
due to premium adjustments, whether or not retrospectively rated, or (ii) paid
by an insurance carrier on behalf of an insured, in either case net of any
applicable premium deductible or self insured retention.  For the avoidance of doubt, “Insurance
Proceeds” shall not include any costs or expenses incurred by a Party in
pursuing insurance coverage.

(136)       “Insured Claims” shall mean those
Liabilities that, individually or in the aggregate, are covered within the
terms and conditions of any of the Shared Policies, whether or not subject to
deductibles, co-insurance, self-insured retentions, or uncollectibility due to
insurer insolvency.

(137)       “Intellectual Property” shall mean
all intellectual property and industrial property rights of any kind or nature,
including all U.S.  and foreign (i)
patents, patent applications, patent disclosures, and all related
continuations, continuations-in-part, divisionals, reissues, re-examinations,
substitutions and extensions thereof, (ii) Trademarks, (iii) copyrights and
copyrightable subject matter, (iv) rights of publicity, (v) moral rights and
rights of attribution and integrity, (vi) rights in Software, (vii) trade
secrets and all other confidential information, know-how, inventions,
proprietary processes, formulae, models and methodologies, (viii) rights of
privacy and rights to personal information, (ix) telephone numbers and Internet
protocol addresses, (x) all rights in the foregoing and in other similar
intangible assets, (ix) all applications and registrations for the foregoing
and (xii) all rights and remedies against past, present, and future infringement,
misappropriation, or other violation of the foregoing.

(138)       “Joint Defense Agreement” shall
mean the Joint Defense Agreement by and among Tyco, Healthcare and Electronics,
in the form attached hereto as Exhibit B.

(139)       “Joint Venture Agreement” shall
mean the Joint Venture Agreement by and among Tyco and Electronics, in the form
attached hereto as Exhibit C.

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

(141)       “Liabilities” shall mean any and
all debts, liabilities, costs, expenses, interest and obligations, whether
accrued or fixed, absolute or contingent, matured or unmatured, reserved or
unreserved, or determined or determinable, including those arising under any
Law, claim, demand, Action, whether asserted or unasserted, or order, writ,
judgment, injunction, decree, stipulation, determination or award entered by or
with any Governmental Entity and those arising under any Contract or any fines,
damages or equitable relief which may be imposed and including all costs and
expenses related thereto.

(142)       “Liable Party” shall have the
meaning set forth in Section 2.9(b).

 

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(143)       “Managing Party” shall have the
meaning set forth in Section 7.2(a).

(144)       “Mediation Period” shall have the
meaning set forth in Section 10.2.

(145)       “New York Courts” shall have the meaning
set forth in Section 12.19.

(146)        “NYSE” shall mean the New York
Stock Exchange.

(147)       “Option” (i) when immediately
preceded by “Tyco,” shall mean an option to purchase shares of Tyco Common
Stock granted pursuant to one of the Tyco Equity Plans; (ii) when immediately
preceded by “Healthcare,” shall mean an option to purchase shares of Healthcare
Common Stock as of the Healthcare Distribution, which Option shall be granted
pursuant to the 2007 Healthcare Stock and Incentive Plan (as hereinafter defined)
as part of the adjustment to Tyco Options in connection with the Healthcare
Distribution or (iii) when immediately preceded by “Electronics,” shall mean an
option to purchase shares of Electronics Common Stock as of the Electronics
Distribution, which Option shall be granted pursuant to the 2007 Electronics Stock
and Incentive Plan (as hereinafter defined) as part of the adjustment to Tyco
Options in connection with the Electronics Distribution.

(148)       “Other Parties’ Auditors” shall
have the meaning set forth in Section 5.3(b).

(149)       “Other Party” shall have the
meaning set forth in Section 2.9(a).

(150)       “Other Party Marks” shall have the
meaning set forth in Section 5.2(a).

(151)       “Party” shall have the meaning set
forth in the preamble.

(152)        “Performance Share Unit” (i) when
immediately preceded by “Tyco,” shall mean a unit granted by Tyco pursuant to
one of the Tyco Equity Plans representing a general unsecured promise by Tyco
to deliver a share of Tyco Common Stock and which is subject to certain performance
measures; (ii) when immediately preceded by “Healthcare” shall mean a unit
granted by Healthcare representing a general unsecured promise by Healthcare to
deliver a share of Healthcare Common Stock, which unit is granted pursuant to a
Healthcare equity plan as part of the adjustment to Tyco Performance Share
Units in connection with the Healthcare Distribution; and (iii) when
immediately preceded by “Electronics” shall mean a unit granted by Electronics
representing a general unsecured promise by Electronics to deliver a share of
Electronics Common Stock, which unit is granted pursuant to an Electronics
equity plan as part of the adjustment to Tyco Performance Share Units in
connection with the Electronics Distribution.

(153)       “Person” shall mean 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.

 

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(154)       “Pension Plans” (i) when
immediately preceded by “Tyco,” shall mean the pension plans sponsored by Tyco
described in Section 6.5(c), (ii) when immediately preceded by “Healthcare,”
shall mean the pension plans to be established by Healthcare under Section
6.5; and (iii) when immediately preceded by “Electronics,” shall mean the
pension plans to be established by Electronics under Section 6.5(b).

(155)        “PHI” shall have the meaning set
forth in Section 6.9(e).

(156)       “Plan of Separation” shall have
the meaning set forth in the preamble.

(157)       “Policies” shall mean insurance
policies and insurance Contracts of any kind (other than life and benefits
policies or Contracts), including primary, excess and umbrella policies,
comprehensive general liability policies, director and officer liability,
fiduciary liability, automobile, aircraft, marine, property and casualty,
workers’ compensation and employee dishonesty insurance policies, bonds and
self-insurance and captive insurance company arrangements, together with the
rights, benefits and privileges thereunder, including the insurance policies
written by White Mountain Insurance Company and Mountainbran Limited.

(158)       “Pre-Distribution Electronics Stock
Price” shall have the meaning set forth in Section 6.1(b)(ii).

(159)        “Pre-Distribution Healthcare Stock
Price” shall have the meaning set forth in Section 6.1(a)(ii).

(160)        “Pre-Distribution Tyco Stock Price”
shall have the meaning set forth in Section 6.1(c).

(161)       “Prime Rate” shall mean the rate
per annum publicly announced by Citibank, N.A.  (or
successor thereto) from time to time as its prime rate in effect at its
principal office in New York City.  For
purposes of this Agreement, any change in the Prime Rate shall be effective on
the date such change in the Prime Rate is publicly announced as effective.

(162)       “Records” shall mean any
Contracts, documents, books, records or files.

(163)       “Relevant Time” shall mean, 12:01
a.m., Eastern Standard Time as between (i) Tyco and Healthcare, on the Healthcare
Distribution Date, (ii) Tyco and Electronics, on the Electronics Distribution
Date and (iii) Healthcare and Electronics on the earlier to occur of the Healthcare
Distribution Date and the Electronics Distribution Date.

(164)       “Response Letter” shall have the
meaning set forth in Section 3.5.

(165)       “Restricted Person” shall have the
meaning set forth in Section 5.1(a).

(166)       “Restricted Stock” (i) when
immediately preceded by “Tyco,” shall mean a grant by Tyco pursuant to one of
the Tyco Equity Plans of a share of Tyco Common

 

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Stock subject to certain
vesting or other restrictions; (ii) when immediately preceded by “Healthcare”
shall mean a grant by Healthcare pursuant to the 2007 Healthcare Stock and Incentive
Plan of a share of Healthcare Common Stock subject to certain vesting or other
restrictions granted by Healthcare in connection with the Healthcare
Distribution; and (iii) when immediately preceded by “Electronics” shall mean a
grant by Electronics pursuant to the 2007 Electronics Stock and Incentive Plan
of a share of Electronics Common Stock subject to certain vesting or other
restrictions granted by Electronics in connection with the Electronics Distribution.

(167)       “Restricted Stock Unit” (i) when
immediately preceded by “Tyco,” shall mean a unit granted by Tyco pursuant to
one of the Tyco Equity Plans representing a general unsecured promise by Tyco
to deliver a share of Tyco Common Stock; (ii) when immediately preceded by “Healthcare”
shall mean a unit granted by Healthcare representing a general unsecured
promise by Healthcare to deliver a share of Healthcare Common Stock, which unit
is granted pursuant to the 2007 Healthcare Stock and Incentive Plan as part of the
adjustment to Tyco Restricted Stock Units in connection with the Healthcare
Distribution; and (iii) when immediately preceded by “Electronics” shall mean a
unit granted by Electronics representing a general unsecured promise by Electronics
to deliver a share of Electronics Common Stock, which unit is granted pursuant
to the 2007 Electronics Stock and Incentive Plan as part of the adjustment to Tyco
Restricted Stock Units in connection with the Electronics Distribution.

(168)        “Rules” shall have the meaning
set forth in Section 10.3.

(169)       “Section 125 Plan” (i) when
immediately preceded by “Tyco,” shall mean a flexible spending account or
flexible benefit plan qualified under Section 125 of the Internal Revenue Code
sponsored by Tyco, (ii) when immediately preceded by “Healthcare,” shall mean
the flexible spending account or flexible benefit plan qualified under Section
125 of the Internal Revenue Code sponsored program to be established by
Healthcare under Section 6.8(b)(i); and (iii) when immediately preceded
by “Electronics,” shall mean the short flexible spending account or flexible
benefit plan qualified under Section 125 of the Internal Revenue Code sponsored
to be established by Electronics under Section 6.8(b)(ii).

(170)       “Securities Act” shall mean the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time that
reference is made thereto.

(171)       “Security Interest” shall mean any
mortgage, security interest, pledge, lien, charge, claim, option, right to
acquire, voting or other restriction, right-of-way, covenant, condition,
easement, encroachment, restriction on transfer, or other encumbrance of any
nature whatsoever, excluding restrictions on transfer under securities Laws.

(172)       “Separation Expenses” shall have
the meaning set forth in Section 12.5.

 

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(173)       “Severance Plan” (i) when
immediately preceded by “Tyco,” shall mean any severance program sponsored by
Tyco, (ii) when immediately preceded by “Healthcare,” shall mean the severance
program to be established by Healthcare under Section 6.8(c); and (iii)
when immediately preceded by “Electronics,” shall mean the severance program to
be established by Electronics under Section 6.8(c).

(174)       “Shared Contract” shall have the
meaning set forth in Section 2.2(c)(i).

(175)       “Shared Policies” shall mean all
Policies, current or past, which are owned or maintained by or on behalf of Tyco
or any of its Subsidiaries which relate to one or more of the Tyco Retained
Business, the Healthcare Business or the Electronics Business.

(176)        “Software” shall mean all
computer programs (whether in source code, object code, or other form),
algorithms, databases, compilations and data, and technology supporting the
foregoing, and all documentation, including flowcharts and other logic and
design diagrams, technical, functional and other specifications, and user and
training materials related to any of the foregoing.

(177)       “Specified Shared Expenses” shall
mean any costs and expenses relating to the items or categories set forth on Schedule
1.1(177) and shall be shared in the manner specified in Section 5.5.

(178)       “Statement of Free Cash Flows”
shall have the meaning set forth in Section 3.5.

(179)       “Subsidiary” shall mean with
respect to any Person (i) a corporation, fifty percent (50%) or more of the
voting or capital stock of which is, as of the time in question, directly or
indirectly owned by such Person and (ii) any other partnership, joint venture,
association, joint stock company, trust, unincorporated organization or other
entity in which such Person, directly or indirectly, owns fifty percent (50%)
or more of the equity economic interest thereof or has the power to elect or
direct the election of fifty percent (50%) or more of the members of the
governing body of such entity or otherwise has control over such entity (e.g.,
as the managing partner of a partnership).

(180)       “Tax” shall have the meaning set
forth in the Tax Sharing Agreement.

(181)       “Tax Contest” shall have the
meaning of the definition of “Audit” as set forth in the Tax Sharing Agreement.

(182)       “Tax Return” shall have the
meaning set forth in the Tax Sharing Agreement.

(183)       “Tax Sharing Agreement” shall mean
the Tax Sharing Agreement by and among Tyco, Healthcare and Electronics, in the
form attached hereto as Exhibit D.

(184)       “Third Party Claim” shall have the
meaning set forth in Section 8.5(b).

(185)       “Third Party Proceeds” shall have
the meaning set forth in Section 8.9(a).

 

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(186)       “Trademarks” shall mean all U.S.  and foreign trademarks, service marks,
corporate names, trade names, domain names, logos, slogans, designs, trade
dress and other similar designations of source or origin, together with the
goodwill symbolized by any of the foregoing.

(187)       “Transfer” shall have the meaning
set forth in Section 2.2(a)(i).

(188)       “Tyco” shall have the meaning set
forth in the preamble.

(189)       “Tyco Balance Sheet” shall mean the
combined balance sheet of the Tyco Group prepared to give effect to the
transactions contemplated hereby, including the notes thereto, as of September
29, 2006, set forth in the Tyco Registration Statement; provided, that
to the extent any Assets or Liabilities are Transferred by any Party or any
member of its Group to Tyco or any member of the Tyco Group or vice versa in connection
with the Plan of Separation and prior to the Final Separation Date, such assets
and/or liabilities shall be deemed to be included or excluded from the Tyco
Balance Sheet, as the case may be.

(190)       “Tyco Common Stock” shall mean the
issued and outstanding shares of Tyco common stock, par value $0.20 per share,
of Tyco International Ltd.

(191)       “Tyco Contingent Asset” shall mean
(i) any of the Assets set forth on Schedule 1.1(191), (ii) any and all
Assets relating to, arising out of or resulting from the business or operations
of Tyco or any of its predecessor companies or businesses or any of its
Affiliates, Subsidiaries and divisions other than any claim or right that is
specified as a Healthcare Asset, Electronics Asset and/or Tyco Retained Asset
(or otherwise specifically allocated to any Party or Parties under this
Agreement or any Ancillary Agreement) (against any Person other than any member
of the Tyco Group, Healthcare Group or Electronics Group), if and to the extent
such claim or other right has accrued as of the Determination Date (or relates
to any events or circumstances prior to the Determination Date), or if such claim
or other right were known and fixed prior to the Determination Date, would have
been reflected on the consolidated balance sheet of Tyco prior to the
Determination Date or (iii) any Assets relating to, arising from or involving a
general corporate matter of Tyco, including any Assets to the extent relating
to, arising out of or resulting from any terminated or divested Business
Entity, business or operation formerly owned or managed by Tyco or any of its
Affiliates prior to the Determination Date (other than any Asset to the extent
relating to any terminated Business Entity, business or operation formerly and
primarily owned and managed by or associated with any member of the Healthcare
Group, the Electronics Group or the Tyco Group, as the case may be, or any of
their respective Businesses), and, in each case of subclauses (i), (ii) and
(iii), which is not otherwise specified to be a Healthcare Asset, Electronics
Asset or Tyco Retained Asset.  An Asset
meeting the foregoing definition shall be considered a Tyco Contingent Asset
regardless of whether there was any Action pending, threatened or contemplated
as of the Determination Date with respect thereto.  For purposes of the foregoing, an Asset shall
be deemed to have accrued as of the Determination Date if all the elements of
the claim necessary for its assertion shall have occurred on or prior to the

 

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Determination Date, such
that the Asset were it asserted in an Action on or prior to the Determination
Date, would not be dismissed by a court on ripeness or similar grounds.

Notwithstanding anything to
the contrary in this definition of Tyco Contingent Assets, Tyco Contingent
Assets shall not include any Assets related to or attributable to or arising in
connection with Taxes or Tax Returns that are expressly governed by the Tax
Sharing Agreement

The term “Contingent” as
used in the definition of “Tyco Contingent Asset” is a term of convenience only
and shall not otherwise limit the type or manner of Assets that would otherwise
be within the provisions of clauses (i) — (iii) of this definition.

(192)       “Tyco Deferred Compensation
Liabilities” shall have the meaning set forth in Section 6.4(c).

(193)       “Tyco Deferred
Compensation Plans” shall mean the nonqualified deferred compensation plans
set forth in Schedule 6.4(c) and any other legacy nonqualified deferred
compensation plan sponsored by members of the Tyco Group.

(194)       “Tyco Directors”
shall have the meaning set forth in Section 6.1(c)(i).

(195)       “Tyco Employee” shall mean an
active employee or an employee on vacation or on approved leave of absence
(including qualified military service under the Uniformed Services Employment
and Reemployment Rights Act of 1994, and leave under the Family Medical Leave
Act and other approved leaves) who, (i) immediately following the Final
Separation Date is employed by Tyco or any member of the Tyco Group, or (ii) any
Delayed Transfer Employee identified on Schedule 1.1(34) who will be
employed by Tyco or any member of the Tyco Group.  Tyco Employee shall also include any employee
of an entity in the Tyco Group who, as of the Final Separation Date, is
receiving short-term or long-term disability benefits or workers’ compensation
benefits.

(196)        “Tyco Equity Plans”
shall mean, collectively, the equity-based plans set forth on Schedule 1.1(196).

(197)       “Tyco Group” shall mean Tyco and
each Person (other than any member of the Healthcare Group or the Electronics
Group) that is a direct or indirect Subsidiary of Tyco immediately after the
Effective Time, and each Business Entity that becomes a Subsidiary of Tyco
after the Effective Time, which shall include those entities identified as such
on Schedule 1.1(197).

(198)       “Tyco Indemnitees” shall mean
Tyco, each member of the Tyco Group, each of their respective directors,
officers, employees and agents and each of the heirs, executors, successors and
assigns of any of the foregoing, except the Healthcare Indemnitees and the Electronics
Indemnitees.

(199)       “Tyco International (US) Inc. Retirement
Savings Master Trust” shall mean the trust created by an agreement between
the plan sponsor and trustees of the Tyco

 

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International (US) Inc.
Retirement Savings and Investment Plans I — VI and IX for purposes of holding
assets under such plans.

(200)       “Tyco Master Trust” means the Tyco
International Master Retirement Trust.

(201)       “Tyco Option” means an option to
purchase from Tyco a stated number of shares of Tyco Common Stock at a
specified price.

(202)       “Tyco Registration Statement”
shall mean the Registration Statement on Form S-1 (No. 333-140064) filed by
Tyco with the Commission in the form in which it became effective under the
Securities Act.

(203)        “Tyco Retained Assets” shall
mean:

(i)            the ownership interests in those
Business Entities that are included in the definition of Tyco Group, including
those Business Entities set forth on Schedule 1.1(197) in the definition
of Tyco Group;

(ii)           all Tyco Retained Contracts, any
rights or claims arising thereunder, and any other rights or claims or
contingent rights or claims primarily relating to or arising from any Tyco
Retained Asset or the Tyco Retained Business;

(iii)          any and all Assets (other than cash) reflected
on the Tyco Balance Sheet or the accounting records supporting such balance
sheet and any Assets acquired by or for Tyco or any member of the Tyco Group
subsequent to the date of such balance sheet which, had they been so acquired
on or before such date and owned as of such date, would have been reflected on
such balance sheet if prepared on a consistent basis, subject to any
dispositions of any of such Assets subsequent to the date of such balance
sheet;

(iv)          subject to Article XI, any
rights of any member of the Tyco Group under any Policies, including any rights
thereunder;

(v)           any and all Assets owned or held
immediately prior to the applicable Relevant Time by Tyco or any of its
Subsidiaries (including, prior to their applicable Distribution Date,
Healthcare or any of their respective Subsidiaries) primarily relating to or
used in the Tyco Retained Business.  The
intention of this clause (v) is only to rectify any inadvertent omission of
Transfer of any Asset that, had the Parties given specific consideration to
such Asset as of the date hereof, would have otherwise been classified as a
Tyco Retained Asset.  No Asset shall be
deemed a Tyco Retained Asset solely as a result of this clause (v) unless a
claim with respect thereto is made by Tyco within the applicable time period(s)
established by Section 2.6(d);

(vi)          the Assets set forth on Schedule 1.1(203)(vi)
and any and all Assets that are expressly contemplated by this Agreement or any
Ancillary

 

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Agreement as Assets which
have been or are to be Transferred to Tyco or any other member of the Tyco
Group; and

(vii)         any and all furnishings and office
equipment located at a physical site of which the ownership or leasehold
interest is being Transferred to Tyco; provided, that personal computers
shall be Transferred to the Party who, following the Relevant Time, employs the
applicable employee who, prior to the Relevant Time, used such personal
computer.

Notwithstanding the
foregoing, the Tyco Retained Assets shall not include:

(x)            any Assets that are expressly contemplated by this
Agreement or any Ancillary Agreement (or the Schedules hereto or thereto) as
Assets to be retained by or Transferred to any member of the Healthcare Group
or Electronics Group, as the case may be; or

(y)           the Assets set forth or described on Schedule 1.1(191)
(in the definition of Tyco Contingent Assets).

In the event of any
inconsistency or conflict which may arise in the application or interpretation
of any of the foregoing provisions, for the purpose of determining what is and
is not a Tyco Retained Asset, any item explicitly included on a Schedule
referred to in this definition shall take priority over any provision of the
text hereof, and clause (v) shall take priority over clause (iii) of this Section
1.1(203) and over clause (viii) of Section 1.1(49) in the definition
of Electronics Assets and clause (viii) of Section 1.1(97) in the
definition of Healthcare Assets.

(204)       “Tyco Retained Business” shall
mean (i) the business and operations of the Fire and Security and Engineered
Products and Services segments of Tyco as described in the Tyco Registration
Statement  for the fiscal year ended
September 29, 2006, (ii) any other business conducted primarily through
the use of the Tyco Retained Assets prior to the Relevant Time and (iii) the
businesses and operations of Business Entities acquired or established by or
for Tyco or any of its Subsidiaries in connection with the operation of the Tyco
Retained Business after the date of this Agreement.

(205)       “Tyco Retained Contracts” shall
mean the following Contracts to which Tyco or any of its Affiliates is a party
or by which it or any of its Affiliates or any of their respective Assets is
bound, whether or not in writing, except for any such Contract or part thereof
(i) that is expressly contemplated not to be Transferred by any member of the
Healthcare Group or the Electronics Group to Tyco or (ii) that is expressly
contemplated to be Transferred to (or remain with) any member of the Healthcare
Group or the Electronics Group, in each case, pursuant to any provision of this
Agreement or any Ancillary Agreement:

(i)            any Contract entered into in the
name of, or expressly on behalf of, any division, business unit or member of
the Tyco Group;

(ii)           any Contract that relates primarily
to the Tyco Retained Business;

 

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(iii)          any Contract representing capital or
operating equipment lease obligations reflected on the Tyco Balance Sheet;

(iv)          any Contract or part thereof, that is
otherwise expressly contemplated pursuant to this Agreement (including pursuant
to Section 2.2(c)) or any of the Ancillary Agreements to be
assigned to any member of the Tyco Group; and

(v)           any guarantee, indemnity,
representation or warranty of or in favor of any member of the Tyco Group.

(206)       “Tyco Retained Liabilities” shall
mean:

(i)            any and all Liabilities that are
expressly contemplated by this Agreement or any Ancillary Agreement (or the
Schedules hereto or thereto, including Schedule 1.1(206)(i) hereto) as
Liabilities to be Assumed by any member of the Tyco Group, and all obligations
and Liabilities expressly Assumed by any member of the Tyco Group under this
Agreement or any of the Ancillary Agreements;

(ii)           any and all Liabilities primarily
relating to, arising out of or resulting from:

(A)          the operation or conduct of the Tyco
Retained Business, as conducted at any time prior to, on or after the Effective
Time (including any Liability relating to, arising out of or resulting from any
act or failure to act by any director, officer, employee, agent or
representative (whether or not such act or failure to act is or was within such
Person’s authority));

(B)           the operation or conduct of any
business conducted by any member of the Tyco Group at any time after the
Effective Time (including any Liability relating to, arising out of or
resulting from any act or failure to act by any director, officer, employee,
agent or representative (whether or not such act or failure to act is or was
within such Person’s authority)); or

(C)           any Tyco Retained Assets, whether
arising before, on or after the Effective Time;

(iii)          any Liabilities to the extent relating
to, arising out of or resulting from any terminated or divested Business
Entity, business or operation (A) formerly and primarily owned or managed by or
associated with any member of the Tyco Group as it relates to the Tyco Retained
Business or (B) set forth on Schedule 1.1(206)(iii);

(iv)          any Liabilities relating to employees
of Tyco who do not become either a Healthcare Employee or Electronics Employee,
in each case, immediately following the Effective Time and Former Tyco
Employees;

 

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(v)           any Liabilities relating to, arising
out of or resulting from any indebtedness (including debt securities and
asset-backed debt) of any member of the Tyco Group or indebtedness (regardless
of the issuer of such indebtedness) exclusively relating to the Tyco Retained
Business or any indebtedness (regardless of the issuer of such indebtedness)
secured exclusively by any of the Tyco Retained Assets (including any
Liabilities relating to, arising out of or resulting from a claim by a holder
of any such indebtedness, in its capacity as such);

(vi)          Specified Shared Expenses to the extent
provided in Section 5.5; and

(vii)         all Liabilities reflected as
Liabilities or obligations on the Tyco Balance Sheet or the accounting records
supporting such balance sheet, and all Liabilities arising or Assumed after the
date of such balance sheet which, had they arisen or been Assumed on or before
such date and been retained as of such date, would have been reflected on such
balance sheet if prepared on a consistent basis, subject to any discharge of
such Liabilities subsequent to the date of the Tyco Balance Sheet.

Notwithstanding anything to
the contrary herein, the Tyco Retained Liabilities shall not include:

(x)            any Liabilities that are expressly contemplated by this
Agreement or any Ancillary Agreement (or the Schedules hereto or thereto) as
Liabilities to be retained or Assumed by any member of the Healthcare Group or
the Electronics Group or for which any such Party is liable;

(y)           any Contracts expressly Assumed by any member of the
Healthcare Group or the Electronics Group under this Agreement or any of the
Ancillary Agreements; and

(z)            any Liabilities expressly discharged pursuant to Section
2.4 of this Agreement.

In the event of any
inconsistency or conflict which may arise in the application or interpretation
of any of the foregoing provisions, for the purpose of determining what is and
is not a Tyco Liability, any item explicitly included on a Schedule referred to
in this definition shall take priority over any provision of the text hereof,
and clause (ii) shall take priority over clause (vii) of this Section 1.1(206)
and over clause (viii) of Section 1.1(116) in the definition of
Healthcare Liabilities and clause (vii) of Section 1.1(206) in the
definition of Tyco Retained Liabilities.

For the sake of clarity, no
Liability shall be a Tyco Retained Liability solely as a result of Tyco being
named as party to or in any Action due to Tyco’s status as the remaining and
legacy Business Entity, or as a result of its status as the direct or indirect
stockholder of any Business Entity (unless such entity is (A) a member of the
Tyco Group and (B) such Liability primarily relates to the Tyco Retained
Business or

 

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otherwise
fits within one of the categories of Tyco Retained Liabilities in clauses (i)
through (vii) above).

(207)       “Tyco Retained Pension Plans”
shall have the meaning set forth in Section 6.5(c)(i).

(208)       “Tyco Retained Plans” shall mean
the employee benefit plans, policies, programs, payroll practices, and
arrangements retained by the Tyco Group under this Agreement for the benefit of
Tyco Employees and, where applicable, Former Tyco Employees.

(209)       “Tyco Retained Savings Plans”
means the savings plans sponsored by Tyco described in Section 6.6(c).

(210)       “Tyco Retiree
Medical Plans” shall have the meaning set forth in Section 6.7.

(211)       “2007 Internal Control Audit and
Management Assessments” shall have the meaning set forth in Section 5.3(a).

(212)       “2007 Healthcare Stock
and Incentive Plan” shall have the meaning set forth in Section 6.1(a)(iv).

(213)       “2007 Electronics Stock
and Incentive Plan” shall have the meaning set forth in Section 6.1(b)(iv).

Section 1.2             References; Interpretation.  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, Annexes, Exhibits and Schedules shall be deemed references to
Articles and Sections of, and Annexes, 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.

Section 1.3             Effective Time; Suspension.

(a)           This Agreement shall be effective as
of the Effective Time.

(b)           Notwithstanding Section 1.3(a)
above, as between any of the Parties that are Affiliates, the provisions of,
and the obligations under, this Agreement shall be suspended as between such
Parties until the applicable Relevant Time, other than for Sections 2.1,
2.2, 2.3 and 2.7 each of which will be effective as of the
Effective Time.

 

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ARTICLE II

THE SEPARATION

Section 2.1             General.  Subject to the terms and conditions of this
Agreement, the Parties shall use, and shall cause their respective Affiliates
to use, their respective best efforts to consummate the transactions
contemplated hereby, a portion of which have already been implemented prior to
the date hereof.  It is the intent of the
Parties that after consummation of the transactions contemplated hereby Tyco
shall be restructured, to the extent necessary, such that following the
consummation of such restructuring, subject to Section 2.6, (i) all
of Tyco’s and its Subsidiaries’ right, title and interest in and to the Healthcare
Assets will be owned or held by a member of the Healthcare Group, the Healthcare
Business will be conducted by the members of the Healthcare Group and all of the
Healthcare Liabilities will be Assumed directly or indirectly by (or remain
with) a member of the Healthcare Group, (ii) all of Tyco’s and its Subsidiaries’
right, title and interest in and to the Electronics Assets will be owned or
held by a member of the Electronics Group, the Electronics Business will be
conducted by the members of the Electronics Group and all of the Electronics
Liabilities will be Assumed directly or indirectly by (or remain with) a member
of the Electronics Group, and (iii) all of Tyco’s and its Subsidiaries’ right,
title and interest in and to the Tyco Retained Assets will be owned or held by
a member of the Tyco Group, the Tyco Retained Business will be conducted by the
members of the Tyco Group and all of the Tyco Retained Liabilities will be Assumed
directly or indirectly by (or remain with) a member of the Tyco Group.

Section
2.2             Transfer of Assets.

(a)           On or prior to the Effective Time and
to the extent not already completed (and it being understood that some of such
Transfers may occur following the Effective Time and prior to the applicable
Relevant Time):

(i)            Tyco shall, on behalf of itself and
its Subsidiaries, as applicable, transfer, contribute, assign and convey or
cause to be transferred, contributed, assigned and conveyed (“Transfer”)
to (i) Healthcare or another member of the Healthcare Group all of its and its
Subsidiaries’ right, title and interest in and to the Healthcare Assets and
(ii) Electronics or another member of the Electronics Group all of its and its
Subsidiaries’ right, title and interest in and to the Electronics Assets;

(ii)           Healthcare shall, on behalf of itself
and its Subsidiaries, as applicable, Transfer to (i) Tyco or another member of
the Tyco Group all of its and its Subsidiaries’ right, title and interest in
and to the Tyco Retained Assets, and (ii) Electronics or another member of the Electronics
Group all of its and its Subsidiaries’ right, title and interest in and to the Electronics
Assets; and

(iii)          Electronics shall, on behalf of itself
and its Subsidiaries, as applicable, Transfer to (i) Tyco or another member of
the Tyco Group all of its and its Subsidiaries’ right, title and interest in
and to the Tyco Retained Assets,

 

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and (ii) Healthcare or another
member of the Healthcare Group all of its and its Subsidiaries’ right, title
and interest in and to the Healthcare Assets.

(b)           [Reserved]

(c)           Treatment of Shared Contracts.  Without limiting the generality of the
obligations set forth in Section 2.2(a) and 2.2(b):

(i)            Unless the Parties otherwise agree
or the benefits of any Contract described in this Section are expressly
conveyed to the applicable Party pursuant to an Ancillary Agreement, (A) any
Contract that is (1) listed on Schedule 2.2(c), (2) a Tyco
Retained Asset but inures in part to the benefit or burden of any member of the
Healthcare Group or the Electronics Group, as the case may be, (3) a Healthcare
Asset but inures in part to the benefit or burden of any member of the Tyco
Group or the Electronics Group, as the case may be or (4) an Electronics Asset
but inures in part to the benefit or burden of any member of the Tyco Group or
the Healthcare Group, as the case may be (each, a “Shared Contract”),
shall be assigned in part to the applicable member(s) of the applicable Group,
if so assignable, or appropriately amended prior to, on or after the Effective
Time, so that each Party or the members of their respective Groups shall be
entitled to the rights and benefits, and shall Assume the related portion of
any Liabilities, inuring to their respective Businesses; provided, however,
that (x) in no event shall any member of any Group be required to assign (or
amend) any Shared Contract in its entirety or to assign a portion of any Shared
Contract (including any Policy) which is not assignable (or cannot be amended)
by its terms (including any terms imposing consents or conditions on an
assignment where such consents or conditions have not been obtained or
fulfilled) and (y) if any Shared Contract cannot be so partially assigned by
its terms or otherwise, or cannot be amended or if such assignment or amendment
would impair the benefit the parties thereto derive from such Shared Contract,
the Parties shall, and shall cause each of their respective Subsidiaries to,
take such other reasonable and permissible actions to cause a member of the Healthcare
Group, the Electronics Group or the Tyco Group, as the case may be, to receive
the benefit of that portion of each Shared Contract that relates to the Healthcare
Business, the Electronics Business or the Tyco Retained Business, as the case
may be (in each case, to the extent so related) as if such Shared Contract had
been assigned to (or amended to allow) a member of the applicable Group
pursuant to this Section 2.2 and to bear the burden of the
corresponding Liabilities (including any Liabilities that may arise by reason
of such arrangement) as if such Liabilities had been Assumed by a member of the
applicable Group pursuant to this Section 2.2.

(ii)           Each of Tyco, Healthcare and Electronics
shall, and shall cause the members of its Group to, (A) treat for all Income
Tax purposes the portion of each Shared Contract inuring to its respective
Businesses as Assets owned by, and/or Liabilities of, as applicable, such Party
not later than the applicable Relevant Time and (B) neither report nor take any
Income Tax position (on a Tax Return or otherwise) inconsistent with such
treatment (unless required by a change in

 

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applicable Tax Law or
good faith resolution of a Tax Contest relating to Income Taxes).

(iii)          Nothing in this Section 2.2(c)
shall require any member of any Group to make any material payment (except to
the extent advanced, Assumed or agreed in advance to be reimbursed by any
member of the other Group or as otherwise provided on Schedule 1.1(15)(i)),
incur any material obligation or grant any material concession for the benefit
of any member of any other Group in order to effect any transaction contemplated
by this Section 2.2(c).

(d)           Consents.  The Parties shall use their best efforts to
obtain the required Consents to Transfer any Assets, Contracts, licenses,
permits and authorizations issued by any Governmental Entity or parts thereof
as contemplated by this Agreement.

Section 2.3             Assumption and Satisfaction of
Liabilities.  Except as otherwise
specifically set forth in any Ancillary Agreement from and after the Effective
Time, (a) Tyco shall, or shall cause a member of the Tyco Group to, accept,
assume (or, as applicable, retain) and perform, discharge and fulfill, in
accordance with their respective terms (“Assume”), all of the Tyco
Retained Liabilities, (b) Healthcare shall, or shall cause a member of the Healthcare
Group to, Assume all the Healthcare Liabilities and (c) Electronics shall, or
shall cause a member of the Electronics Group to, Assume all the Electronics
Liabilities, in each case, regardless of (i) when or where such Liabilities
arose or arise, (ii) whether the facts upon which they are based occurred prior
to, on or subsequent to the Effective Time, (iii) where or against whom such
Liabilities are asserted or determined or (iv) whether arising from or alleged
to arise from negligence, recklessness, violation of Law, fraud or misrepresentation
by any member of the Tyco Group, the Healthcare Group or the Electronics Group,
as the case may be, or any of their past or present respective directors,
officers, employees, agents, Subsidiaries or Affiliates.

Section
2.4             Intercompany Accounts.

(a)           Except as set forth in Section 8.1(b),
all intercompany receivables, payables and loans (other than receivables,
payables and loans otherwise specifically provided for under this Agreement,
under any Ancillary Agreement or under any Continuing Arrangements as set forth
on Schedule 1.1(28), including payables created or required hereby or by
any Ancillary Agreement or any Continuing Arrangements) treated as debt for
U.S.  federal income Tax purposes by the
Parties, if any, (a) between any member of the Tyco Group, on the one hand, and
any member of the Healthcare Group or the Electronics Group, on the other hand
or (b) between any member of the Healthcare Group, on the one hand, and any
member of the Electronics Group, on the other hand, in each case, which exist
and are reflected in the accounting records of the relevant Parties as of the
applicable Relevant Time shall be promptly eliminated as discovered, subject to
the relevant Parties’ agreement (I) as to the most cost efficient means of
effecting such elimination, and (II) to share any incremental costs arising as
a result of such elimination; provided, however, that in any
event any such means of elimination shall place the Parties in the same
position as if the means were economically equivalent to an elimination of such
amount as of the Relevant Time; and, provided  further,
that if the relevant Parties cannot agree on a means of elimination within thirty
(30) days from the

 

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date on which all
relevant Parties have notice of the discovery of such item, then the item shall
be deemed eliminated without further action. 
Except as set forth in Section 8.1(b), all intercompany
balances not treated as debt for U.S. 
federal income Tax purposes by the Parties, including in respect of any
cash balances, any cash balances representing deposited checks or drafts for
which only a provisional credit has been allowed or any cash held in any
centralized cash management system, (a) between any member of the Tyco Group,
on the one hand, and any member of the Healthcare Group or the Electronics
Group, on the other hand or (b) between any member of the Healthcare Group, on
the one hand, and any member of the Electronics Group, on the other hand, in
each case, which exist and are reflected in the accounting records of the
relevant Parties as of the applicable Relevant Time shall be promptly
eliminated as discovered, subject to the relevant Parties’ agreement (I) as to
the most cost efficient means of effecting such elimination, and (II) to share
any incremental costs arising as a result of such elimination; provided,
however, that in any event any such means of elimination shall place the
Parties in the same position as if the means were economically equivalent to an
elimination of such amount as of the Relevant Time; and, provided
further, that if the relevant Parties cannot agree on a means of
elimination within thirty (30) days from the date on which all relevant Parties
have notice of the discovery of such item, then the item shall be deemed eliminated
without further action.

(b)           As between any two Parties (and the
members of their respective group) all payments and reimbursements received
after the applicable Relevant Time by any Party (or member of its Group) that
relate to a Business, Asset or Liability of another Party (or member of its
Group), shall be held by such Party in trust for the use and benefit of the
Party entitled thereto (at the expense of the Party entitled thereto) and,
promptly upon receipt by such Party of any such payment or reimbursement, such
Party shall pay or shall cause the applicable member of its Group to pay over
to the applicable Party the amount of such payment or reimbursement without
right of set-off.

Section
2.5             Limitation of Liability.

(a)           Except as provided in Section 3.5,
no Party shall have any Liability to any other Party in the event that any
information exchanged or provided pursuant to this Agreement which is an
estimate or forecast, or which is based on an estimate or forecast, is found to
be inaccurate.

(b)           No Party or any Subsidiary thereof
shall be liable to any other Party or any Subsidiary of any other Party based
upon, arising out of or resulting from any Contract, arrangement, course of
dealing or understanding existing on or prior to the Relevant Time (other than
this Agreement, any Ancillary Agreement, any Continuing Arrangements, any
Contract entered into in connection herewith or in order to consummate the
transactions contemplated hereby or thereby or by the Plan of Separation or any
Contract specified on Schedule 2.5) and each Party hereby
terminates any and all Contracts, arrangements, courses of dealing or
understandings between or among it and any other Party effective as of the
Relevant Time (other than this Agreement or any Ancillary Agreement, any
Contract entered into in connection herewith or in order to consummate the
transactions contemplated hereby or thereby or by the Plan of Separation or any
Contract specified on

 

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Schedule 2.5), provided, however, that
with respect to any Contract, arrangement, course of dealing or understanding
discovered after the Relevant Time, the relevant Parties agree to terminate
such Contract, arrangement, course of dealing or understanding subject to the
relevant Parties’ agreement (I) as to the most cost efficient means of
effecting such cancellation, release and waiver and (II) to share any
incremental costs arising as a result of such resolution; provided, however,
that in any event any such means of effecting such cancellation, release and
waiver shall place the Parties in the same position as if the means were
economically equivalent to an elimination of such amount as of the Relevant
Time; and, provided  further, that if the relevant Parties
cannot agree on a resolution within thirty (30) days from the date that all
relevant Parties have notice of the discovery of any such Contract,
arrangement, course of dealing or understanding, then such item shall be deemed
eliminated without further action of the Parties.  It is the Parties intent that no such
terminated Contract, arrangement, course of dealing or understanding (including
any provision thereof which purports to survive termination) shall be of any
further force or effect after the applicable Relevant Time, or, where
applicable, after the resolution described in this Section 2.5 following
discovery of such Contract, arrangement, course of dealing or understanding after
the Relevant Time.

Section 2.6             Transfers Not Effected On or Prior
to the Effective Time; Transfers Deemed Effective as of the Effective Time.

(a)           To the extent that any Transfers
contemplated by this Article II shall not have been consummated on or
prior to the Effective Time, the Parties shall use best efforts to effect such
Transfers as promptly following the Effective Time as shall be practicable.  Nothing herein shall be deemed to require the
Transfer of any Assets or the Assumption of any Liabilities which by their
terms or operation of Law cannot be Transferred; provided, however,
that the Parties and their respective Subsidiaries shall cooperate and use best
efforts to seek to obtain any necessary Consents or Governmental Approvals for
the Transfer of all Assets and Assumption of all Liabilities contemplated to be
Transferred and Assumed pursuant to this Article II.  In the event that any such Transfer of Assets
or Assumption of Liabilities has not been consummated, from and after the
Effective Time (i) the Party retaining such Asset shall thereafter hold such Asset
for the use and benefit of the Party entitled thereto (at the expense of the
Person entitled thereto) and (ii) the Party intended to Assume such Liability
shall, or shall cause the applicable member of its Group to, pay or reimburse
the Party retaining such Liability for all amounts paid or incurred in
connection with the retention of such Liability.  In addition, the Party retaining such Asset
or Liability shall, insofar as reasonably possible and to the extent permitted
by applicable Law, treat such Asset or Liability in the ordinary course of
business in accordance with past practice and take such other actions as may be
reasonably requested by the Party to which such Asset is to be Transferred or
by the Party Assuming such Liability in order to place such Party, insofar as
reasonably possible, in the same position as if such Asset or Liability had
been Transferred or Assumed as contemplated hereby and so that all the benefits
and burdens relating to such Asset or Liability, including possession, use,
risk of loss, potential for gain, and dominion, control and command over such
Asset or Liability, are to inure from and after the Effective Time to the
member or members of the Tyco Group, the Healthcare Group or the Electronics
Group entitled to the receipt of such Asset or required to Assume such

 

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Liability.  In furtherance of the foregoing, the Parties
agree that, as of the Effective Time, each Party shall be deemed to have
acquired complete and sole beneficial ownership over all of the Assets,
together with all rights, powers and privileges incident thereto, and shall be
deemed to have Assumed in accordance with the terms of this Agreement all of
the Liabilities, and all duties, obligations and responsibilities incident
thereto, which such Party is entitled to acquire or required to Assume pursuant
to the terms of this Agreement.

(b)           If and when the Consents,
Governmental Approvals and/or conditions, the absence or non-satisfaction of
which caused the deferral of Transfer of any Asset or deferral of the
Assumption of any Liability pursuant to Section 2.6(a), are
obtained or satisfied, the Transfer, assignment, Assumption or novation of the
applicable Asset or Liability shall be effected in accordance with and subject
to the terms of this Agreement and/or the applicable Ancillary Agreement.

(c)           The Party retaining any Asset or
Liability due to the deferral of the Transfer of such Asset or the deferral of
the Assumption of such Liability pursuant to Section 2.6(a) or
otherwise shall not be obligated, in connection with the foregoing, to expend
any money unless the necessary funds are advanced, assumed, or agreed in
advance to be reimbursed by the Party entitled to such Asset or the Person
intended to be subject to such Liability, other than reasonable attorneys’ fees
and recording or similar fees, all of which shall be promptly reimbursed by the
Party entitled to such Asset or the Person intended to be subject to such
Liability.

(d)           On and prior to the eighteen (18)
month   anniversary following the applicable Relevant
Time, if any Party owns any Asset, that, although not Transferred pursuant to
this Agreement, is agreed by such Party and the other applicable Party in their
good faith judgment to be an Asset that more properly belongs to the other
Party or a Subsidiary of the other Party, or an Asset that such other Party or
Subsidiary was intended to have the right to continue to use (other than (for
the avoidance of doubt), as between any two Parties, for any Asset acquired
from an unaffiliated third party by a Party or member of such Party’s Group
following the applicable Relevant Time), then the Party owning such Asset
shall, as applicable (i) Transfer any such Asset to the Party identified as the
appropriate transferee and following such Transfer, such Asset shall be a Healthcare
Asset, Electronics Asset or Tyco Retained Asset, as the case may be, or (ii)
grant such mutually agreeable rights with respect to such Asset to permit such
continued use, subject to, and consistent with this Agreement, including with
respect to Assumption of associated Liabilities, in all events, subject to the
relevant Parties’ agreement (I) as to the most cost efficient means of
effecting such Transfer or grant of rights and (II) to share any incremental
costs arising as a result of such Transfer; provided, that if the
relevant Parties cannot agree on a means of effecting the Transfer or grant of
rights within thirty (30) days from the date that all relevant Parties have
notice of the discovery of such Asset, then the Asset shall be immediately
Transferred or such rights shall be immediately granted.

(e)           After the Relevant Time, each Party
may receive mail, packages and other communications properly belonging to
another Party.  Accordingly, at all times
after the

 

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Relevant Time, each Party
authorizes the other applicable Party to receive and open all mail, packages
and other communications received by such Party, and to the extent that they do
not relate to the business of the receiving Party, the receiving Party shall
promptly deliver such mail, packages or other communications (or, in case the
same relate to both businesses, copies thereof) to the other Party as provided
for in Section 12.6.  The
provisions of this Section 2.6(e) are not intended to, and shall
not, be deemed to constitute an authorization by any Party to permit the other
to accept service of process on its behalf and no Party is or shall be deemed
to be the agent of any other Party for service of process purposes.

(f)            With respect to Assets and
Liabilities described in Section 2.6(a), each of Tyco, Healthcare and Electronics
shall, and shall cause the members of its respective Group to, (i) treat for
all Income Tax purposes (A) the deferred Assets as assets having been
Transferred to and owned by the Party entitled to such Assets not later than
the applicable Relevant Time and (B) the deferred Liabilities as liabilities
having been Assumed and owned by the Person intended to be subject to such
Liabilities not later than the applicable Relevant Time and (ii) neither report
nor take any Income Tax position (on a Tax Return or otherwise) inconsistent
with such treatment (unless required by a change in applicable Tax Law or good
faith resolution of a Tax Contest relating to Income Taxes).

Section 2.7             Conveyancing and Assumption
Instruments.  In connection with, and
in furtherance of, the Transfers of Assets and the acceptance and Assumptions
of Liabilities contemplated by this Agreement, the Parties shall execute or
cause to be executed, on or prior to the Relevant Time, by the appropriate
entities, the Conveyancing and Assumption Instruments necessary to evidence the
valid and effective Assumption by the applicable Party of its Assumed
Liabilities and the valid Transfer to the applicable Party or member of such
Party’s Group of all right, title and interest in and to its accepted Assets,
in substantially the form contemplated hereby for Transfers and Assumptions to
be effected pursuant to New York Law or the Laws of one of the other states of
the United States or, if not appropriate for a given Transfer, and for
Transfers to be effected pursuant to non-U.S. 
Laws, in such other form as the Parties shall reasonably agree, including
the Transfer of real property with deeds as may be appropriate.  The Transfer of capital stock shall be
effected by means of executed stock powers and notation on the stock record
books of the corporation or other legal entities involved, or by such other
means as may be required in any non-U.S. 
jurisdiction to Transfer title to stock and, only to the extent required
by applicable Law, by notation on public registries.

Section
2.8             Further Assurances.

(a)           In addition to and without limiting
the actions specifically provided for elsewhere in this Agreement, including Section 2.6,
each of the Parties shall cooperate with each other and use (and will cause
their respective Subsidiaries and Affiliates to use) best efforts, on and after
the Effective Time, to take, or to cause to be taken, all actions, and to do,
or to cause to be done, all things reasonably necessary on its part under
applicable Law or contractual obligations to consummate and make effective the
transactions contemplated by this Agreement and the Ancillary Agreements.

 

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(b)           Without limiting the foregoing, on
and after the Effective Time, each Party shall cooperate with the other
Parties, and without any further consideration, but at the expense of the
requesting Party from and after the Effective Time, to execute and deliver, or
use best efforts to cause to be executed and delivered, all instruments,
including instruments of Transfer, and to make all filings with, and to obtain
all Consents and/or Governmental Approvals, any permit, license, Contract,
indenture or other instrument (including any Consents or Governmental
Approvals), and to take all such other actions as such Party may reasonably be
requested to take by any other Party from time to time, consistent with the
terms of this Agreement and the Ancillary Agreements, in order to effectuate
the provisions and purposes of this Agreement and the Ancillary Agreements and
the Transfers of the applicable Assets and the assignment and Assumption of the
applicable Liabilities and the other transactions contemplated hereby and
thereby.  Without limiting the foregoing,
each Party will, at the reasonable request, cost and expense of any other
Party, take such other actions as may be reasonably necessary to vest in such
other Party good and marketable title to the Assets allocated to such Party
under this Agreement or any of the Ancillary agreements, free and clear of any
Security Interest, if and to the extent it is practicable to do so.

Section
2.9             Novation of Liabilities.

(a)           Each Party, at the request of another
Party, shall use best efforts to obtain, or to cause to be obtained, any
Consent, substitution or amendment required to novate or assign all obligations
under Contracts, licenses and other obligations or Liabilities for which a
member of such Party’s Group and a member of another Party’s Group are jointly
or severally liable and that do not constitute Liabilities of such other Party
as provided in this Agreement (such other Party, the “Other Party”), or
to obtain in writing the unconditional release of all parties to such
arrangements (other than any member of the Group who Assumed or retained such
Liability as set forth in this Agreement), so that, in any such case, the
members of the applicable Group will be solely responsible for such
Liabilities; provided, however, that no Party shall be obligated
to pay any consideration therefor to any third party from whom any such
Consent, substitution or amendment is requested (unless such Party is fully
reimbursed by the requesting Party).

(b)           If the Parties are unable to obtain,
or to cause to be obtained, any such required Consent, release, substitution or
amendment, the Other Party or a member of such Other Party’s Group shall
continue to be bound by such Contract, license or other obligation that does
not constitute a Liability of such Other Party and, unless not permitted by Law
or the terms thereof, as agent or subcontractor for such Party, the Party or
member of such Party’s Group who Assumed or retained such Liability as set
forth in this Agreement (the “Liable Party”) shall, or shall cause a
member of its Group to, pay, perform and discharge fully all the obligations or
other Liabilities of such Other Party or member of such Other Party’s Group
thereunder from and after the Effective Time. 
The Liable Party shall indemnify each Other Party and hold each of them
harmless against any Liabilities (other than Liabilities of such Other Party)
arising in connection therewith; provided, that the Liable Party shall
have no obligation to indemnify any Other Party with respect to any matter to
the extent that such Other Party has engaged in any knowing violation of Law,
fraud or misrepresentation in connection therewith.  The Other Party

 

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shall, without further
consideration, promptly pay and remit, or cause to be promptly paid or
remitted, to the Liable Party or to another member of the Liable Party’s Group,
all money, rights and other consideration received by it or any member of its
Group in respect of such performance by the Liable Party (unless any such
consideration is an Asset of such Other Party pursuant to this Agreement).  If and when any such Consent, release,
substitution or amendment shall be obtained or such agreement, lease, license
or other rights or obligations shall otherwise become assignable or able to be
novated, the Other Party shall promptly Transfer all rights, obligations and
other Liabilities thereunder of any member of such Other Party’s Group to the
Liable Party or to another member of the Liable Party’s Group without payment
of any further consideration and the Liable Party, or another member of such
Liable Party’s Group, without the payment of any further consideration, shall
Assume such rights and Liabilities.

(c)           If the Liable Party (i) suffers a
downgrade to its senior debt credit rating to below BB (as rated by Standard
& Poor’s) or (ii) no longer has its debt securities rated by any nationally
recognized credit rating agencies, then, upon the demand of the Other Party,
such Liable Party shall be required to post an irrevocable letter of credit or
similar security obligation reasonably acceptable to the Other Party in an
amount reasonably necessary to provide security to the Other Party for the
Liable Party’s obligations pursuant to Section 2.9(b); provided, however,
that the foregoing shall not apply with respect to Assumed Tyco Contingent
Liability.  For the avoidance of doubt,
the posting of such a letter of credit or similar security obligation shall in
no event relieve the issuing Party’s obligations pursuant to Section 2.9(b),
and shall not result in a cap or limitation on such Party’s Liabilities with
respect thereto.

Section
2.10           Guarantees.

(a)           Except for those guarantees set forth
on Schedule 2.10(a) where Tyco shall remain as guarantor and the
applicable Party shall indemnify and hold harmless the Tyco Indemnitees for any
Indemnifiable Loss arising from or relating thereto (in accordance with the
provisions of Article VIII) or as otherwise specified in any Ancillary
Agreement on or prior to the Effective Time or as soon as practicable
thereafter, (i) Tyco shall (with the reasonable cooperation of the relevant
beneficiary) use its best efforts to have any member of the Healthcare Group
and/or the Electronics Group removed as guarantor of or obligor for any Tyco
Retained Liability, including in respect of those guarantees set forth on Schedule
2.10(a)(i), to the extent that they relate to Tyco Retained Liabilities, (ii)
Healthcare shall (with the reasonable cooperation of the relevant beneficiary)
use its best efforts to have any member of the Tyco Group and/or the Electronics
Group removed as guarantor of or obligor for any Healthcare Liability,
including in respect of those guarantees set forth on Schedule 2.10(a)(ii),
to the extent that they relate to Healthcare Liabilities and (iii) Electronics
shall (with the reasonable cooperation of the relevant beneficiary) use its best
efforts to have any member of the Tyco Group and/or the Healthcare Group
removed as guarantor of or obligor for any Electronics Liability, including in
respect of those guarantees set forth on Schedule 2.10(a)(iii), to
the extent that they relate to Electronics Liabilities.

 

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(b)           On or prior to the Relevant Time, to
the extent required to obtain a release from a guaranty (a “Guaranty Release”):

(i)            of any member of the Tyco Group, Healthcare
and/or Electronics shall, as applicable, execute a guaranty agreement in the
form of the existing guaranty, except to the extent that such existing guaranty
contains representations, covenants or other terms or provisions either (A)
with which Healthcare or Electronics, as the case may be, would be reasonably
unable to comply or (B) which would be reasonably expected to be breached;

(ii)           of any member of the Healthcare
Group, Tyco and/or Electronics, shall, as applicable, execute a guaranty
agreement in the form of the existing guaranty, except to the extent that such
existing guaranty contains representations, covenants or other terms or
provisions either (A) with which Tyco or Electronics, as the case may be, would
be reasonably unable to comply or (B) which would be reasonably expected to be
breached; and

(iii)          of any member of the Electronics
Group, Tyco and/or Healthcare shall, as applicable, execute a guaranty
agreement in the form of the existing guaranty, except to the extent that such
existing guaranty contains representations, covenants or other terms or
provisions either (A) with which Tyco or Healthcare, as the case may be, would
be reasonably unable to comply or (B) which would be reasonably expected to be
breached.

(c)           If Tyco, Healthcare or Electronics is
unable to obtain, or to cause to be obtained, any such required removal as set
forth in clauses (a) and (b) of this Section 2.10, (i) the relevant
beneficiary shall indemnify and hold harmless the guarantor or obligor for any
Indemnifiable Loss arising from or relating thereto (in accordance with the
provisions of Article VIII) and shall or shall cause one of its
Subsidiaries, as agent or subcontractor for such guarantor or obligor to pay,
perform and discharge fully all the obligations or other Liabilities of such
guarantor or obligor thereunder and (ii) each of Tyco, Healthcare and Electronics,
on behalf of themselves and the members of their respective Groups, agree not
to renew or extend the term of, increase its obligations under, or Transfer to
a third party, any loan, guarantee, lease, contract or other obligation for
which another Party or member of such Party’s Group is or may be liable unless
all obligations of such other Party and the other members of such Party’s Group
with respect thereto are thereupon terminated by documentation reasonably
satisfactory in form and substance to such Party; provided, however,
with respect to leases, in the event a Guaranty Release is not obtained and the
relevant beneficiary wishes to extend the term of such guaranteed lease, then
such beneficiary shall have the option of extending the term if it provides
such security as is reasonably satisfactory to the guarantor under such
guaranteed lease.

Section 2.11           Disclaimer of Representations and
Warranties.  EACH OF TYCO (ON BEHALF
OF ITSELF AND EACH MEMBER OF THE TYCO GROUP), HEALTHCARE (ON BEHALF OF ITSELF
AND EACH MEMBER OF THE HEALTHCARE GROUP), AND ELECTRONICS (ON BEHALF OF ITSELF
AND EACH MEMBER OF THE ELECTRONICS

 

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GROUP) UNDERSTANDS AND AGREES THAT, EXCEPT AS
EXPRESSLY SET FORTH HEREIN, IN ANY ANCILLARY AGREEMENT OR IN ANY CONTINUING
ARRANGEMENT, NO PARTY TO THIS AGREEMENT, ANY ANCILLARY AGREEMENT OR ANY OTHER
AGREEMENT OR DOCUMENT CONTEMPLATED BY THIS AGREEMENT, ANY ANCILLARY AGREEMENTS
OR OTHERWISE, IS REPRESENTING OR WARRANTING IN ANY WAY AS TO THE ASSETS,
BUSINESSES OR LIABILITIES CONTRIBUTED, TRANSFERRED OR ASSUMED AS CONTEMPLATED
HEREBY OR THEREBY, AS TO ANY CONSENTS OR GOVERNMENTAL APPROVALS REQUIRED IN
CONNECTION HEREWITH OR THEREWITH, AS TO THE VALUE OR FREEDOM FROM ANY SECURITY
INTERESTS OF, OR ANY OTHER MATTER CONCERNING, ANY ASSETS OF SUCH PARTY, OR AS
TO THE ABSENCE OF ANY DEFENSES OR RIGHT OF SETOFF OR FREEDOM FROM COUNTERCLAIM
WITH RESPECT TO ANY ACTION OR OTHER ASSET, INCLUDING ACCOUNTS RECEIVABLE, OF
ANY PARTY, OR AS TO THE LEGAL SUFFICIENCY OF ANY CONTRIBUTION, ASSIGNMENT,
DOCUMENT, CERTIFICATE OR INSTRUMENT DELIVERED HEREUNDER TO CONVEY TITLE TO ANY
ASSET OR THING OF VALUE UPON THE EXECUTION, DELIVERY AND FILING HEREOF OR
THEREOF.  EXCEPT AS MAY EXPRESSLY BE SET
FORTH HEREIN OR IN ANY ANCILLARY AGREEMENT, ALL SUCH ASSETS ARE BEING
TRANSFERRED ON AN “AS IS,” “WHERE IS” BASIS (AND, IN THE CASE OF ANY REAL
PROPERTY, BY MEANS OF A QUITCLAIM OR SIMILAR FORM DEED OR CONVEYANCE) AND THE
RESPECTIVE TRANSFEREES SHALL BEAR THE ECONOMIC AND LEGAL RISKS THAT (I) ANY
CONVEYANCE SHALL PROVE TO BE INSUFFICIENT TO VEST IN THE TRANSFEREE GOOD TITLE,
FREE AND CLEAR OF ANY SECURITY INTEREST AND (II) ANY NECESSARY CONSENTS OR
GOVERNMENTAL APPROVALS ARE NOT OBTAINED OR THAT ANY REQUIREMENTS OF LAWS OR
JUDGMENTS ARE NOT COMPLIED WITH.

ARTICLE III

CERTAIN ACTIONS AT OR PRIOR TO THE DISTRIBUTIONS

Section
3.1             Certificate of
Incorporation; Bye-laws.

(a)           On or prior to the Healthcare
Distribution Date, all necessary actions shall be taken to adopt the form of
Certificate of Incorporation and Bye-laws filed by Healthcare with the
Commission as exhibits to the Healthcare Form 10.

(b)           On or prior to the Electronics
Distribution Date, all necessary actions shall be taken to adopt the form of
Certificate of Incorporation and Bye-laws filed by Electronics with the
Commission as exhibits to the Electronics Form 10.

Section
3.2             Directors.

(a)           On or prior to the Healthcare
Distribution Date, Tyco shall take all necessary action to cause the Board of
Directors of Healthcare to consist of the individuals identified in the Healthcare
Information Statement as director nominees of Healthcare.

 

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(b)           On or prior to the Electronics
Distribution Date, Tyco shall take all necessary action to cause the Board of
Directors of Electronics to consist of the individuals identified in the Electronics
Information Statement as director nominees of Electronics.

Section
3.3             Resignations.

(a)           On or prior to the Healthcare
Distribution Date, (i) Tyco shall cause all its employees and any employees of
its Affiliates (excluding (A) any employees of any member of the Healthcare
Group and (B) those individuals designated as audit officers  of Healthcare) to resign, effective
as of the Healthcare Distribution Date, from all positions as officers or
directors of any member of the Healthcare Group in which they serve, and (ii) Healthcare
shall cause all its employees and any employees of its Affiliates to resign,
effective as of the Healthcare Distribution Date, from all positions as
officers or directors of any members of the Tyco Group or the Electronics Group
in which they serve.

(b)           On or prior to the Electronics
Distribution Date, (i) Tyco shall cause all its employees and any employees of
its Affiliates (excluding (A) any employees of any member of the Electronics
Group and (B) those individuals designated as audit officers of Electronics) to
resign, effective as of the Electronics Distribution Date, from all positions
as officers or directors of any member of the Electronics Group in which they
serve, and (ii) Electronics shall cause all its employees and any employees of
its Affiliates to resign, effective as of the Electronics Distribution Date,
from all positions as officers or directors of any members of the Tyco Group or
the Healthcare Group in which they serve.

(c)           No Person shall be required by any
Party to resign from any position or office with another Party if such Person
is disclosed in the applicable Information Statement as the Person who is to
hold such position or office following the applicable Distribution.

Section
3.4             [Reserved]

Section 3.5             Cash Adjustments.

(a)           Subject to Section 3.5(c),
prior to the Final Distribution Date, either (i) Healthcare will transfer funds
to Tyco or (ii) Tyco will transfer funds to Healthcare, such that Healthcare’s
cash balance in its accounts shall equal at least $500 million (the “Healthcare
Cash Balance”).

(b)           Subject to Section 3.5(c),
prior to the Final Distribution Date, either (i) Electronics will transfer
funds to Tyco or (ii) Tyco will transfer funds to Electronics, such that
Electronics’ cash balance in its accounts shall equal at least $500 million
(the “Electronics Cash Balance”).

(c)           Notwithstanding Sections 3.5(a)
and (b), if on the Business Day prior to the Final Separation Date, Tyco’s
aggregate cash balance in its accounts is less than $1.7 billion (net of unpaid
Separation Expenses), then each of the Electronics Cash Balance and Healthcare
Cash Balance will be reduced by an amount equal to 50% of the amount

 

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by which Tyco’s aggregate
cash balance is below $1.7 billion (net of unpaid Separation Expenses).  In addition, each of the Healthcare Cash
Balance and the Electronics Cash Balance, shall be adjusted on a
dollar-for-dollar basis for the results or effect of any acquisition or
divestiture of any member of the Healthcare Group or the Electronics Group, as the
case may be, prior to the Final Distribution Date on the cash balance of
Healthcare or Electronics in its accounts.

(d)           Promptly following the Final
Distribution Date, and in any event not later than forty-five (45) days
following such Distribution Date, Healthcare and Electronics (each, a “Delivering
Party”) shall each prepare a statement of its Free Cash Flow from September
30, 2006 to its Distribution Date without giving effect to the transactions
contemplated hereby (a “Statement of Free Cash Flows”).  Each Statement of Free Cash Flows shall (i)
be prepared in accordance with GAAP applied on a consistent basis and with the
same accounting principles, practices, methodologies and policies used by such
Party in connection with the preparation of the Delivering Party’s financial
statements, (ii) be prepared in a manner consistent with the principles set
forth in Schedule 3.5(d), (iii) be prepared in a manner consistent with
the terms of this Agreement; and (iv) set forth the amount of the difference between
(1) cash transferred to Healthcare and Electronics as of the Final Distribution
Date pursuant to Section 3.5(a) or (b), as applicable, and (2)
$500 million.  For purposes of clarity, Schedule
3.5(d) sets forth the calculation of the Statement of Free Cash Flow for
the forecasted period September 30, 2006 to March 30, 2007.

(e)           Within two (2) Business Days
following the completion of a Delivering Party’s Statement of Free Cash Flows,
the Delivering Party shall deliver such Statement of Free Cash Flows to Tyco
for review, and Tyco and Tyco’s accountants may make reasonable inquiries of
the Delivering Party and/or its accountants and senior officers, at reasonable
times, upon reasonable advance notice, and without unreasonable interference to
such Party’s operations, regarding the Delivering Party’s Statement of Free
Cash Flows.  Tyco shall complete its
review of such Statement of Free Cash Flows within forty-five (45) days of
delivery of the Statement of Free Cash Flows to Tyco (the “FCF Review Period”).  Promptly following completion of its review
(but in no event later than two (2) Business Days following the conclusion of
the FCF Review Period), Tyco shall submit to the Delivering Party a letter
regarding its concurrence or disagreement with the accuracy of such Party’s
Statement of Free Cash Flows (“Response Letter”), provided, that
if Tyco submits a Response Letter indicating its disagreement with the
computation of Free Cash Flow, such letter will specify the specific items on
the Statement of Free Cash Flows with which it disagrees (each, a “Disputed
Item”).  Unless Tyco delivers a
Response Letter within two (2) Business Days following the conclusion of the
FCF Review Period, the Delivering Party’s Statement of Free Cash Flows shall
bind Tyco and the Delivering Party. 
Following delivery of the Response Letter, Tyco and the Delivering Party
shall in good faith attempt promptly to resolve any disagreement as to the
computation of any item in the Delivering Party’s Statement of Free Cash Flows;
provided, however, that any items in the Statement of Free Cash Flows that is
not subject to disagreement in the Response Letter or any Disputed Item which
is subsequently resolved by Tyco and the Delivering Party shall be deemed
agreed to.   If a resolution of all
Disputed Items has not been effected within fifteen (15) days (or longer, as
mutually

 

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agreed by Tyco and the
Delivering Party) after delivery of the Response Letter, then Tyco and the
Delivering Party shall submit any remaining Disputed Items to KPMG (the “Accountant”)
for determination.  The determination of
the Accountant with respect to all remaining Disputed Items shall be completed
within thirty (30) days after the appointment of the Accountant, shall be
determined in accordance with this Agreement, and shall be final and binding
upon Tyco and the Delivering Party.  With
respect to each Disputed Item subject to resolution by the Accountant, the
Accountant shall adopt a position that is either equal to the Delivering Party’s
proposed position, equal Tyco’s proposed position, or between the positions
proposed by Healthcare and Tyco.  The
Free Cash Flow of Healthcare as finally determined in accordance herewith shall
be referred to as “Healthcare Distribution Date FCF”.  The Free Cash Flow of Electronics as finally
determined in accordance herewith shall be referred to as “Electronics
Distribution Date FCF”.  The fees,
costs and expenses of the Accountant shall be shared equally by (i) Tyco and
Healthcare, with respect to the determination of the Healthcare Distribution
Date FCF and (ii) Tyco and Electronics, with respect to the determination of
the Electronics Distribution date FCF.

(f)            If the Healthcare Distribution Date
FCF is more than stated on Schedule 3.5 (f) (the “Healthcare Target
FCF”), and the difference is larger than $10 million, then Tyco shall be
obligated to pay, or cause to be paid, to Healthcare, or its designee, the
amount of any such excess within two (2) Business Days after the determination
of the Healthcare Distribution Date FCF.  
If the Healthcare Distribution Date FCF is less than the Healthcare
Targeted FCF, and the difference is larger than $10 million, then Healthcare
shall be obligated to pay, or cause to be paid, to Tyco, or its designee, the
difference between the Healthcare Distribution Date FCF and the Healthcare
Estimated FCF within two (2) Business Days after the determination of the
Healthcare Distribution Date FCF.  Any
such payments shall be made by wire transfer of immediately available funds to
the account designated in writing by the relevant Parties.  Any payment made pursuant to this Section
3.5 (f) shall be made with interest (such interest to be calculated on the
basis of a year of three-hundred sixty (360) days and the actual number of days
elapsed on such amount from the Distribution Date to the date of such payment
at a rate of LIBOR plus 27 basis points for the first 90 days and LIBOR plus
200 basis points for anytime after the first 90 days.

(g)           If the Electronics Distribution Date
FCF is more than stated on Schedule 3.5 (g) (the “Electronics Target
FCF”), and the difference is larger than $10 million, then Tyco shall be
obligated to pay, or cause to be paid, to Electronics, or its designee, the
amount of any such excess within two (2) Business Days after the determination
of the Electronics Distribution Date FCF.  
If the Electronics Distribution Date FCF is less than the Electronics
Estimated FCF, and the difference is larger than $10 million, then Electronics
shall be obligated to pay, or cause to be paid, to Tyco, or its designee, the
difference between the Electronics Distribution Date FCF and the Electronics
Estimated FCF within two (2) Business Days after the determination of the
Electronics Distribution Date FCF.  Any
such payments shall be made by wire transfer of immediately available funds to
the account designated in writing by the relevant Parties. Any payment made
pursuant to this Section 3.5 (g) shall be made with interest (such
interest to be calculated on the basis of a year of three-hundred sixty (360)
days and the actual number of days

 

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elapsed on such amount
from the Distribution Date to the date of such payment at a rate of LIBOR plus
27 basis points for the first 90 days and LIBOR plus 200 basis points for
anytime after the first 90 days.

Section 3.6             Ancillary Agreements.  On or prior to the Effective Time, each of Tyco,
Healthcare and Electronics shall enter into, and/or (where applicable) shall
cause a member or members of their respective Group to enter into, the
Ancillary Agreements and any other Contracts in respect of the Distributions
reasonably necessary or appropriate in connection with the transactions
contemplated hereby and thereby.

ARTICLE IV

THE DISTRIBUTIONS

Section
4.1             Stock Dividends to Tyco.

(a)           On or prior to the Healthcare
Distribution Date Tyco will cause the Agent to distribute all of the
outstanding shares of Healthcare Common Stock then owned by Tyco to holders of Tyco
Common Stock on the Healthcare Distribution Record Date, and to credit the
appropriate class and number of such shares of Healthcare Common Stock to book
entry accounts for each such holder or designated transferee or transferees of
such holder of Healthcare Common Stock.  For
stockholders of Tyco who own Tyco Common Stock through a broker or other
nominee, their shares of Healthcare Common Stock will be credited to their
respective accounts by such broker or nominee. 
Each holder of Tyco Common Stock on the Healthcare Distribution Record
Date (or such holder’s designated transferee or transferees) will be entitled
to receive in the Healthcare Distribution one (1) share of Healthcare Common
Stock for every          shares of Tyco Common Stock held by such
stockholder.  No action by any such
stockholder shall be necessary for such stockholder (or such stockholder’s
designated transferee or transferees) to receive the applicable number of
shares of (and, if applicable, cash in lieu of any fractional shares) Healthcare
Common Stock such stockholder is entitled to in the Healthcare Distribution.

(b)           On or prior to the Electronics
Distribution Date, Tyco will cause the Agent to distribute all of the
outstanding shares of Electronics Common Stock then owned by Tyco to holders of
Tyco Common Stock on the Electronics Distribution Record Date, and to credit
the appropriate class and number of such shares of Electronics Common Stock to
book entry accounts for each such holder or designated transferee or
transferees of such holder of Electronics Common Stock.  For stockholders of Tyco who own Tyco Common
Stock through a broker or other nominee, their shares of Electronics Common
Stock will be credited to their respective accounts by such broker or nominee.  Each holder of Tyco Common Stock on the Electronics
Distribution Record Date (or such holder’s designated transferee or
transferees) will be entitled to receive in the Electronics Distribution one
(1) share of Electronics Common Stock for every                   shares of Tyco Common Stock
held by such stockholder.  No action by
any such stockholder shall be necessary for such stockholder (or such
stockholder’s designated transferee or transferees) to receive the applicable
number of shares of (and, if applicable, cash in lieu

 

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of any fractional shares)
Electronics Common Stock such stockholder is entitled to in the Electronics
Distribution.

Section 4.2             Fractional Shares.  Tyco stockholders holding a number of shares
of Tyco Common Stock, on the applicable Record Date, which would entitle such
stockholders to receive less than one whole share of Healthcare Common Stock or
Electronics Common Stock, as the case may be, in the applicable Distribution,
will receive cash in lieu of fractional shares. 
Fractional shares of Healthcare Common Stock or Electronics Common Stock
will not be distributed in the Distributions nor credited to book-entry
accounts.  The applicable Agent shall, as
soon as practicable after the applicable Distribution Date (a) determine the
number of whole shares and fractional shares of Healthcare Common Stock or Electronics
Common Stock allocable to each holder of record or beneficial owner of Tyco
Common Stock as of close of business on the applicable Record Date, (b)
aggregate all such fractional shares into whole shares and sell the whole
shares obtained thereby in open market transactions, in each case, at then
prevailing trading prices on behalf of holders who would otherwise be entitled
to fractional share interests, and (c) distribute to each such holder, or for
the benefit of each such beneficial owner, such holder or owner’s ratable share
of the net proceeds of such sale, based upon the average gross selling price
per share of Healthcare Common Stock or Electronics Common Stock, as the case
may be, after making appropriate deductions for any amount required to be
withheld for United States federal income tax purposes.  Healthcare and Electronics, as the case may
be, shall bear the cost of brokerage fees incurred in connection with these
sales of fractional shares, which sales shall occur as soon after the
applicable Distribution Date as practicable and as determined by the Agent.  None of Tyco, Healthcare, Electronics or the
applicable Agent will guarantee any minimum sale price for the fractional
shares of Healthcare Common Stock or Electronics Common Stock.  None of Tyco, Healthcare or Electronics will
pay any interest on the proceeds from the sale of fractional shares.  The Agent acting on behalf of the applicable
Party will have the sole discretion to select the broker-dealers through which
to sell the aggregated fractional shares and to determine when, how and at what
price to sell such shares.  Neither the
Agent nor the broker-dealers through which the aggregated fractional shares are
sold will be Affiliates of Tyco, Healthcare or Electronics.

Section
4.3             Actions in Connection
with the Distribution.

(a)           Each of Healthcare and Electronics
shall file such amendments and supplements to their respective Form 10s as Tyco
may reasonably request, and such amendments as may be necessary in order to
cause the same to become and remain effective as required by Law, including
filing such amendments and supplements to their respective Form 10s as may be
required by the Commission or federal, state or foreign securities Laws.  Each of Healthcare and Electronics shall mail
to the holders of Tyco Common Stock, at such time on or prior to the applicable
Distribution Date as Tyco shall determine, the Information Statement included
in its Form 10, as well as any other information concerning Healthcare or Electronics,
as applicable, their business, operations and management, the Plan of
Separation and such other matters as Tyco shall reasonably determine are
necessary and as may be required by Law.

(b)           Each of Healthcare and Electronics
shall also cooperate with Tyco in preparing, filing with the Commission and
causing to become effective registration

 

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statements or amendments
thereof which are required to reflect the establishment of, or amendments to,
any employee benefit and other plans necessary or appropriate in connection
with the Plan of Separation or other transactions contemplated by this
Agreement and the Ancillary Agreements.  Promptly
after receiving a request from Tyco, to the extent requested, each of Healthcare
and Electronics shall prepare and, in accordance with applicable Law, file with
the Commission any such documentation that Tyco determines is necessary or
desirable to effectuate the applicable Distribution, and Tyco, Healthcare and Electronics
shall each use best efforts to obtain all necessary approvals from the
Commission with respect thereto as soon as practicable.

(c)           Promptly after receiving a request
from Tyco, each of Healthcare and Electronics shall prepare and file, and shall
use best efforts to have approved and made effective, an application for the
original listing of the Healthcare Common Stock and Electronics Common Stock, as
applicable, to be distributed in the applicable Distribution on the NYSE,
subject to official notice of distribution.

(d)           Each Party shall provide all
cooperation reasonably requested by the other Parties that is necessary or
desirable in connection with the Financing Arrangements.

(e)           Nothing in this Section 4.3
shall be deemed, by itself, to shift Liability for any portion of such Form 10s
or Information Statements to Tyco.

Section 4.4             Sole Discretion of Tyco.  Tyco shall, in its sole and absolute
discretion, determine each Distribution Date and all terms of the
Distributions, including the form, structure and terms of any transactions
and/or offerings to effect each Distribution and the timing of and conditions
to the consummation thereof.  In
addition, Tyco may, in accordance with Section 12.11, at any time
and from time to time until the completion of each Distribution decide to
abandon any or all of the Distributions or modify or change the terms of each
Distribution, including by accelerating or delaying the timing of the
consummation of all or part of any Distribution.

Section 4.5             Conditions to Distributions.  Subject to Section 4.4, the
following are conditions to the consummation of each Distribution.  The conditions are for the sole benefit of Tyco
and shall not give rise to or create any duty on the part of Tyco or the Board
of Directors of Tyco to waive or not waive any such condition.

(a)           The applicable Form 10 shall have
been declared effective by the Commission, with no stop order in effect with
respect thereto, and the applicable Information Statement shall have been
mailed to the holders of Tyco Common Stock;

(b)           With respect to the (i) Healthcare
Distribution, the Healthcare Common Stock to be delivered in the Healthcare
Distribution shall have been approved for listing on the NYSE, subject to
official notice of distribution and (ii) Electronics Distribution, the Electronics
Common Stock to be delivered in the Electronics Distribution shall have been
approved for listing on the NYSE, subject to official notice of distribution;

(c)           Prior to the Healthcare Distribution
and the Electronics Distribution, respectively, Tyco shall have obtained an
opinion from McDermott Will & Emery LLP,

 

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its tax counsel, in form
and substance satisfactory to Tyco (in its sole discretion), substantially to
the effect that, among other things, each Distribution, together with certain
related transactions, should qualify as a reorganization under Sections 355 and
368(a)(1)(D) of the Code;

(d)           Prior to each Distribution Date, as
applicable, Tyco shall have obtained a solvency opinion from Duff & Phelps
LLC, in form and substance satisfactory to Tyco to the effect that (i)
following the applicable Distribution, Tyco, on the one hand, and Healthcare or
Electronics, as applicable, on the other hand, will be solvent and adequately
capitalized and (ii) Tyco’s assets exceed its liabilities as determined
pursuant to Section 54 of the Bermuda Companies Act of 1981 in an amount
sufficient to allow the declaration of the applicable dividend, as applicable;

(e)           Any material Governmental Approvals
and other Consents necessary to consummate the applicable Distribution or any
portion thereof shall have been obtained and be in full force and effect;

(f)            No order, injunction or decree
issued by any Governmental Entity of competent jurisdiction or other legal
restraint or prohibition preventing the consummation of all or any portion of
the applicable Distribution shall be in effect, and no other event outside the
control of Tyco shall have occurred or failed to occur that prevents the
consummation of all or any portion of the applicable Distribution;

(g)           The financing transactions described
in the applicable Information Statements as having occurred prior to an
applicable Distribution shall have been consummated on or prior to the
applicable Distribution; and

(h)           The Board of Directors of Tyco shall
have approved the applicable Distribution, which approval may be given or
withheld at its absolute and sole discretion.

ARTICLE V

CERTAIN COVENANTS

Section
5.1             No Solicit; No Hire.

(a)           None of Tyco, Healthcare or Electronics
or any member of their respective Groups will, from the applicable Relevant
Time through and including the second anniversary of the Relevant Time, without
the prior written consent of the other applicable Party, either directly or
indirectly, on their own behalf or in the service or on behalf of others, hire
as an employee or an independent contractor any individual who ranks at Career
Band Four or above in the Tyco employment system employed by any other Party or
its Subsidiaries as of the Relevant Time (a “Restricted Person”).

(b)           None of Tyco, Healthcare or Electronics
or any member of their respective Groups will, from the applicable Relevant
Time through and including the second anniversary of the Relevant Time, without
the prior written consent of the Senior Vice President of Human Resources of
the other applicable Party, either directly or indirectly,

 

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on their own behalf or in
the service or on behalf of others, solicit, aid, induce or encourage any
Restricted Person who is an employee of any other Party’s respective Group to
leave his or her employment; provided, however, that nothing in
this Section 5.1(b) shall be deemed to prohibit, any general
solicitation for employment through advertisements and search firms not
specifically directed at employees of such other applicable Party; provided,
that the applicable Party has not encouraged or advised such firm to approach
any such employee.

Section 5.2             Corporate Names and Other
Parties’ Trademarks.

(a)           Corporate Names.  As of the Relevant Time and subject to Section
5.2(b), the Parties shall adopt and conduct business under their respective
identities and Trademarks and set out in Schedule 5.2(a), specifically Schedule
5.2(a)(1) for Tyco, Schedule 5.2(a)(2) for Healthcare and Schedule
5.2(a)(3) for Electronics.  Further,
as of the Relevant Time, the Parties shall cease to hold themselves out as
having any affiliation with any of the other Parties or such Parties’
Affiliates (except as permitted or required under any Continuing Arrangement or
Ancillary Agreement); provided, however, that the foregoing shall
not prohibit any Party or any member of a Party’s Group from stating in any
advertising or any other communication that it is formerly a Tyco affiliate.

(b)           Tyco Trademark.  Except as otherwise specifically provided in
any Ancillary Agreement or provided in Section 5.2(a) and Schedule
5.2(a), the Parties shall cease making any use of “Tyco”, “Tyco
International”, “Tyco Healthcare” and “Tyco Electronics” in accordance with the
provisions set out in Schedule 5.2(a)(1) for Tyco, Schedule 5.2(b)(1)
for Healthcare; and Schedule 5.2(b)(3) for Electronics.  The Parties agree that an Ancillary Agreement
with the owner of the “Tyco” Trademark is required for any use by a Party
extending beyond one (1) year from the Relevant Date.

(c)           Other Party Marks.  For Trademarks other than those addressed
above, within six (6) months of the Relevant Date, each Party and the members
of its Group shall cease to make any use of any names or Trademarks that
include the Trademarks of any other Parties or such Parties’ Subsidiaries or
Affiliates (“Other Party Marks”).

(d)           No Other Use.  With respect to Corporate Names and
Trademarks set out in Sections 5.2(a) through (c) and other than
allowed in the foregoing Sections, the Parties shall further cease to use any
names or Trademarks related thereto including any names or Trademarks
confusingly similar thereto or dilutive thereof; however, nothing herein  shall prohibit a Party from making use of any
Trademark in a manner that would constitute “fair use” under applicable Law if
any unaffiliated third party made such use or would otherwise be legally
permissible for any unaffiliated third party without the consent of the Party
owning such Other Party Mark.

(e)           Quality Control Requirements.  In furtherance of the foregoing, any use by
any of the Parties or any of their Subsidiaries or Affiliates of any of the
Tyco Trademarks or Other Party Marks as permitted in this Section 5.2 is
subject to their compliance with the quality control requirements and
guidelines in effect for the Other Party Marks as of the Effective Time

 

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(f)            Transitional Use.  Notwithstanding the foregoing requirements of
Sections 5.2(a) and (b), if any Party or any member of a Party’s
Group exercised good faith efforts to comply with Sections 5.2(a) and (b)
but is unable, due to regulatory or other circumstance beyond its control, to
effect a corporate name change in compliance with applicable Law such that an
Other Party Mark remains in such Party’s or its Group member’s corporate name,
then the relevant Party or its Group member will not be deemed to be in breach
hereof if it continues to exercise good faith efforts to effectuate such name
change and does effectuate such name change within twelve (12) months after the
applicable time set out in the applicable Schedule 5.2(b), said twelve
(12) month period subject to a request for an extension of time by the Party
attempting to effectuate said name change and consent by the other Parties that
is not to be unreasonably withheld. In such circumstances, such Party or Group
member may continue to include in its assets and other materials references to
the Other Party Mark that is in such Party’s or Group member’s corporate name
which includes references to “Healthcare”, “Electronics” or “Tyco” as applicable,
but only to the extent necessary to identify such Party or Group member and
only until such Party’s or Group member’s corporate name can be changed to
remove and eliminate such references.

Section 5.3             Auditors and Audits; Annual and
Quarterly Financial Statements and Accounting.  Each Party agrees to provide the following
assistance of access set forth in subsections (a), (b) and (c)
of this Section 5.3, (i) during the three hundred and sixty-five (365) days
following the applicable Relevant Time in connection with the preparation and
audit of each of the Party’s financial statements for the year ended September
30, 2007, the printing, filing and public dissemination of such financial
statements, the audit of each Party’s internal control over financial reporting
and management’s assessment thereof and management’s assessment of each Party’s
disclosure controls and procedures, if required, in each case made as of September
30, 2007; (ii) following such initial three hundred and sixty-five (365) day period,
with the consent of the other applicable Party (not be unreasonably withheld or
delayed) for reasonable business purposes; (iii) in the event that any Party
changes its auditors within two (2) years of the applicable Relevant Time, then
such Party may request reasonable access on the terms set forth in this Section 5.3
for a period of up to one hundred and eighty (180) days from such change; and
(iv)  from time to time following the
applicable Relevant Time, to the extent reasonably necessary to respond (and
for the limited purpose of responding) to any written request or official
comment from a Governmental Entity, such as in connection with responding to a
comment letter from the Commission:

(a)           Annual Financial Statements.  Each Party shall provide or provide access to
the other Party on a timely basis all information reasonably required to meet
its schedule for the preparation, printing, filing, and public dissemination of
its annual financial statements and for management’s assessment of the effectiveness
of its disclosure controls and procedures and its internal control over
financial reporting in accordance with Items 307 and 308, respectively, of
Regulation S-K and, to the extent applicable to such Party, its auditor’s audit
of its internal control over financial reporting and management’s assessment
thereof in accordance with Section 404 of the Sarbanes-Oxley Act of 2002
and the Commission’s and Public Company Accounting Oversight Board’s rules and
auditing standards thereunder, if required (such assessments and audit being
referred to as the “2007 Internal Control Audit and Management Assessments”).

 

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Without limiting the
generality of the foregoing, each Party will provide all required financial and
other Information with respect to itself and its Subsidiaries to its auditors
in a sufficient and reasonable time and in sufficient detail to permit its
auditors to take all steps and perform all reviews necessary to provide
sufficient assistance to each other Party’s auditors with respect to
information to be included or contained in such other Party’s annual financial
statements and to permit such other Party’s auditors and management to complete
the 2007 Internal Control Audit and Management Assessments, if required.

(b)           Access to Personnel and Records.  Each Party shall authorize its respective
auditors to make reasonably available to each other Party’s auditors (each such
other Party’s auditors, collectively, the “Other Parties’ Auditors”)
both the personnel who performed or are performing the annual audits of such
audited Party (each such Party with respect to its own audit, the “Audited
Party”) and work papers related to the annual audits of such Audited Party,
in all cases within a reasonable time prior to such Audited Party’s auditors’
opinion date, so that the Other Parties’ Auditors are able to perform the
procedures they reasonably consider necessary to take responsibility for the
work of the Audited Party’s auditors as it relates to their auditors’ report on
such other Party’s financial statements, all within sufficient time to enable
such other Party to meet its timetable for the printing, filing and public
dissemination of its annual financial statements.  Each Party shall make reasonably available to
the Other Parties’ Auditors and management its personnel and Records in a
reasonable time prior to the Other Parties’ Auditors’ opinion date and other
Parties’ management’s assessment date so that the Other Parties’ Auditors and
other Parties’ management are able to perform the procedures they reasonably
consider necessary to conduct the 2007 Internal Control Audit and Management
Assessments.

(c)           Annual Reports.  Each Party will deliver to the other Parties a
substantially final draft, as soon as the same is prepared, of the first report
to be filed with the Commission (or otherwise) that includes their respective
financial statements (in the form expected to be covered by the audit report of
such Party’s independent auditors) for the year ended September 30, 2007 (such
reports, collectively, the “Annual Reports”); provided, however,
that each Party may continue to revise its respective Annual Report prior to
the filing thereof, which changes will be delivered to the other Parties as
soon as reasonably practicable; provided, further, that each
Party’s personnel will actively consult with the other Party’s personnel
regarding any material changes which they may consider making to its respective
Annual Report and related disclosures prior to the anticipated filing with the
Commission, with particular focus on any changes which could reasonably be
expected to have an effect upon the other Party’s financial statements or
related disclosures.

Nothing
in this Section 5.3 shall require any Party to violate any
agreement with any third party regarding the confidentiality of confidential
and proprietary information relating to that third party or its business; provided,
however, that in the event that a Party is required under this Section 5.3
to disclose any such information, such Party shall use best efforts to seek to
obtain such third party’s consent to the disclosure of such information.

 

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Section 5.4             Certain Securities.  Subject to the provisions of Section 6.1
as applicable, following the applicable Distribution Date, each of Healthcare
and Electronics agree that, upon exercise of any option, warrant or similar
security to purchase Tyco Common Stock or the conversion of any note or other
security of Tyco convertible into Tyco Common Stock, in each case that Tyco has
issued to third persons prior to the Effective Time, each applicable Party
shall, upon request by Tyco, promptly (and in any event within any time periods
required by the terms of any such option, warrant, note or similar security)
issue to Tyco, as agent for the holder thereof, such number of shares of such
Party’s common stock that Tyco would otherwise be required to deliver to such
holder pursuant to the terms of any such security and Tyco shall promptly
deliver such shares to such holder.  It
is further agreed that with respect to such options, warrants, notes or similar
securities, each of Healthcare and Electronics shall keep reserved for issuance
a sufficient number of shares of its Common Stock to satisfy any future
exercises of such options or warrants or conversion of such notes or other
securities.  In connection with the
foregoing, Tyco will promptly following receipt of notice that a holder desires
to exercise any such options, warrants or similar security or convert such note
or other security, in each case of the type described in this Section 5.4
notify, in writing, the other relevant Parties so that they may comply with the
terms of this Section 5.4; provided, that none of Healthcare
or Electronics shall have any additional Liability beyond the obligation to
deliver shares as set forth in this Section 5.4 for failing to deliver
such shares of its Common Stock in the time period described in the foregoing
sentence if such failure and delay was the result of untimely notification by
Tyco.  Each of Healthcare and/or
Electronics, as the case may be, hereby Assumes the obligations set forth in
this Section 5.4.

Section 5.5             Administration of Specified
Shared Expenses.

(a)           Tyco shall be responsible for
administering each Specified Shared Expense. 
Each Party shall be responsible for payment of thirty three and
one-third percent (33 1/3 %) of any Specified Shared Expense.  Tyco shall invoice each of Healthcare and
Electronics on a quarterly basis, and Healthcare and Electronics shall each promptly
following invoice reimburse the administering Party for its allocable share of
such Specified Shared Expenses.

(b)           As of the Final Separation Date,
Healthcare and Electronics shall each pay $3.2 million and $5.0 million,
respectively, to White Mountain Insurance Company to fund the unallocated loss
adjustment expense for Loss Portfolio Transfer and Non- Loss Portfolio Transfer
years.  White Mountain Insurance Company
shall be liable for any unallocated loss adjustment expense in excess of such
amounts received from Healthcare and Electronics.

Section 5.6             Cooperation.  From and after the applicable Relevant Time,
the Parties shall, and shall cause each of their respective Affiliates and
employees to (i) provide reasonable cooperation and assistance to each other
Party in connection with the completion of the Plan of Separation (including
assisting in the preparation of the Distributions), (ii) provide knowledge
transfer regarding its applicable Business or Tyco’s historical business and
(iii) assist each Party in the orderly and efficient transition in becoming an
independent company, in each case at no additional cost to the Party requesting
such assistance other than for the actual out-of-pocket costs (which shall not
include the costs of salaries and benefits of employees of such Party or any

 

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pro rata portion of overhead or other costs of
employing such employees which would have been incurred by such employees’
employer regardless of the employees’ service with respect to the foregoing)
incurred by any such Party, if applicable. 
The cooperation and assistance provided for in this Section 5.6
shall not be required to the extent such cooperation and assistance would
result in an undue burden on any Party or would unreasonably interfere with any
of its employees normal functions and duties. 
In furtherance of, and without limiting, the foregoing, each Party shall
make reasonably available those employees with particular knowledge of any
function or service of which another Party was not allocated the employees
involved in such function or service in connection with the Plan of Separation
(including, employee benefits functions, risk management, etc.).

Section 5.7             Periodic Meetings.  Unless otherwise agreed to by the Parties, at
least once during each fiscal quarter during the ten (10) year period following
the Distribution Date the Parties will hold a meeting for the purpose of
sharing information related to this Agreement, any Assumed Tyco Contingent
Liabilities or the preparation of any Party’s financial statements.  Each Party will designate between one (1) and
three (3) persons as its standing representatives for such meetings.  The Managing Party shall be responsible for
scheduling such meeting at reasonably consistent and convenient times and on no
less than thirty (30) days notice.  The
Parties’ standing representatives and others may participate in such meetings
in person or other medium by which all participants may hear each other.

ARTICLE VI

EMPLOYEE MATTERS

Section
6.1             Stock Options.

(a)           Healthcare
Options.

(i)            On behalf of all Healthcare
Employees who hold Tyco Options, prior to the Distribution Date, Tyco shall
take all actions necessary such that each Tyco Option held by a Healthcare
Employee which is outstanding immediately prior to the Distribution Date,
whether vested or unvested, other than any Tyco Option subject to the
provisions of Section 6.1(d) below, shall, as of the Distribution Date,
be converted into an option to acquire Healthcare Common Stock (a “Healthcare
Option”) in accordance with the succeeding paragraphs of this Section 6.1(a).

(ii)           The number of shares subject to the
Healthcare Option shall equal the number of shares of Tyco Common Stock subject
to the Tyco Option multiplied by a fraction, the numerator of which is the last
per share trading price of Tyco Common Stock on the NYSE (NYSE - TYC) in the
last trade on the NYSE immediately prior to the Distribution (the “Closing
Tyco Stock Price”), and the denominator of which is the last per share
trading price of Healthcare Common Stock when-issued (NYSE —            ) in the last trade on the NYSE
immediately prior to the Distribution (the “Pre-Distribution Healthcare Stock

 

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Price”), with the resulting number of shares
subject to the Healthcare Option being rounded down to the nearest whole share.

(iii)          The per share exercise price of the
Healthcare Option shall be equal to the product of (A) the original exercise
price of the Tyco Option multiplied by (B) a fraction, the numerator of which
shall be the Pre-Distribution Healthcare Stock Price and the denominator of
which shall be the Closing Tyco Stock Price, which product shall be rounded up
to the nearest ten-thousandth of a cent (four decimal places).

(iv)          Prior to the Distribution Date, Tyco
shall cause Healthcare to adopt the Tyco Healthcare Ltd. 2007 Stock and
Incentive Plan (the “2007 Healthcare Stock and Incentive Plan”),
effective as of the Distribution Date, shall ensure or cause Healthcare to
ensure that the shares issuable under such plan have been registered on Form S-8
(or successor form) promulgated by the Securities and Exchange Commission under
the Securities Act of 1933, as amended, and shall approve, as the sole
stockholder, the adoption of the 2007 Healthcare Stock and Incentive Plan.  On or prior to the Distribution Date, Tyco
shall take all actions deemed necessary and appropriate to revise award agreements
issued with respect to any Tyco Option converted to a Healthcare Option to
ensure that the terms and conditions of the Healthcare Options described in Section
6.1(a) above are substantially similar to the terms and conditions
applicable to the corresponding Tyco Option, including the terms and conditions
relating to vesting and the post-termination exercise period.

(b)           Electronics
Options.

(i)            On behalf of all Electronics
Employees who hold Tyco Options, prior to the Distribution Date, Tyco shall
take all actions necessary such that each Tyco Option held by an Electronics
Employee which is outstanding immediately prior to the Distribution Date,
whether vested or unvested, other than any Tyco Option subject to the
provisions of Section 6.1(d) below, shall, as of the Distribution Date,
be converted into an option to acquire Electronics Common Stock (an “Electronics
Option”) in accordance with the succeeding paragraphs of this Section 6.1(b).

(ii)           The number of shares subject to the
Electronics Option shall equal the number of shares of Tyco Common Stock
subject to the Tyco Option multiplied by a fraction, the numerator of which is
the Closing Tyco Stock Price and the denominator of which is the last per share
trading price of Electronics Common Stock when-issued (NYSE — TEL) in the last
trade on the NYSE immediately prior to the Distribution (the “Pre-Distribution
Electronics Stock Price”), with the resulting number of shares subject to
the Electronics Option being rounded down to the nearest whole share.

(iii)          The per share exercise price of the
Electronics Option shall be equal to the product of (A) the original exercise
price of the Tyco Option

 

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multiplied by (B) a
fraction, the numerator of which shall be the Pre-Distribution Electronics
Stock Price and the denominator of which shall be the Closing Tyco Stock Price,
which product shall be rounded up to the nearest ten-thousandth of a cent (four
decimal places).

(iv)          Prior to the Distribution Date, Tyco shall
cause Electronics to adopt the Tyco Electronics Ltd. 2007 Stock and Incentive
Plan (the “2007 Electronics Stock and Incentive Plan”), effective as of
the Distribution Date, shall ensure or cause Electronics to ensure that the
shares issuable under such plan have been registered on Form S-8 (or
successor form) promulgated by the Securities and Exchange Commission under the
Securities Act of 1933, as amended, and shall approve, as the sole stockholder,
the adoption of the 2007 Electronics Stock and Incentive Plan.  On or prior to the Distribution Date, Tyco
shall take all actions deemed necessary and appropriate to revise award
agreements issued with respect to any Tyco Option converted to an Electronics
Option to ensure that the terms and conditions of the Electronics Options
described in Section 6.1(a) above are substantially similar to the terms
and conditions applicable to the corresponding Tyco Option, including the terms
and conditions relating to vesting and the post-termination exercise period.

(c)           Tyco
Options.

(i)            On behalf of all Tyco Employees who
hold Tyco Options and non-employee directors of Tyco on the Distribution Date (“Tyco
Directors”) who hold Tyco Options, prior to the Distribution Date, Tyco
shall take all actions necessary such that each Tyco Option which is
outstanding immediately prior to the Distribution Date, whether vested or
unvested, other than any Tyco Option subject to the provisions of Section
6.1(d) below, shall, as of the Distribution Date, be adjusted such that the
number of shares subject to each Option and the per-share exercise price
reflect the impact of the Distribution in accordance with the succeeding
paragraphs of this Section 6.1(c).

(ii)           The adjusted number of shares subject
to the Tyco Option shall equal the original number of shares of Tyco Common
Stock subject to the Tyco Option multiplied by a fraction, the numerator of
which is the Closing Tyco Stock Price, and the denominator of which is the last
per share trading price of Tyco Common Stock when-issued (NYSE —            ) in the last trade immediately
prior to the Distribution (the “Pre-Distribution Tyco Stock Price”),
with the resulting number of shares subject to the Tyco Option being rounded
down to the nearest whole share.

(iii)          The per share exercise price of the
Tyco Option shall be equal to the product of (A) the original exercise price of
the Tyco Option multiplied by (B) a fraction, the numerator of which is the
Pre-Distribution Tyco Stock Price and the denominator of which is the Closing
Tyco Stock Price, which product shall be rounded up to the nearest ten-thousandth
of a cent (four decimal places).

 

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(d)           Tyco Options for Tyco Corporate
Employees.

(i)            On behalf of all employees listed in
Schedule 6.1(d) who hold Tyco Options granted prior to September 29,
2006, Tyco shall take all actions necessary such that each such Tyco Option
which is outstanding immediately prior to the Distribution Date, whether vested
or unvested, shall, as of the Distribution Date, (A) be converted into an
option to separately acquire an equal number of shares of Healthcare Common
Stock, Electronics Common Stock and Tyco Common Stock, and (B) be adjusted such
that the number of shares subject to each option and the per-share exercise
price reflect the impact of the Distribution in accordance with the succeeding
paragraphs of this Section 6.1(d), except to the extent expressly
provided to the contrary in a written agreement with the holder of such Tyco
Options, in which case such options shall be treated in accordance with the
provisions of such individual agreement.

(ii)           The adjusted number of shares subject
to each option to acquire Healthcare Common Stock, Electronics Common Stock and
Tyco Common Stock shall equal the original number of shares of Tyco Common
Stock subject to the Tyco Option immediately prior to the Distribution Date
multiplied by a fraction, the numerator of which is the Closing Tyco Stock
Price and the denominator is the sum of the Pre-Distribution Healthcare Stock
Price, the Pre-Distribution Electronics Stock Price and the Pre-Distribution
Tyco Stock Price, with the resulting number of shares rounded down to nearest
whole share.

(iii)          The per-share exercise price of each
option to acquire Healthcare Common Stock, Electronics Common Stock and Tyco
Common Stock shall be determined separately and shall be equal to the original
exercise price of the Tyco Option immediately prior to the Distribution Date
multiplied by a fraction, the numerator of which is the applicable
Pre-Distribution Healthcare Stock Price, the Pre-Distribution Electronics Stock
Price and the Pre-Distribution Tyco Stock Price, and the denominator of which
is the Closing Tyco Stock Price, which resulting per-share exercise price for
each option shall be rounded up to the nearest ten-thousandth of a cent (four
decimal places).

(e)           Former Employees and Former Tyco
Directors.

(i)            Tyco Options held by Former Tyco
Employees, Former Electronics Employees and Former Healthcare Employees shall
be treated in the same manner as described in Section 6.1(d) above;
provided, however, that any Tyco Options issued to a former employee with
respect to fiscal year 2007 shall be treated as follows: Tyco Options held by
Former Healthcare Employees shall be treated in the same manner as options
described in Section 6.1(a);  Tyco
Options held by Former Electronics Employees shall be treated in the same
manner as options described in Section 6.1(b); and Tyco Options held by
Former Tyco Employees shall be treated in the same manner as options described
in Section 6.1(c). 
Notwithstanding the foregoing, if a written agreement between a Party
(or any of their Affiliates or Subsidiaries) and the holder of any such Tyco

 

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Options prior to the
Distribution Date expressly provides for contrary treatment, such options shall
be treated in accordance with the provisions of such individual agreement.

(ii)           Tyco Options held by individuals who
formerly served as Tyco Directors and on and after the Distribution Date are
not serving as Tyco Directors shall be treated in the same manner as described
in Section 6.1(d) above, except to the extent expressly provided to the
contrary in a written agreement with the holder of such Tyco Options, in which
case such options shall be treated in accordance with the provisions of such
individual agreement.

(f)            Settlement of Options.  Subject to the terms of this Agreement and
any other agreement made by the Parties from time to time, upon the exercise of
any Tyco Options, Electronics Options or Healthcare Options, each of Tyco,
Healthcare and Electronics, respectively, shall be solely responsible to issue
shares in settlement of such options without reimbursement, recourse or other
compensation from any other Party.

Section
6.2             Restricted Stock,
Restricted Stock Units, Performance Share Units and Deferred Stock Units.

(a)           Restricted Stock.  Each Tyco Restricted Stock award that is
outstanding immediately prior to the Distribution Date shall be converted so
that, immediately after the Distribution Date, the holder has, in addition to
the original Tyco Restricted Stock award, an additional award of Healthcare
Restricted Stock and of Electronics Restricted Stock.  The number of additional shares of Healthcare
Restricted Stock and Electronics Restricted Stock awarded shall be equal to the
number of shares of common stock to which the holder of the Restricted Stock
would be entitled to on the Distribution Date pursuant to Section 4.1 if the
Restricted Stock awarded represented actual shares of Tyco Common Stock, with
the resulting number of shares of Healthcare Restricted Stock and Electronics
Restricted Stock being rounded down to the nearest whole number of shares with a
cash payment for fractional shares.  Upon
the conversion:

(i)            such converted Restricted Stock held
by each Tyco Employee shall be subject to the same vesting schedule associated
with the original Tyco Restricted Stock, and the additional Healthcare
Restricted Stock and Electronics Restricted Stock shares shall vest as follows,
unless the applicable award agreement provides more favorable vesting: 50% of
the aggregate number of shares of such Restricted Stock (rounded down to the
nearest whole number of shares in the event the aggregate number of shares is
not an even number) shall vest on the Distribution Date and the remaining
shares shall vest on the 6-month anniversary of the Distribution Date, provided
the Tyco Employee is still employed by Tyco;

(ii)           such additional Healthcare Restricted
Stock held by each Healthcare Employee shall be subject to the same vesting
schedule associated with the original Tyco Restricted Stock award, and the
original Tyco Restricted Stock and additional Electronics Restricted Stock
shares shall vest as follows,

 

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unless the applicable
award agreement provides more favorable vesting: 50% of the aggregate number of
shares of such Restricted Stock (rounded down to the nearest whole number of
shares in the event the aggregate number of shares is not an even number) shall
vest on the Distribution Date and the remaining shares shall vest on the
6-month anniversary of the Distribution Date, provided the Healthcare Employee
is still employed by Healthcare; and

(iii)          such additional Electronics Restricted
Stock held by each Electronics Employee shall be subject to the same vesting
schedule associated with the original Tyco Restricted Stock award, and the
original Tyco Restricted Stock and additional Healthcare Restricted Stock
shares shall vest as follows, unless the applicable award agreement provides
more favorable vesting: 50% of the aggregate number of shares of such
Restricted Stock (rounded down to the nearest whole number of shares in the
event the aggregate number of shares is not an even number) shall vest on the
Distribution Date and the remaining shares shall vest on the 6-month
anniversary of the Distribution Date, provided the Electronics Employee is
still employed by Electronics;

(b)                                 Restricted Stock Units, Performance Share
Units and Deferred Stock Units.

(i)            Restricted Stock Units Granted
Prior to September 29, 2006.  Each
Tyco Restricted Stock Unit award granted prior to September 29, 2006 that is
outstanding immediately prior to the Distribution Date shall be converted in
the exact same fashion as Restricted Stock awards are converted pursuant to Section
6.2(a); provided, however, that awards classified for administrative
purposes as “2004Un-07” or “2004UnUk-07,” shall be
treated as if it were granted on or after September 29, 2006, as set forth in Section
6.2(b)(ii) below.

(ii)           Restricted Stock Units Granted on
or After September 29, 2006.  Each
Tyco Restricted Stock Unit award granted on or after September 29, 2006 that is
outstanding immediately prior to the Distribution Date shall be converted into
Restricted Stock Units as follows:

(A)          On behalf of all Healthcare Employees
who hold such Restricted Stock Units, Healthcare shall issue a replacement
Restricted Stock Unit which shall retain the vesting schedule associated with
such original Tyco Restricted Stock Unit award. 
The number of Healthcare Restricted Stock Units shall equal the number
of outstanding Tyco Restricted Stock Units as of the Distribution Date,
multiplied by a fraction, the numerator of which is the Closing Tyco Stock
Price, and the denominator of which is the Pre-Distribution Healthcare Stock
Price, which product shall be rounded down to the nearest whole number of units
with a cash payment for any fractional units.

(B)           On behalf of all Electronics
Employees who hold such Restricted Stock Units, Electronics shall issue a
replacement Restricted

 

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Stock Unit which shall
retain the vesting schedule associated with such original Tyco Restricted Stock
Unit award.  The number of Electronics Restricted
Stock Units shall equal the number of outstanding Tyco Restricted Stock Units
as of the Distribution Date, multiplied by a fraction, the numerator of which
is the Closing Tyco Stock Price and the denominator of which is
Pre-Distribution Electronics Stock Price, which product shall be rounded down
to the nearest whole number of units with a cash payment for any fractional
units.

(C)           On behalf of all Tyco Employees who
hold such Restricted Stock Units, Tyco shall issue a revised Restricted Stock
Unit which shall retain the vesting schedule associated with such original Tyco
Restricted Stock Unit award.  The number
of adjusted Tyco Restricted Stock Units shall equal the original number of
outstanding Tyco Restricted Stock Units as of the Distribution Date, multiplied
by a fraction, the numerator of which is the Closing Tyco Stock Price and the
denominator of which is Pre-Distribution Tyco Stock Price, which product shall
be rounded down to the nearest whole number of units with a cash payment for
any fractional units.

(iii)          Performance Share Units.

(A)          Each Tyco Performance Share Unit award
that is outstanding immediately prior to the Distribution Date (as adjusted to
reflect the number of such units then outstanding as a result of fiscal year
2006 performance) shall be converted in the exact same manner as Restricted
Stock Units granted on or after September 29, 2006 are converted pursuant to Section
6.2(b)(ii) above; provided, however, that each Tyco Performance Share Unit
award that is held by an employee listed in Schedule 6.1(d) and is
outstanding immediately prior to the Distribution Date (as adjusted to reflect
the number of such units then outstanding as a result of fiscal year 2006
performance) shall be converted into Tyco Performance Share Units, Healthcare
Performance Share Units and Electronics Performance Share Units as if such
awards were Restricted Stock awards converted pursuant to Section 6.2(a).

(B)           The Parties shall take all necessary
actions to provide that the terms and conditions of such converted Performance
Share Unit awards shall be modified to provide that the converted Performance
Share Unit awards shall be payable at the end of the three-year performance
cycle without regard to the originally established performance criteria,
provided that the employee remains continuously employed with Tyco, Healthcare
or Electronics through such date (subject to any acceleration of vesting upon
death, disability, retirement, change of control or termination of employment
as a result of divesture or outsourcing as provided for in any original
Performance Share Unit award agreements.)

 

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(iv)          Deferred Stock Units.

(A)          Each Tyco Deferred Stock Unit that is
outstanding immediately prior to the Distribution Date and which is held by a
Tyco Director shall be adjusted such that the number of Tyco Deferred Stock
Units reflects the impact of the Distribution as set forth in Section 6.1(c).  Such converted awards shall remain subject to
the terms and conditions in effect with respect to the award immediately
preceding the Distribution Date.

(B)           Each Tyco Deferred Stock Unit that is
outstanding immediately prior to the Distribution Date and which is held by an
employee listed in Schedule 6.1(d) shall be adjusted such that the
number of Tyco Deferred Stock Units reflects the impact of the Distribution as set
forth in Section 6.1(c).  Such
converted awards shall remain subject to the terms and conditions in effect
with respect to the award immediately preceding the Distribution Date.

(c)           Grant and Settlement of Awards.  Electronics shall grant each Electronics
Restricted Stock, Restricted Stock Unit, Performance Share Unit, or Deferred
Stock Units under the 2007 Electronics Stock and Incentive Plan.  Healthcare shall grant each Healthcare
Restricted Stock, Restricted Stock Unit, Performance Share Unit or Deferred
Stock Units under the 2007 Healthcare Stock and Incentive Plan.  Subject to the terms of this Agreement any
other agreement in force between the Parties from time to time, upon the
vesting or payment of any such award, each of Tyco, Healthcare and Electronics
shall be solely responsible to issue its shares in settlement of the respective
awards payable in its shares without reimbursement, recourse or other
compensation from any other Party.

Section 6.3             Employee Stock Purchase Plan.
 Healthcare
Employees and Electronics Employees ceased making contributions to the Tyco
International Ltd. Employee Stock Purchase Plan (the “Tyco ESPP”)
effective January 31, 2007.  Any
contributions made, but which cannot be used to purchase shares of Tyco Common
Stock under the Tyco ESPP will be returned to employees in accordance with the
terms of the Tyco ESPP.  Accounts will be
established for each participant with UBS Financial Services so that following
the Distribution Date each participant will maintain an individual account of
their existing shares from the Tyco ESPP.   
Healthcare and Electronics shall each adopt a new employee stock
purchase plan to be effective as soon as practicable after the Distribution
Date.

Section
6.4             Nonqualified Deferred
Compensation Plans.

(a)           Healthcare
Nonqualified Deferred Compensation Plans.

(i)            Effective as of the Distribution
Date, Healthcare (or any one of its Subsidiaries or Affiliates) shall be solely
responsible for the satisfaction of all Liabilities under the Healthcare Deferred
Compensation Plans and Liabilities with respect to nonqualified deferred
compensation plan benefits for Healthcare Employees and Former Healthcare
Employees under the Tyco Supplemental

 

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Savings and Retirement
Plan and Tyco Supplemental Executive Retirement Plan (the “Healthcare
Deferred Compensation Liabilities”). 
In this connection, Healthcare (or any one of its Subsidiaries or
Affiliates), shall maintain one or more nonqualified deferred compensation
plans which shall contain terms that are substantially similar to the terms and
conditions of the Tyco Supplemental Savings and Retirement Plan and Tyco
Supplemental Executive Retirement Plan as in effect prior to the Distribution
Date (subject to such amendments as necessary to comply with Code Section 409A)
and the Healthcare Deferred Compensation Liabilities under the Tyco
Supplemental Savings and Retirement Plan and Tyco Supplemental Executive
Retirement Plan as of the Distribution Date shall be transferred to such plans.

(ii)           All elections by Healthcare
Employees, and Former Healthcare Employees that were in effect under the terms
of the applicable Healthcare Deferred Compensation Plan immediately prior to
the Distribution Date shall continue in effect from and after the Distribution
Date until a new election that by its terms supersedes the prior election is
made by such Healthcare Employee or Former Healthcare Employee in accordance
with the terms of the applicable Healthcare Deferred Compensation Plan and
consistent with the provisions of Code Section 409A to the extent
applicable.

(iii)          Payments to Healthcare Employees and
Former Healthcare Employees under the Healthcare Deferred Compensation Plans
shall be made by Healthcare or one of its Subsidiaries or Affiliates as
determined in the sole discretion of Healthcare.

(b)           Electronics
Nonqualified Deferred Compensation Plans.

(i)            Effective as of the Distribution
Date, Electronics (or any one of its Subsidiaries or Affiliates) shall be
solely responsible for the satisfaction of all Liabilities under the
Electronics Deferred Compensation Plans and Liabilities with respect to
nonqualified deferred compensation plan benefits for Electronics Employees and
Former Electronics Employees under the Tyco Supplemental Savings and Retirement
Plan and Tyco Supplemental Executive Retirement Plan (the “Electronics
Deferred Compensation Liabilities”). 
In this connection, Electronics (or any one of its Subsidiaries or
Affiliates), shall maintain one or more nonqualified deferred compensation
plans which shall contain terms that are substantially similar to the terms and
conditions of the Tyco Supplemental Savings and Retirement Plan and Tyco
Supplemental Executive Retirement Plan as in effect prior to the Distribution
Date (subject to such amendments as necessary to comply with Code Section 409A)
and the Electronics Deferred Compensation Liabilities under the Tyco
Supplemental Savings and Retirement Plan and Tyco Supplemental Executive
Retirement Plan as of the Distribution Date shall be transferred to such plans.

(ii)           All elections by Electronics
Employees, and Former Electronics Employees that were in effect under the terms
of the applicable Electronics

 

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Deferred Compensation
Plan immediately prior to the Distribution Date shall continue in effect from
and after the Distribution Date until a new election that by its terms
supersedes the prior election is made by such Electronics Employee or Former
Electronics Employee in accordance with the terms of the applicable Electronics
Deferred Compensation Plan and consistent with the provisions of Code
Section 409A to the extent applicable.

(iii)          Payments to Electronics Employees and
Former Electronics Employees under the Electronics Deferred Compensation Plans
shall be made by Electronics or one of its Subsidiaries or Affiliates as determined
in the sole discretion of Electronics.

(c)           Tyco
Deferred Compensation Plans.

(i)            Effective as of the Distribution
Date, Tyco (or any one of its Subsidiaries or Affiliates) shall be solely
responsible for the satisfaction of all Liabilities under the Tyco Deferred
Compensation Plans and Liabilities with respect to nonqualified deferred
compensation plan benefits for Tyco Employees and Former Tyco Employees under
the Tyco Supplemental Savings and Retirement Plan and Tyco Supplemental
Executive Retirement Plan (the “Tyco Deferred Compensation Liabilities”).

(ii)           Payments to Tyco Employees and Former
Tyco Employees under the Tyco Deferred Compensation Plans shall be made by Tyco
or one of its Affiliates as determined in the sole discretion of Tyco.

Section
6.5             Pension Plans.

(a)           Healthcare
Pension Plans.

(i)            As of the Distribution Date,
Healthcare shall Assume sponsorship of and be solely responsible for the
management and administration of, and except as otherwise provided below, be
responsible for all Assets and Liabilities under the pension plans listed in Schedule
6.5(a) and any other pension plans in the United States or any other
country covering Healthcare Employees or Former Healthcare Employees, other
than those listed in Schedule 6.5(b) and specifically identified as
Electronics Pension Plans or listed in Schedule 6.5(c) and specifically
identified as Tyco Retained Pension Plans (with such plans to be solely
Healthcare’s responsibility to be referred to as the “Healthcare Pension
Plans”).

(ii)           For Healthcare Pension Plans that are
intended to be tax-qualified defined benefit pension plans under Sections
401(a) and 501(a) of the Code (the “Healthcare US Pension Plans”):

(A)          Effective as of the Distribution Date,
Healthcare shall take all such actions necessary to (i) become the plan sponsor
of the Healthcare US Pension Plans (ii) establish an investment committee and
an

 

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administrative committee,
as appropriate, as named fiduciaries of the Healthcare US Pension Plans (iii)
appoint members of the investment committee and the administrative committee
and (iv) establish a new trust or trusts designed to be tax exempt under
Section 501(a) of the Code and hold the assets of the Healthcare US Pension Plans
(the “Healthcare Master Trust”).

(B)           As soon as practicable after the Tyco
Investment Committee confirms that each of the actions in Section
6.5(a)(ii)(A) above have been completed, but not prior to the Healthcare
Distribution Date, Tyco shall cause at least 90% of the Assets of the Tyco
Master Trust attributable to the Healthcare US Pension Plans listed in Schedule
6.5(a) (using values as of January 1, 2007) to be transferred to the Healthcare
Master Trust; the balance of the Tyco Master Trust Assets attributable to such
Healthcare US Pension Plans shall be transferred to the Healthcare Master Trust
within 120 days of the Healthcare Distribution Date.

(C)           Healthcare and Tyco acknowledge and
agree that such transfer of Assets and Liabilities will comply with Sections
401(a)(12), 414(l) and 411(d)(6) of the Code and the regulations thereunder and
that the value of the Assets to be transferred as determined under Section
414(l) of the Code and the regulations thereunder shall be adjusted from the
period between January 1, 2007 and the transfer date to reflect the investment
experience under the Tyco Master Trust using the assumptions and methodology
which the Pension Benefit Guaranty Corporation would have used under Section
4044 of ERISA, the Healthcare Pension Plan’s allocable share of expenses and
any benefit distributions made to Healthcare Employees.  With respect to the transfer of Assets and
Liabilities from the Kendall/ADT Pension Plan and the Tyco Electronics Pension
Plan, assumptions and methodology are set forth in Schedule 6.5(d).

(D)          The Healthcare US Pension Plans will
continue to participate in the Tyco Master Trust subject to Tyco’s direction of
the assets of the Tyco Master Trust without distinction as to any particular
participating plan for a transition period not exceeding 120 days following the
Healthcare Distribution Date; provided, that Healthcare holds Tyco harmless
with respect to such continued participation.

(iii)          Following the Distribution Date,
eligible participants shall accrue benefits (to the extent that such Healthcare
Pension Plans are not frozen) and receive service credit, as applicable, under
the Healthcare Pension Plans in accordance with the terms and conditions of the
relevant Healthcare Pension Plan; provided, however, that the foregoing shall
in no way alter any right of Healthcare, subsequent to the Distribution Date,
to amend or terminate any of the Healthcare Pension Plans in accordance with
their terms and applicable Law.

 

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Healthcare and Tyco shall
reasonably cooperate with each other in order to facilitate the foregoing
provisions of this Section 6.5.

(iv)          Notwithstanding any other provision
set forth in this Agreement, (A) Healthcare and the Healthcare Pension Plans
shall indemnify and hold harmless Tyco, the Tyco Retained Pension Plans,
Electronics and the Electronics Pension Plans (and each of their respective Affiliates,
Subsidiaries, officers, employees, agents and fiduciaries) with respect to any
and all Liabilities in respect of the participants in the Healthcare Pension
Plans relating to the provision of pension benefits pursuant to the Healthcare
Pension Plans and (B) Tyco, the Tyco Retained Pension Plans, Electronics and
the Electronics Pension Plans shall indemnify and hold harmless Healthcare and
the Healthcare Pension Plans (and each of their respective Affiliates,
Subsidiaries, officers, employees, agents and fiduciaries) with respect to any
and all Liabilities in respect of the participants in the Tyco Retained Pension
Plan and Electronics Plans relating to the provision of pension benefits
pursuant to the Tyco Retained Pension Plans and Electronics Plans.

(b)           Electronics
Pension Plans.

(i)            As of the Distribution Date,
Electronics shall Assume sponsorship of and be solely responsible for the management
and administration of, and except as otherwise provided below, be responsible
for all Assets and Liabilities under the pension plans listed in Schedule
6.5(a) and any other pension plan in the United States or any other country
covering Electronics Employees, other than those listed in Schedule 6.5(a)
and specifically identified as Healthcare Pension Plans or listed in Schedule
6.5(c) and specifically identified as Tyco Retained Pension Plans (with
such plans to be solely Electronics’ responsibility referred to as the “Electronics
Pension Plans”).

(ii)           For Electronics Pension Plans that
are intended to be tax-qualified defined benefit pension plans under Sections
401(a) and 501(a) of the Code (the “Electronics US Pension Plans”):

(A)          Effective as of the Distribution Date,
Electronics shall take all such actions necessary to (i) become the plan
sponsor of the Electronics US Pension Plans (ii) establish an investment
committee and an administrative committee, as appropriate, as named fiduciaries
of the Electronics US Pension Plans (iii) appoint members of the investment
committee and the administrative committee and (iv) establish a new trust or
trusts designed to be tax exempt under Section 501(a) of the Code and hold the
assets of the Electronics US Pension Plans (the “Electronics Master Trust”).

(B)           As soon as practicable after the Tyco
Investment Committee confirms that each of the actions in Section
6.5(b)(ii)(A) above have been completed, but not prior to the Electronics  Distribution Date,

 

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Tyco shall cause at least
90% of the Assets of the Tyco Master Trust attributable to the Electronics US
Pension Plans listed in Schedule 6.5(b) (using values as of January 1,
2007) to be transferred to the Electronics Master Trust; the balance of the
Tyco Master Trust Assets attributable to such Electronics US Pension Plans
shall be transferred to the Electronics Master Trust within 120 days of the
Electronics Distribution Date.

(C)           Electronics and Tyco acknowledge and
agree that such transfer of Assets and Liabilities will comply with Sections
401(a)(12), 414(l) and 411(d)(6) of the Code and the regulations thereunder and
that the value of the Assets to be transferred as determined under Section
414(l) of the Code and the regulations thereunder shall be adjusted from the
period between January 1, 2007 and the transfer date to reflect the investment
experience under the Tyco Master Trust using the assumptions and methodology
which the Pension Benefit Guaranty Corporation would have used under Section
4044 of ERISA, the Electronics Pension Plan’s allocable share of expenses and
any benefit distributions made to Electronics Employees.  With respect to the transfer of Assets and
Liabilities from the Kendall/ADT Pension Plan and the Tyco Electronics Pension
Plan, assumptions and methodology are set forth in Schedule 6.5(d).

(D)          The Electronics US Pension Plans will
continue to participate in the Tyco Master Trust subject to Tyco’s direction of
the assets of the Tyco Master Trust without distinction as to any particular
participating plan for a transition period not exceeding 120 days following the
Electronics Distribution Date; provided, that Electronics holds Tyco harmless
with respect to such continued participation.

(iii)          Following the Distribution Date,
eligible participants shall accrue benefits (to the extent that such Electronics
Pension Plans are not frozen) and receive service credit, as applicable, under
the Electronics Pension Plans in accordance with the terms and conditions of
the relevant Electronics Pension Plan; provided, however, that the foregoing
shall in no way alter any right of Electronics, subsequent to the Distribution
Date, to amend or terminate any of the Electronics Pension Plans in accordance
with their terms and applicable Law. 
Electronics and Tyco shall reasonably cooperate with each other in order
to facilitate the foregoing provisions of this Section 6.5.

(iv)          Notwithstanding any other provision set
forth in this Agreement, (i) Electronics and the Electronics Pension Plans
shall indemnify and hold harmless Tyco, the Tyco Retained Pension Plans,
Healthcare and the Healthcare Pension Plans (and each of their respective
affiliates, Subsidiaries, officers, employees, agents and fiduciaries) with
respect to any and all Liabilities in respect of the participants in the Electronics
Pension Plans relating to the provision of pension benefits pursuant to the
Electronics Pension Plans and (ii) Tyco, the Tyco Retained Pension Plans,
Healthcare and the Healthcare Pension

 

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Plans shall indemnify and
hold harmless Electronics and the Electronics Pension Plans (and each of their
respective affiliates, Subsidiaries, officers, employees, agents and
fiduciaries) with respect to any and all Liabilities in respect of the
participants in the Tyco Retained Pension Plans and Healthcare Pension Plans
relating to the provision of pension benefits pursuant to the Tyco Retained
Pension Plans and Healthcare Pension Plans.

(c)           Tyco
Retained Pension Plans.

(i)            Following the Distribution Date,
Tyco shall retain sole responsibility for all benefit obligations, Assets and
Liabilities for the pension plans listed in Schedule 6.5(c) and any
other pension plan in the United States or any other country covering Tyco
Employees, other than those listed in Schedule 6.5(a) and
specifically identified as Healthcare Pension Plans or listed in Schedule
6.5(b) and specifically identified as Electronics Pension Plans (the “Tyco
Retained Pension Plans”), and neither Healthcare nor Electronics shall have
any obligation with respect thereto.

(ii)           Following the Distribution Date, eligible
participants in the Tyco Retained Pension Plans shall continue to accrue
benefits (to the extent that such Tyco Retained Pension Plans are not frozen)
and receive service credit, as applicable under the Tyco Retained Pension Plans
in accordance with the terms and conditions of the relevant Tyco Retained
Pension Plan.  Nothing contained in this
Agreement shall alter in any way the right of Tyco, subsequent to the
Distribution Date, to amend or terminate any Tyco Retained Pension Plan in
accordance with its terms and applicable Law.

(iii)          Notwithstanding any other provision
set forth in this Agreement, (A) Tyco and the Tyco Retained Pension Plans shall
indemnify and hold harmless Healthcare, the Healthcare Pension Plans,
Electronics and the Electronics Pension Plans (and each of their respective Affiliates,
Subsidiaries, officers, employees, agents and fiduciaries) with respect to any
and all Liabilities in respect of the participants in the Tyco Retained Pension
Plans relating to the provision of pension benefits pursuant to the Tyco Retained
Pension Plans and (B) Healthcare, the Healthcare Pension Plans, Electronics and
the Electronics Pension Plans shall indemnify and hold harmless Tyco and the
Tyco Retained Pension Plans (and each of their respective Affiliates,
Subsidiaries, officers, employees, agents and fiduciaries) with respect to any
and all Liabilities in respect of the participants in the Healthcare Pension
Plans and Electronics Pension Plans relating to the provision of pension
benefits pursuant to the Healthcare Pension Plans and Electronics Pension Plans.

Section
6.6             Retirement Savings
Plans.

(a)           Healthcare Retirement Savings Plans.

 

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(i)            As of the Distribution Date,
Healthcare shall Assume sponsorship of and all Assets and Liabilities under the
Tyco International (US) Inc. Retirement Savings and Investment Plan II, the
Tyco International (US) Inc. Retirement Savings and Investment Plan IX, any
other defined contribution retirement plans listed in Schedule 6.6(a),
and any other savings plans in the United States or any other country covering
Healthcare Employees, other than those listed in Schedule 6.6(b) and
specifically identified as Electronics Savings Plans or listed in Schedule
6.6(c) and specifically identified as Tyco Retained Savings Plans (the “Healthcare
Savings Plans”).

(ii)           On or shortly prior to the Healthcare
Distribution Date, Tyco shall cause the value of Assets of the Tyco International
(US) Inc. Retirement Savings Master Trust attributable to accounts of U.S.
Healthcare Employees to be transferred to a trust or trusts created for the
Healthcare Savings Plans in the United States in a “transfer of assets or
liabilities” in accordance with Section 414(l) of the Code and
Section 208 of ERISA and the respective rules and regulations promulgated
thereunder.  The Assets to be transferred
will be in the form of cash or other property, as Tyco and Healthcare shall
mutually agree prior to such transfer. 
In addition, on or shortly prior to the Healthcare Distribution Date,
the deed of trust established for the Tyco International (US) Inc. Retirement
Savings and Investment Plan IX — Puerto Rico shall be transferred to
Healthcare.

(iii)          Effective as of the Distribution Date,
Healthcare shall take all such actions necessary to become the plan sponsor of
the Healthcare Savings Plans, establish an investment committee and an
administrative committee as named fiduciaries of the Healthcare Savings Plans, appoint
members of the investment committee and the administrative committee, as
appropriate, and establish a new trust or trusts for the Healthcare Savings
Plans in the United States designed to be tax exempt under Section 501(a) of
the Code and hold the assets of the Healthcare Savings Plans.

(iv)          Nothing contained in this Agreement
shall alter in any way the right of Healthcare, subsequent to the Distribution
Date, to amend or terminate the Healthcare Savings Plans in accordance with its
terms and applicable Law.

(v)           Notwithstanding any other provision
set forth in this Agreement, (A) Healthcare and the Healthcare Saving Plans
shall indemnify and hold harmless Tyco, the Tyco Retained Savings Plans,
Electronics and the Electronics Savings Plans (and each of their respective Affiliates,
Subsidiaries, officers, employees, agents and fiduciaries) with respect to any
and all Liabilities in respect of the participants in the Healthcare Saving
Plans relating to the provision of benefits pursuant to the Healthcare Saving
Plans and (B) Tyco, the Tyco Retained Savings Plans, Electronics and the
Electronics Savings Plans shall indemnify and hold harmless Healthcare and the
Healthcare Savings Plans (and each of their respective Affiliates,
Subsidiaries, officers, employees, agents and fiduciaries) with respect to any
and all Liabilities in respect of the participants in the Tyco Retained Savings
Plans and Electronics Savings Plans relating to the

 

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provision of benefits
pursuant to the Tyco Retained Savings Plans and Electronics Savings Plans.

(b)           Electronics Retirement Savings
Plans.

(i)            As of the Distribution Date,
Electronics shall Assume sponsorship of and all Assets and Liabilities under
the Tyco International (US) Inc. Retirement Savings and Investment Plan I, any
defined contribution retirement plans listed in Schedule 6.6(b), and any
other savings plans in the United States or any other country covering
Electronics Employees, other than those listed in Schedule 6.6(a) and
specifically identified as Healthcare Savings Plans or listed in Schedule
6.6(c) and specifically identified as Tyco Retained Savings Plans (the “Electronics
Savings Plans”).

(ii)           On or shortly prior to the
Electronics Distribution Date, Tyco shall cause the value of Assets of the Tyco
International (US) Inc. Retirement Savings Master Trust attributable to
accounts of U.S. Electronics Employees to be transferred to a trust or trusts
created for the Electronics Savings Plans in the United States in a “transfer
of assets or liabilities” in accordance with Section 414(l) of the Code
and Section 208 of ERISA and the respective rules and regulations
promulgated thereunder.  The Assets to be
transferred will be in the form of cash or other property, as Tyco and
Electronics shall mutually agree prior to such transfer.

(iii)          Effective as of the Distribution Date,
Electronics shall take all such actions necessary to become the plan sponsor of
the Electronics Savings Plans, establish an investment committee and an
administrative committee as named fiduciaries of the Electronics Savings Plans
and appoint members of the investment committee and the administrative
committee, as appropriate, and establish a new trust or trusts for the
Electronics Savings Plans in the United States designed to be tax exempt under
Section 501(a) of the Code and hold the assets of the Electronics Savings
Plans.

(iv)          Nothing contained in this Agreement
shall alter in any way the right of Electronics, subsequent to the Distribution
Date, to amend or terminate the Electronics Savings Plans in accordance with
its terms and applicable Law.

(v)           Notwithstanding any other provision
set forth in this Agreement, (A) Electronics and the Electronics Saving Plans
shall indemnify and hold harmless Tyco, the Tyco Retained Savings Plans,
Healthcare and the Healthcare Savings Plans (and each of their respective Affiliates,
Subsidiaries, officers, employees, agents and fiduciaries) with respect to any
and all Liabilities in respect of the participants in the Electronics Saving
Plans relating to the provision of benefits pursuant to the Electronics Saving
Plans and (B) Tyco, the Tyco Retained Savings Plans, Healthcare and the
Healthcare Savings Plans shall indemnify and hold harmless Electronics and the
Electronics Savings Plans (and each of their respective Affiliates,
Subsidiaries, officers, employees, agents and

 

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fiduciaries) with respect
to any and all Liabilities in respect of the participants in the Tyco Retained
Savings Plans and Healthcare Savings Plans relating to the provision of
benefits pursuant to the Tyco Retained Savings Plans and Healthcare Savings
Plans.

(c)           Tyco Retirement Savings Plans.  Following the Distribution Date, Tyco shall
retain sole responsibility for all benefit obligations and Liabilities under
the Tyco International (US) Inc. Retirement Savings and Investment Plan III,
the Tyco International (US) Inc. Retirement Savings and Investment Plan IV, the
Tyco International (US) Inc. Retirement Savings and Investment Plan V, the Tyco
International (US) Inc. Retirement Savings and Investment Plan VI, any defined
contribution retirement plans listed in Schedule 6.6(c), and any other
savings plans in the United States or any other country covering Tyco
Employees, other than those listed in Schedule 6.6(a) and specifically
identified as Healthcare Savings Plans or listed in Schedule 6.6(b) and
specifically identified as Electronics Savings Plans (the “Tyco Retained
Savings Plans”).  Eligible Tyco
Participants shall continue accruing benefits under the Tyco Retained Savings
Plan in accordance with the terms and conditions of the Tyco Retained Savings
Plan.  Nothing contained in this
Agreement shall alter in any way the right of Tyco, subsequent to the
Distribution Date, to amend or terminate the Tyco Retained Savings Plan in
accordance with its terms and applicable Law.

Section 6.7             Retiree Medical Benefits.  Following the Distribution Date: (a) Tyco
shall be solely responsible for the satisfaction of all retiree medical and
retiree insurance obligations with respect to the plans identified in Schedule
6.7(a) (the “Tyco Retiree Medical Plans”); (b) Healthcare shall be
solely responsible for the satisfaction of all retiree medical and retiree
insurance obligations with respect to plans identified in Schedule 6.7(b)
(the “Healthcare Retiree Medical Plans”); and (c) Electronics shall be
solely responsible for the satisfaction of all retiree medical and retiree
insurance obligations with respect to the plans identified in Schedule
6.7(c) (the “Electronics Retiree Medical Plans”).  The Parties agree that each Party and the
retiree medical plans described above for which it is responsible (and each of
their respective Affiliates, Subsidiaries, officers, employees, agents and
fiduciaries) shall indemnify and hold harmless each other Party and the retiree
medical plans for which they are responsible (and each of their respective Affiliates,
Subsidiaries, officers, employees, agents and fiduciaries) with respect to any
and all Liabilities with respect to retiree medical and retiree insurance
obligations under the retiree medical plans for which they are responsible.

Section
6.8             Health, Welfare and
Fringe Benefit Plans.

(a)           Health
Plans.

(i)            Not later than the Distribution
Date, Healthcare shall establish the Healthcare Health Plans and Electronics
shall establish the Electronics Health Plans, each effective no later than the
Distribution Date and, correspondingly, Healthcare Employees and Electronics
Employees shall cease participating in the Tyco Health Plans on the dates the
new plans are established.  The newly established
Healthcare Health Plans and Electronics Health Plans shall be substantially
similar to the Tyco Health Plans.  After
the Distribution Date: (A)

 

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Healthcare shall be
solely responsible for the administration of the Healthcare Health Plans and
solely responsible for the payment of all employer-related costs in
establishing and maintaining the Healthcare Health Plans, and for the
collection and remittance of participant contributions and premiums and shall
establish and appoint members to a benefits review committee to review
Healthcare Health Plan claims, (B) Electronics shall be solely responsible for
the administration of the Electronics Health Plans and solely responsible for
the payment of all employer-related costs in establishing and maintaining the
Electronics Health Plans, and for the collection and remittance of participant
contributions and premiums and shall establish and appoint members to a
benefits review committee to review Electronics Health Plan claims, and (C)
Tyco shall retain sole responsibility for all benefit obligations under the
Tyco Health Plans and sole responsibility for the payment of all
employer-related costs in maintaining the Tyco Health Plans, and for the
collection and remittance of participant contributions and premiums.

(ii)           Any determination made or settlements
entered into by Tyco prior to the Distribution Date with respect to claims
incurred under the Tyco Health Plans by Healthcare Employees, Former Healthcare
Employee, Electronics Employees and Former Electronic Employees shall be final
and binding.  Healthcare and Electronics
shall retain financial and administrative (“run-out “) Liability and all
related obligations and responsibilities for all claims incurred by their
respective employees and former employees while Healthcare Employees and
Electronics Employees are participants in the Tyco Health Plans, including any
claims that were administered by Tyco as of, on, or after such date.  Any such run-out Liability and all related
claims, charges, and expenses shall be settled in a manner consistent with past
practices and policies, including an interim accounting and a final accounting
between Tyco, Healthcare and Electronics. 
As of the Distribution Date, the reserve included in Tyco’s financial
statements for “Incurred But Not Reported” medical and dental expenses (A)
attributable to Healthcare Employees and Former Healthcare Employees shall be
transferred to Healthcare, and (B) attributable to Electronics Employees and
Former Electronics Employees shall be transferred to Electronics.

(iii)          As of the date that the Healthcare
Health Plans are established, any COBRA Liabilities attributable to any
Healthcare Employee or Former Healthcare Employee (or a qualified beneficiary
of such individuals) that were originally obligations under the Tyco Health
Plans shall become a Healthcare Liability. 
Effective as of the date Healthcare Employees cease participating in the
Tyco Health Plans, Healthcare shall be solely responsible for compliance with
the health care continuation coverage requirements of COBRA and the Healthcare
Health Plans for Healthcare Employees, Former Healthcare Employees and their
qualified beneficiaries (as such term is defined under COBRA) regardless as to
whether such obligation arose under the Tyco Health Plans or the Healthcare
Health Plans.

 

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(iv)          As of the date that the Electronics
Health Plans are established, any COBRA Liabilities attributable to any
Electronics Employee or Former Electronics Employees (or a qualified
beneficiary of such individuals) that were originally obligations under the
Tyco Health Plans shall become an Electronics 
Liability.  Effective as of the
date Electronics Employees cease participating in the Tyco Health Plans,
Electronics shall be solely responsible for compliance with the health care
continuation coverage requirements of COBRA and the Electronics Health Plans
for Electronics Employees, Former Electronics Employees and their qualified
beneficiaries (as such term is defined under COBRA) regardless as to whether
such obligation arose under the Tyco Health Plans or the Electronics Health
Plans.

(v)           The Healthcare Health Plan and the
Electronics Health Plan shall each provide that each eligible Healthcare
Employee, Former Healthcare Employee, Electronics Employee or Former
Electronics Employee, as applicable, will receive credit in 2007 for any
co-payments and deductibles paid under a Tyco Health Plan prior to the
Distribution Date in satisfying any applicable deductible or out-of-pocket
requirements under the Healthcare Health Plan or the Electronics Health Plan, as
applicable.  The Healthcare Health Plan
and the Electronics Health Plan shall each also provide that they shall cover
any pre-existing conditions that are recognized under the Tyco Health Plan.  Additionally, the Healthcare Health Plan and
the Electronics Health Plan shall each also provide any other similar benefit
in order to provide coverage that is generally unchanged from the Tyco Health
Plan.

(b)           Section
125 Plans.

(i)            Effective on the date that
Healthcare establishes the Healthcare Health Plans, Healthcare shall also
establish, or cause to be established, a Healthcare Section 125 Plan and on and
after that date Healthcare shall be solely responsible for the Healthcare
Section 125 Plan.  Healthcare Employees
shall continue to participate in the Tyco Section 125 Plan until the date
Healthcare establishes the Healthcare Section 125 Plan.  The existing elections for Healthcare
Employees participating in the Tyco Section 125 Plan and for newly-eligible
employees of Healthcare who elect to participate in the Tyco Section 125 Plan
shall remain in effect in the Healthcare Section 125 Plan through the end of
the applicable Section 125 plan year (including any grace period) in which
Healthcare Employees cease to participate in the Tyco Section 125 Plan.

(ii)           Effective on the date that
Electronics establishes the Electronics Health Plans, Electronics shall also
establish, or cause to be established, an Electronics Section 125 Plan and on
and after that date Electronics shall be solely responsible for the Electronics
Section 125 Plan.  Electronics Employees
shall continue to participate in the Tyco Section 125 Plan until the date
Electronics establishes the Electronics Section 125 Plan.  The existing elections for Electronics
Employees participating in the Tyco Section 125 Plan and for newly-eligible
employees of Electronics who elect to participate in the Tyco Section 125

 

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Plan shall remain in
effect in the Electronics Section 125 Plan through the end of the applicable
Section 125 plan year (including any grace period) in which Electronics
Employees cease to participate in the Tyco Section 125 Plan.

(c)           Severance Plans.  Not later than the Distribution Date,
Healthcare shall establish the Healthcare Severance Plans and Electronics shall
establish the Electronics Severance Plans, each effective as of the
Distribution Date and, correspondingly, Healthcare Employees and Electronics
Employees shall cease participating in the Tyco Severance Plans on the
Distribution Date.  After the
Distribution Date: (i) Healthcare shall be solely responsible for the
administration of the Healthcare Severance Plans and solely responsible for the
payment of all employer-related costs in establishing and maintaining the
Healthcare Severance Plans, (ii) Electronics shall be solely responsible for
the administration of the Electronics Severance Plans and solely responsible
for the payment of all employer-related costs in establishing and maintaining
the Electronics Severance Plans, and (iii) Tyco shall retain sole
responsibility for all benefit obligations under the Tyco Severance Plans and
shall be solely responsible for the payment of all employer-related costs in
maintaining the Tyco Severance Plans.

(d)           Disability Plans.  Not later than the Distribution Date,
Healthcare shall establish the Healthcare Disability Plans and Electronics
shall establish the Electronics Disability Plans, each effective no later than
the Distribution Date and, correspondingly, Healthcare Employees and Electronics
Employees shall cease participating in the Tyco Disability Plans on the dates
the new plans are established and shall begin participating in the Healthcare
Disability Plans or Electronics Disability Plans, as applicable.  After the Distribution Date: (i) Healthcare
shall be solely responsible for the administration of the Healthcare Disability
Plans and solely responsible for the payment of all employer-related costs in
establishing and maintaining the Healthcare Disability Plans, (ii) Electronics
shall be solely responsible for the administration of the Electronics
Disability Plans and solely responsible for the payment of all employer-related
costs in establishing and maintaining the Electronics Disability Plans, and
(iii) Tyco shall retain sole responsibility for all benefit obligations under
the Tyco Disability Plans and shall be solely responsible for the payment of
all employer-related costs in maintaining the Tyco Disability Plans.

(e)           Group Insurance Plans.  Not later than the Distribution Date, Healthcare
shall establish the Healthcare Group Insurance Plans and Electronics shall
establish the Electronics Group Insurance Plans effective as of the
Distribution Date and, correspondingly, Healthcare Employees and Electronics
Employees shall cease participating in the Tyco Group Insurance Plans on the
dates the new plans are established and shall begin participating in the
Healthcare Group Insurance Plans or the Electronics Group Insurance Plans, as
applicable.  After the Distribution Date:
(i) Healthcare shall be solely responsible for the administration of the
Healthcare Group Insurance Plans and solely responsible for the payment of all
employer-related costs in establishing and maintaining the Healthcare Group
Insurance Plans,  (ii) Electronics shall
be solely responsible for the administration of the Electronics Group Insurance
Plans and solely responsible for the payment of all employer-related costs in
establishing and maintaining the Electronics Group Insurance Plans, and (iii)
Tyco shall retain sole

 

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responsibility for all
benefit obligations under the Tyco Group Insurance Plans and shall be solely
responsible for the payment of all employer-related costs in maintaining the
Tyco Group Insurance Plans.

(f)            Fringe Benefits.  Effective as of the Distribution Date, each
of the Parties shall be responsible for establishing (as necessary) and
maintaining its own fringe benefit plans, including any employee assistance
program, educational assistance program, adoption assistance program and any
other fringe benefit plans, programs and arrangements.  Healthcare shall Assume financial and
administrative Liability and all related obligations and responsibilities with
respect to claims for such fringe benefits incurred by Healthcare Employees and
Former Healthcare Employees prior to the Distribution Date; Electronics shall Assume
financial and administrative Liability and all related obligations and
responsibilities with respect to claims for such fringe benefits incurred by
Electronics and Former Electronics Employees prior to the Distribution Date;
and Tyco shall retain financial and administrative Liability and all related
obligations and responsibilities with respect to claims for such fringe
benefits incurred by Tyco Employees and Former Tyco Employees prior to the
Distribution Date.

(g)           Paid Time Off and Payroll.  Effective as of the Distribution Date, each
Party shall establish or retain their own paid time off policy and (i) any
earned but unused paid time off (including vacation pay) that a Healthcare
Employee is entitled to as of the Distribution Date will be rolled forward (as
necessary) into the Healthcare paid time off policy and provided in accordance
with that policy; (ii) any earned but unused paid time off (including vacation
pay) that an Electronics Employee is entitled to as of the Distribution Date
will be rolled forward (as necessary) into the Electronics paid time off policy
and provided in accordance with that policy; and (iii) any earned but unused
paid time off (including vacation pay) that a Tyco Employee is entitled to as
of the Distribution Date will be continued by the Tyco paid time off policy and
provided in accordance with that policy. 
On and after the Distribution Date, each Party shall have no liability
for paid time off on behalf of another Party’s employees.

(h)           Annual Bonus Plans.  With respect to any annual bonus or incentive
plan not otherwise described in this Agreement, each Party (or their applicable
Affiliate or Subsidiary) shall be responsible for all Liabilities and fully
perform, pay and discharge all annual bonus obligations relating to any annual
incentive plan for their respective employees and former employees for 2007 and
thereafter.  In no event shall any
employee receive a duplication of such benefits hereunder.

Section
6.9             Cooperation and
Administrative Provisions.

(a)           Notwithstanding anything herein to
the contrary, the Parties shall reasonably cooperate and work together to unify
and consolidate all relevant data, payroll and employment information on
regular timetables, make certain that each applicable entity’s data and records
are correct and updated on a timely basis, and cooperate as needed with respect
to (i) any litigation with respect to an employee benefit plan or arrangement
contemplated by this Agreement, (ii) an audit of an employee benefit plan or
arrangement contemplated by this Agreement by the Internal Revenue Service,

 

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Department of Labor or any
other Government Entity, and (iii) seeking a determination letter, private
letter ruling or advisory opinion from the Internal Revenue Service or
Department or Labor on behalf of any employee benefit plan or arrangement
contemplated by this Agreement; provided, however, that requests for
cooperation must be reasonable and not interfere with daily business
operations.

(b)           Notwithstanding anything herein to
the contrary, the Parties agree that they shall utilize the same equity plan
administrators for a period of 10 years following the Distribution Date.  Such equity plan administrators may be
replaced on behalf of all of the Parties at any time during this period if a
decision to replace any such equity plan administrator is made in writing by
two of the Parties, provided such decision is made in good faith to provide
ease of administration of the Tyco, Healthcare and Electronics equity plans
described in Sections 6.1, 6.2 or 6.3, or any successor
plan.

(c)           With respect to any
employees on international assignment who are listed on Schedule 6.9(c)
and who become either Healthcare Employees or Electronics Employees, (i) if
such employees are repatriated to their home countries and prior to the
Healthcare Distribution Date or the Electronics Distribution Date, as
applicable, Tyco shall pay the costs of repatriation; and (ii) if such
employees remain on international assignment through the Healthcare
Distribution Date or the Electronics Distribution Date, as applicable, (A) Tyco
shall pay the cost of assignment up to the Healthcare Distribution Date or the
Electronics Distribution Date, as applicable (except that the tax obligation
for the year of separation shall be prorated between Tyco and Healthcare or
Electronics, as applicable, as set forth in Schedule 6.9(c)), and (B)
any costs related to repatriation at some future date shall be the
responsibility of Healthcare or Electronics, as applicable.

(d)           With respect to any employees listed
on Schedule 6.1(d) subject to a retention agreement (and/or eligible for
a lump sum salary adjustment payment), if such employee transfers to Healthcare
or Electronics prior to the Healthcare Distribution Date or the Electronics
Distribution Date, as applicable, and remains in employment with Healthcare or
Electronics, as applicable, through any subsequent vesting date set forth in
such retention agreements (or offer letter for a lump sum salary adjustment
payment), Healthcare and Electronics, as applicable, shall recognize such
retention agreement (or offer letter) and be responsible for all costs
(including without limitation any employment taxes) associated with such
retention payments (and/or lump sum salary adjustment payment).  The Parties hereby agree that financial
statements for 2007 shall reflect that payments with respect to this paragraph
(d) have been made between the Parties prior to the Distribution Date.

(e)           The Parties shall share, or cause to
be shared, all information on participants in the Healthcare Plans, Electronics
Plans and Tyco Retained Plans that is necessary and appropriate for the
efficient and accurate administration of the Healthcare Plans, Electronics
Plans and Tyco Retained Plans, including (but not limited to) information reasonably
necessary to respond to claims for benefits made by participants and
information on expenses incurred by Healthcare Plans and Electronics Plans
prior to the Distribution Date so that Healthcare and Electronics may invoice
and pay administrative expenses from their respective Plan trusts as described
in paragraph (g)

 

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below.  The Parties and their respective authorized
agents shall, subject to applicable laws of confidentiality and data
protection, be given reasonable and timely access to, and may make copies of,
all information relating to the subjects of this Article VI to the extent
necessary or appropriate for such administration.  Each of the Parties agree, upon reasonable
request, to provide financial, operational and other information on each
Healthcare Plan, Electronics Plan and Tyco Retained Plan, including (but not
limited to) information on a plan’s assets and liabilities, at a level of
detail reasonably necessary and appropriate for the efficient and accurate
administration of each of the Healthcare Plans, Electronics Plans and Tyco
Retained Plans.  Notwithstanding the
foregoing, if any such information described in this Section 6.9(e)
cannot be reasonably obtained without additional cost, the Parties shall agree
to reimburse each of the other Parties for all additional third-party costs and
such other reasonable costs of obtaining the information.  To the extent that the Healthcare Health
Plans, the Electronics Health Plans and the Tyco Health Plans share protected
health information (“PHI”), the Healthcare Health Plans, Electronics
Health Plans and Tyco Health Plans hereby agree to enter into appropriate
business associate agreements to cover the sharing of PHI, as required by the
Health Insurance Portability and Accountability Act of 1996 (“HIPAA”).

(f)            Each of Healthcare and Electronics
agrees to hold Tyco harmless with respect to any Liabilities related to actions
taken to establish the Healthcare Plans and the Electronics Plans (and related
third party administrative agreements) prior the Distribution Date.

(g)           To the extent not covered elsewhere
in this Agreement, with respect to expenses and costs incurred on behalf of a
Healthcare Plan, Electronics Plan or Tyco Retained Plan: (i) Healthcare shall
be responsible, through either direct payment or reimbursement to Tyco or
Electronics, as applicable, for its allocable share of actual third party
and/or vendor costs and expenses incurred by any member of the Healthcare Group
or the Healthcare Plans, (ii) Electronics shall be responsible, through either
direct payment or reimbursement to Tyco or Healthcare, as applicable, for its
allocable share of actual third party and/or vendor costs and expenses incurred
by any member of the Electronics Group or the Electronics Plans, and (iii) Tyco
shall be responsible, through either direct payment or reimbursement to
Healthcare or Electronics, as applicable, for its allocable share of actual
third party and/or vendor costs and expenses incurred by any member of the Tyco
Group or the Tyco Retained Plans.  An
allocable share of any such costs and expenses will be determined in a manner
consistent with the manner in which the allocable share of such costs and
expenses was determined prior to the Distribution Date.  The Parties agree to pay for any third-party
costs associated partially or entirely with their respective employee benefit
plans associated with this Distribution following the Distribution Date.

(h)           To the extent not covered elsewhere
in this Agreement, with respect to all employee benefit plans, policies, programs, payroll
practices, and arrangements maintained outside of the United States, the
Parties agree that they shall reasonably cooperate and work together to
facilitate any transfer of employee benefit plans, policies, programs, payroll
practices, and arrangements as necessary.

 

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Section
6.10           Approval of Plans; Terms
of Participation by Employees in Plans.

(a)           Approval of Plans.  On or prior to the applicable Distribution
Date, the Parties shall take all actions as may be necessary to approve the
stock-based employee benefit plans of Healthcare or Electronics, as applicable,
in order to satisfy the requirements of Rule 16b-3 under the Exchange Act and
the applicable rules and regulations of the NYSE.

(b)           Non-Duplication of Benefits.  The Healthcare Plans, Electronics Plans and
Tyco Retained Plans shall not provide benefits that duplicate benefits provided
to a participant by a corresponding Healthcare Plan, Electronics Plan, or Tyco
Retained Plans.  The Parties shall agree
on methods and procedures, including amending the respective plan documents, to
prevent Healthcare Employees, Former Healthcare Employees, Electronics
Employees, Former Electronics Employees, Tyco Employees and Former Tyco
Employees from receiving duplicate benefits from the Healthcare Plans,
Electronics Plans, and Tyco Retained Plans; provided, that nothing shall
prevent Healthcare from unilaterally amending the Healthcare Plans to avoid
such duplication, nothing shall prevent Electronics from unilaterally amending
the Electronics Plans to avoid such duplication, and nothing shall prevent Tyco
from unilaterally amending the Tyco Retained Plans to avoid such duplication.

(c)           Service Credits under Plans.  Except as may be specified in Schedule 6.10(c),
service with any member of the Tyco controlled group prior to the Distribution
Date shall be credited under the Healthcare Plans, Electronics Plans and Tyco
Retained Plans to the extent and for the express purposes set forth (including,
as applicable and without limitation: eligibility, vesting, company match
levels, subsidies, recognition of pre-existing credit and credit for amounts of
co-pays, out-of-pocket maximums and deductibles, but not for benefit accrual
purposes under pension plans) under the applicable Healthcare Plan, Electronics
Plan or Tyco Retained Plan, except to the extent duplication of benefits would
result; provided, however, that in the event an employee or former employee of
one of the Parties (or its Subsidiaries or Affiliates) becomes employed by one
of the other Parties (or its Subsidiaries or Affiliates) after December 31,
2007, such employee or former employee’s service with any member of the Tyco
controlled group prior to the Distribution Date need not be credited by the new
employer except to the extent required by Law. 
Notwithstanding the foregoing, in the event of any conflict between this
paragraph (c) and the terms of any Healthcare Plan, Electronics Plan or Tyco Retained
Plan, the express terms of such plan shall govern.

(d)           Plan Elections.  Except as may be specifically provided
otherwise under this Agreement or applicable Law, all participant elections
(including, without limitation, deferral elections, payment elections,
beneficiary designations, qualified domestic relations orders, qualified
medical child support orders and loan agreements) with respect to the
participation of a Healthcare Employee, Former Healthcare Employee, Electronics
Employee, Former Electronics Employee, Tyco Employee or Former Tyco Employee in
a Tyco employee benefit arrangement shall be transferred to and be in full
force and effect under the corresponding and applicable Healthcare Plan or Electronics
Plan in accordance with the terms of each such applicable plan and to the
extent permissible

 

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under such plan, until
such elections are replaced or revoked by the employee who made such election.

Section 6.11           Tax Consequences.  For Tax purposes, the Parties agree that the
treatment of all of the equity compensation and deferred compensation
arrangements set forth in this Section 6 shall be treated in accordance
with Section 6 of the Tax Sharing Agreement.

ARTICLE VII

TYCO CONTINGENT ASSETS AND ASSUMED TYCO CONTINGENT LIABILITIES

Section
7.1             Tyco Contingent Assets
and Assumed Tyco Contingent Liabilities.

(a)           Tyco Contingent Assets.  To the extent that a Party or any member of
its Group receives from a third party any proceeds of any kind arising out of a
Tyco Contingent Asset, to the extent necessary, such Party shall, or shall
cause the applicable member of its Group to, promptly (but in no event later
than thirty (30) days following receipt thereof, unless there is a good faith
open question as to whether such proceeds are in fact Tyco Contingent Assets
and the matter has been submitted for resolution pursuant to the terms of this
Agreement, in which case, promptly following the final determination thereof)
transfer such amounts to the other Parties pursuant to and in accordance with
their respective Applicable Percentage. 
Transfers under this Section 7.1(a) are subject to the relevant Parties’
agreement (I) as to the most cost efficient means of effecting such transfer
and (II) to share any incremental costs arising as a result of such transfer; provided,
that if the relevant Parties cannot agree on a means of effecting the transfer
within thirty (30) days  from the
date that all relevant Parties have notice of the discovery of such proceeds,
then the proceeds shall be immediately transferred.

(b)           Assumed Tyco Contingent
Liabilities.  Except as otherwise
expressly set forth in this Article VII and without limiting the
indemnification provisions of Article VIII, each of Tyco, Healthcare and
Electronics shall each be responsible for its portion of Specified Shared
Expenses (allocated in accordance with Section 5.5)  (in addition to, without duplication, each
such Party’s share of any indemnifiable Losses in respect of any such Assumed Tyco
Contingent Liabilities pursuant to and in accordance with the relevant
provisions of Article VIII) related to or arising out of any Assumed Tyco
Contingent Liability; provided, that so long as any such Party is still
an Affiliate of Tyco, Tyco shall be responsible for such Party’s Applicable
Percentage of any such Assumed Tyco Contingent Liability.  Any amounts owed in respect of any Assumed Tyco
Contingent Liabilities (including reimbursement for the out-of-pocket costs and
expenses of defending, managing or providing assistance to the Managing Party
pursuant to Section 7.3(b) with respect to any Third Party Claim
that is an Assumed Tyco Contingent Liability, which shall include any amounts
with respect to a bond, prepayment or similar security or obligation required
(or determined to be advisable by the Managing Party) to be posted by the
Managing Party in respect of any claim) shall be remitted promptly after the
Party entitled to such amount provides an invoice (including reasonable
supporting information with respect thereto) to the Party or Parties owing such
amount and such costs and expenses shall be included in the calculation of the
amount of the applicable

 

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Assumed Tyco Contingent
Liability in determining the reimbursement obligations of the other Parties
with respect thereto provided  however, in the event that an
amount in excess of One Hundred Million Dollars ($100,000,000), is owed with by
the Parties to any third party or parties in lieu of remitting amounts directly
to the Party providing the invoice the owing Party may remit the owed amount
directly to the appropriate third party or parties or to a trust established by
the invoicing Party for the benefit of the Parties each Party shall contribute
its Applicable Percentage of such amount to a trust account for the benefit of
the Parties.  In furtherance of the
foregoing, the Managing Party (and the Party providing assistance to the
Managing Party pursuant to Section 7.3(b)) shall be entitled to
reimbursement by the other Parties (in an amount of one-third each) of any
out-of-pocket costs and expenses (which shall include the costs of salaries and
benefits of employees who are solely dedicated to the management or defense of
such Assumed Tyco Contingent Liability or any pro rata portion of overhead or
other costs of employing such employees which would have been incurred by such
employees’ employer regardless of the employees’ service as managing the
Assumed Tyco Contingent Liability) related to or arising out of defending or
managing any such Assumed Tyco Contingent Liability from Healthcare and Electronics,
as applicable, from time to time when invoiced, in advance of a final
determination or resolution of any Action related to an Assumed Tyco Contingent
Liability.  For U.S.  federal income Tax purposes, the Parties
shall treat the payment of Assumed Tyco Contingent Liabilities (and costs and
expenses relating to Assumed Tyco Contingent Liabilities, as the case may be)
as set forth in the Tax Sharing Agreement. 
It shall not be a defense to any obligation by any Party to pay any
amounts, whether pursuant to this Article VII or in respect of
Indemnifiable Losses pursuant to Article VIII, in respect of any Assumed
Tyco Contingent Liability that (i) such Party was not consulted in the defense
or management thereof, (ii) that such Party’s views or opinions as to the
conduct of such defense were not accepted or adopted, (iii) that such Party
does not approve of the quality or manner of the defense thereof or (iv) that
such Assumed Tyco Contingent Liability was incurred by reason of a settlement
rather than by a judgment or other determination of Liability (even if, subject
in each case to Sections 7.4 and 8.6(f), such settlement was
effected without the consent or over the objection of such Party).

Section
7.2             Management of Tyco
Contingent Assets and Assumed Tyco Contingent Liabilities.

(a)           For purposes of this Article VII,
“Managing Party” shall initially mean Tyco; provided, however,
that under certain circumstances another Party may become the Managing Party as
set forth in the Joint Defense Agreement between the Parties dated the date
hereof.

(b)           Except as provided in the Joint
Defense Agreement, the Managing Party shall, on behalf of the other Parties,
have sole and exclusive authority to commence, prosecute, manage, control,
conduct or defend (or assume the defense of) or otherwise determine all matters
whatsoever (including, as applicable, litigation strategy and choice of legal
counsel or other professionals) with respect to any Tyco Contingent Asset and,
on behalf of the other Parties, any Action or Third Party Claim with respect to
an Assumed Tyco Contingent Liability (including with respect to those Tyco
Contingent

 

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Assets and Assumed Tyco
Contingent Liabilities set forth on Schedules 1.1(15)(i) and 1.1(191)).  The Managing Party shall use its best efforts
to promptly notify the other Parties in the event that it commences an Action
with respect to a Tyco Contingent Asset; provided, that the failure to
provide such notice shall not give rise to any rights on the part of the other
Parties against the Managing Party or affect any other provision of this Section 7.2.  So long as the Managing Party has assumed and
is actively and diligently conducting the defense of any Assumed Tyco
Contingent Liability in accordance with Section 7.2(b) above, the
other Parties will not consent to the entry of any judgment or enter into any
settlement with respect to the Assumed Tyco Contingent Liability without the
prior written consent of the Managing Party (not to be delayed or withheld
unreasonably).

(c)           Each Party acknowledges that the
Managing Party may elect not to pursue any Tyco Contingent Asset for any reason
whatsoever (including a different assessment of the merits of any Action, claim
or right than the other Parties or any business reasons that may be in the best
interests of the Managing Party or a member of such Managing Party Group,
without regard to the best interests of any member of the other Groups) and
that no member of the Managing Party Group shall have any Liability to any
Person (including any member of the other Parties’ Groups) as a result of any
such determination.

(d)           The Managing Party shall on a monthly
basis, or if a material development occurs as soon as reasonably practicable
thereafter, fully inform the other Parties of the status of and developments
relating to any matter involving a Tyco Contingent Asset or Assumed Tyco
Contingent Liability and provide copies of any material document, notices or
other materials related to such matters. 
Each Party shall cooperate fully with the Managing Party in its
management of any of such Tyco Contingent Asset or Assumed Tyco Contingent
Liability and shall take such actions in connection therewith that the Managing
Party reasonably requests (including providing access to such Party’s Records
and employees as set forth in Section 7.3).

(e)           None of Tyco, Healthcare or Electronics
shall take, or permit any member of its respective Group to take, any action
(including commencing any Action) or omit to take any action that may interfere
with or that may adversely affect the rights and powers of the Managing Party
pursuant to this Article VII.

(f)            In the event of any dispute as to
whether any Asset or Liability is a Tyco Contingent Asset and/or an Assumed Tyco
Contingent Liability as set forth in Section 7.4(b), the Managing Party
may, but shall not be obligated to, commence prosecution or other assertion of
such claim or right pending resolution of such dispute.  In the event that the Managing Party
commences any such prosecution or assertion and, upon resolution of the dispute
(pursuant to Article X or otherwise), it is determined that such Asset
or Liability is not a Tyco Contingent Asset or an Assumed Tyco Contingent Liability
and that such Asset or Liability belongs to another Party, pursuant to the
provisions of this Agreement or any Ancillary Agreement, the Managing Party
shall have the right to cease the prosecution or assertion of such right or
claim and the applicable Parties shall cooperate to transfer the control
thereof to the applicable other Party.  In
such event, the

 

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applicable other Party,
shall promptly reimburse the Managing Party for all out-of-pocket costs and
expenses incurred to such date in connection with the prosecution or assertion
of such claim or right.

Section
7.3             Access to Information;
Certain Services; Expenses.

(a)           Access to Information and
Employees by the Managing Party.  Unless
otherwise prohibited by Law, in connection with the management and disposition
of any Tyco Contingent Asset and/or any Assumed Tyco Contingent Liability, each
of the Parties shall make readily available to and afford to the Managing Party
and its authorized accountants, counsel and other designated representatives
reasonable access, subject to appropriate restrictions for classified,
privileged or confidential information, to the employees, properties, and
Information of such Party and the members of such Party’s Group insofar as such
access relates to the relevant Tyco Contingent Asset or Assumed Tyco Contingent
Liability; it being understood by the Parties that such access as well as any
services provided pursuant to Section 7.3(b) below may require a
significant time commitment on the part of such Party’s employees and that any
such commitment shall not otherwise limit any of the rights or obligations set
forth in this Article VII; it also being understood that such access and
such services provided shall not unreasonably interfere with any of such Party’s
employees’ normal functions.  Nothing in
this Section 7.3(a) shall require any Party to violate any
agreement with any third party regarding the confidentiality of confidential
and proprietary information relating to that third party or its business; provided,
however, that in the event that a Party is required to disclose any such
information, such Party shall use commercially reasonable efforts to seek to
obtain such third party’s Consent to the disclosure of such information.

(b)           Certain Services.  Each of Tyco, Healthcare and Electronics
shall make available to the others, upon reasonable written request, its and
its Subsidiaries’ officers, directors, employees and agents to assist in the
management (including, if applicable, as witnesses in any Action) of any
Assumed Tyco Contingent Liabilities and Tyco Contingent Assets to the extent
that such Persons may reasonably be required in connection with the
prosecution, defense or day-to-day management of any Tyco Contingent Asset or
Assumed Tyco Contingent Liability.  In
respect of the foregoing, Schedules 1.1(15)(i) and 1.1(191) set
forth certain identified Assumed Tyco Contingent Liabilities and Tyco
Contingent Assets, respectively, and identify (but does not limit) those
employees and agents who shall assist the Managing Party in its management of
the Assumed Tyco Contingent Liabilities and Tyco Contingent Assets.

(c)           Costs and Expenses Relating to
Access by the Managing Party.  Except
as otherwise provided in any Ancillary Agreement, the provision of access and
other services pursuant to this Section 7.3 shall be at no
additional cost or expense of the Managing Party or any other Party (other than
for (i) actual out-of-pocket costs and expenses which are pre-paid or allocated
as set forth in Section 7.1 and (ii) costs incurred directly or
indirectly by such Party affording such access and other services which shall
be the responsibility of such Party), unless such costs and expenses are
incurred by Tyco in connection with the provision of services and access due to
its status as the remaining and legacy Business Entity (and not in its capacity
as the parent company of the Tyco

 

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Retained Business), in
which case such costs and expenses shall be treated as Assumed Contingent
Liabilities (and shall be borne by the other Parties accordingly).

Section
7.4             Notice Relating to Tyco
Contingent Assets and Assumed Tyco Contingent Liabilities; Disputes.

(a)           In the event that any Party or any
Member of such Party’s Group or any of their respective Affiliates, becomes
aware of (i) any Asset or Liability that may be a Tyco Contingent Asset or
Assumed Tyco Contingent Liability, (ii) any matter or occurrence that has given
or could give rise to an Assumed Tyco Contingent Liability or Tyco Contingent
Asset or (iii) any matter reasonably relevant to the Managing Party’s ongoing
or future management, prosecution, defense and/or administration of any Assumed
Tyco Contingent Liability or Tyco Contingent Asset, such Party shall promptly
(but in any event within thirty (30) days of becoming aware, unless, by its
nature the subject matter of such notice would require earlier notice) notify
each of the relevant Managing Party and the other Party of any such matter
(setting forth in reasonable detail the subject matter thereof); provided,
however, that the failure to provide such notice shall not release any
Party from any of its obligations under this Article VII except and
solely to the extent that any such Party shall have been actually prejudiced as
a result of such failure.

(b)           In the event that any Party disagrees
whether a claim, obligation, Asset and/or Liability is a Tyco Contingent Asset
or an Assumed Tyco Contingent Liability or whether such claim, obligation,
Asset or Liability is an Asset or Liability allocated to one of the Parties
pursuant to this Agreement or any Ancillary Agreement, then such matter shall
be resolved pursuant to and in accordance with the dispute resolution provisions
set forth in Article X.  In the
event that such dispute results in arbitration, the costs and expenses of such
arbitration shall be borne by the losing Party as set forth in Section 10.8.

Section 7.5             Cooperation with Governmental
Entity.  If, in connection with any Tyco
Contingent Asset or Assumed Tyco Contingent Liability, a Party is required by
Law to respond to and/or cooperate with a Governmental Entity, such Party shall
be entitled to cooperate and respond to such Governmental Entity after, to the
extent practicable under the specific circumstances, consultation with the
Managing Party of such Tyco Contingent Asset or Assumed Tyco Contingent
Liability; provided, that to the extent such consultation was not
practicable such Party shall promptly inform the Managing Party of such
cooperation and/or response to the Governmental Entity and the subject matter
thereof.  In the event that any Party is
requested or required by any Governmental Entity in connection with any Tyco
Contingent Asset or Assumed Tyco Contingent Liability pursuant to written or
oral question or request for information or documents in any legal or
administrative proceeding, review, interrogatory, subpoena, investigation,
demand, or similar process, such Party will notify the Managing Party promptly
of the request or requirement and such Party’s response thereto.

Section 7.6             Default.  In the event that one or more of the Parties
defaults in any full or partial payment in respect of any Assumed Tyco
Contingent Liability (as provided in this Article VII and in Article
VIII), including the payment of the costs and expenses of the Managing
Party, then each non-defaulting Party (including Tyco) shall be required to pay
an equal portion of the

 

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amount in default; provided, however,
that any such payment by a non-defaulting Party shall in no way release the
defaulting Party from its obligations to pay its obligations in respect of such
Assumed Tyco Contingent Liability (both for past and future obligations) 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 defaulted amounts 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 share of
the proceeds from any Tyco Contingent Asset may be used via a right of offset
to satisfy, in whole or in part, the obligations of such defaulting Party; 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.

ARTICLE VIII

INDEMNIFICATION

Section
8.1             Release of
Pre-Distribution Claims.

(a)           Except (i) as provided in Section 8.1(b),
(ii) as may be otherwise expressly provided in this Agreement or any Ancillary
Agreement and (iii) for any matter for which any Party is entitled to indemnification
or contribution pursuant to this Article VIII, each Party, for itself
and each member of its respective Group, their respective Affiliates and all
Persons who at any time prior to the Relevant Time were directors, officers,
agents or employees of any member of their Group (in their respective
capacities as such), in each case, together with their respective heirs,
executors, administrators, successors and assigns, do hereby remise, release
and forever discharge the other Parties and the other members of such other
Parties’ Group, their respective Affiliates and all Persons who at any time
prior to the Relevant Time were shareholders, directors, officers, agents or
employees of any member of such other Parties (in their respective capacities as
such), in each case, together with their respective heirs, executors,
administrators, successors and assigns, from any and all Liabilities
whatsoever, whether at Law or in equity (including any right of contribution),
whether arising under any Contract, by operation of Law or otherwise, existing
or arising from any acts or events occurring or failing to occur or alleged to
have occurred or to have failed to occur or any conditions existing or alleged
to have existed on or before the Relevant Time, including in connection with
the Plan of Separation and all other activities to implement the Distributions
and any of the other transactions contemplated hereunder and under the
Ancillary Agreements.

(b)           Nothing contained in Section 8.1(a)
and Section 2.4(a) shall impair or otherwise affect any right of any
Party, and as applicable, a member of the Party’s Group to enforce this
Agreement, any Ancillary Agreement or any agreements, arrangements, commitments
or understandings contemplated in this Agreement or any Ancillary Agreement to
continue in effect after the Relevant Time. 
In addition, nothing contained in Section 8.1(a) shall
release any person from:

(i)            any Liability Assumed, Transferred
or allocated to a Party or a member of such Party’s Group pursuant to or
contemplated by, or any other

 

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Liability of any member
of such Group under, this Agreement or any Ancillary Agreement including (A)
with respect to Tyco, any Tyco Retained Liability, (B) with respect to Healthcare,
any Healthcare Liability and (C) with respect to Electronics, any Electronics
Liability;

(ii)           any Liability for the sale, lease,
construction or receipt of goods, property or services purchased, obtained or
used in the ordinary course of business by a member of one Group from a member
of any other Group prior to the Relevant Time;

(iii)          any Liability for unpaid amounts for
products or services or refunds owing on products or services due on a
value-received basis for work done by a member of one Group at the request or
on behalf of a member of another Group;

(iv)          any Liability provided in or resulting
from any other Contract or understanding that is entered into after the
Relevant Time between any Party (and/or a member of such Party’s or Parties’
Group), on the one hand, and any other Party or Parties (and/or a member of
such Party’s or Parties’ Group), on the other hand;

(v)           any Liability with respect to an
Assumed Tyco Contingent Liability pursuant to Article VII;

(vi)          any Liability with respect to any Continuing
Arrangements set forth on Schedule 1.1(28);

(vii)         any Liability with respect to the
insurance policies written by White Mountain Insurance Company and Mountainbran
Limited; and

(viii)        any Liability that the Parties may have
with respect to indemnification or contribution pursuant to this Agreement or
otherwise for claims brought against the Parties by third Persons, which
Liability shall be governed by the provisions of this Article VIII and, if
applicable, the appropriate provisions of the Ancillary Agreements.

In addition, nothing
contained in Section 8.1(a) shall release Tyco from indemnifying
any director, officer or employee of Healthcare and Electronics who was a
director, officer or employee of Tyco or any of its Affiliates on or prior to
the Relevant Time or the Final Separation Date, as the case may be, to the
extent such director, officer or employee is or becomes a named defendant in
any Action with respect to which he or she was entitled to such indemnification
pursuant to then existing obligations.

(c)           Each Party shall not, and shall not
permit any member of its Group to make, any claim or demand, or commence any
Action asserting any claim or demand, including any claim of contribution or
any indemnification, against any other Party or any member of any other Party’s
Group, or any other Person released pursuant to Section 8.1(a),
with respect to any Liabilities released pursuant to Section 8.1(a).

 

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(d)           It is the intent of each Party, by
virtue of the provisions of this Section 8.1, to provide for a full
and complete release and discharge of all Liabilities existing or arising from
all acts and events occurring or failing to occur or alleged to have occurred
or to have failed to occur and all conditions existing or alleged to have
existed on or before the Relevant Time, whether known or unknown, between or
among any Party (and/or a member of such Party’s Group), on the one hand, and
any other Party or Parties (and/or a member of such Party’s or parties’ Group),
on the other hand (including any contractual agreements or arrangements
existing or alleged to exist between or among any such members on or before the
Relevant Time), except as specifically set forth in Sections 8.1(a) and 8.1(b).  At any time, at the reasonable request of any
other Party, each Party shall cause each member of its respective Group and, to
the extent practicable each other Person on whose behalf it released
Liabilities pursuant to this Section 8.1 to execute and deliver
releases reflecting the provisions hereof.

Section 8.2             Indemnification by Tyco.  Except as otherwise specifically set forth in
any provision of this Agreement or of any Ancillary Agreement, following (a)
the Healthcare Distribution Date (with respect to the Healthcare Indemnitees)
and (b) the Electronics Distribution Date (with respect to the Electronics
Indemnitees), Tyco shall and shall cause the other members of the Tyco Group to
indemnify, defend and hold harmless the Healthcare Indemnitees and the Electronics
Indemnitees from and against any and all Indemnifiable Losses of the Healthcare
Indemnitees and the Electronics Indemnitees, respectively, arising out of, by
reason of or otherwise in connection with (i) the Tyco Retained Liabilities or
alleged Tyco Retained Liabilities or (ii) any breach by Tyco of any provision
of this Agreement or any Ancillary Agreement unless such Ancillary Agreement
expressly provides for separate indemnification therein, in which case any such
indemnification claims shall be made thereunder.

Section 8.3             Indemnification by Healthcare.  Except as otherwise specifically set forth in
any provision of this Agreement or of any Ancillary Agreement, Healthcare shall
and shall cause the other members of the Healthcare Group to indemnify, defend
and hold harmless the Tyco Indemnitees and the Electronics Indemnitees from and
against any and all Indemnifiable Losses of the Tyco Indemnitees and the Electronics
Indemnitees, respectively, arising out of, by reason of or otherwise in
connection with (a) the Healthcare Liabilities or alleged Healthcare
Liabilities or (b) any breach by Healthcare of any provision of this Agreement
or any Ancillary Agreement unless such Ancillary Agreement expressly provides
for separate indemnification therein, in which case any such indemnification
claims shall be made thereunder.

Section 8.4             Indemnification by Electronics.  Except as otherwise specifically set forth in
any provision of this Agreement or of any Ancillary Agreement, Electronics shall
and shall cause the other members of the Electronics Group to indemnify, defend
and hold harmless the Tyco Indemnitees and the Healthcare Indemnitees from and
against any and all Indemnifiable Losses of the Tyco Indemnitees and the Healthcare
Indemnitees, respectively, arising out of, by reason of or otherwise in
connection with (a) the Electronics Liabilities or alleged Electronics
Liabilities or (b) any breach by Electronics of any provision of this Agreement
or any Ancillary Agreement unless such Ancillary Agreement expressly provides
for separate indemnification therein, in which case any such indemnification
claims shall be made thereunder.

 

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Section
8.5             Procedures for
Indemnification.

(a)           An Indemnitee shall give the
Indemnifying Party notice of any matter that an Indemnitee has determined has
given or could give rise to a right of indemnification under this Agreement
(other than a Third Party Claim which shall be governed by Section 8.5(b)),
within thirty (30) days of such determination, stating the amount of the
Indemnifiable Loss claimed, if known, and method of computation thereof, and
containing a reference to the provisions of this Agreement in respect of which
such right of indemnification is claimed by such Indemnitee or arises; provided,
however, that the failure to provide such notice shall not release the
Indemnifying Party from any of its obligations except and solely to the extent
the Indemnifying Party shall have been actually prejudiced as a result of such
failure.

(b)           Third Party Claims.  If a claim or demand is made against a Tyco
Indemnitee, a Healthcare Indemnitee or a Electronics Indemnitee (each, an “Indemnitee”)
by any Person who is not a party to this Agreement (a “Third Party Claim”)
as to which such Indemnitee is or may be entitled to indemnification pursuant
to this Agreement, such Indemnitee shall notify the Party (and, if applicable, the
Managing Party) which is or may be required pursuant to this Article VIII
or pursuant to any Ancillary Agreement to make such indemnification (the “Indemnifying
Party”) in writing, and in reasonable detail, of the Third Party Claim
promptly (and in any event within fifteen (15) days) after receipt by such
Indemnitee of written notice of the Third Party Claim.  If any Party shall receive notice or
otherwise learn of the assertion of a Third Party Claim which may reasonably be
determined to be an Assumed Tyco Contingent Liability, such Party, as
appropriate, shall give the Managing Party (as determined pursuant to Article
VII) written notice thereof within fifteen (15) days after such Person
becomes aware of such Third Party Claim; provided, however, that
the failure to provide notice of any such Third Party Claim pursuant to this or
the preceding sentence shall not release the Indemnifying Party from any of its
obligations except and solely to the extent the Indemnifying Party shall have
been actually prejudiced as a result of such failure.  Thereafter, the Indemnitee shall deliver to
the Indemnifying Party (and, if applicable, to the Managing Party), promptly
(and in any event within five (5) Business Days) after the Indemnitee’s receipt
thereof, copies of all notices and documents (including court papers) received
by the Indemnitee relating to the Third Party Claim.

(c)           Other than in the case of an Assumed Tyco
Contingent Liability (the defense of which shall be controlled by the Managing
Party as provided for in Article VII), an Indemnifying Party shall be
entitled (but shall not be required) to assume and control the defense of any
Third Party Claim, at such Indemnifying Party’s own cost and expense and by
such Indemnifying Party’s own counsel, that is reasonably acceptable to the
applicable Indemnitees, if it gives notice of its intention to do so to the
applicable Indemnitees within thirty (30) days of the receipt of such notice
from such Indemnitees.  After notice from
an Indemnifying Party to an Indemnitee of its election to assume the defense of
a Third Party Claim, such Indemnitee shall have the right to employ separate
counsel and to participate in (but not control) the defense, compromise, or
settlement thereof, at its own expense and, in any event, shall cooperate with
the Indemnifying Party in such defense and make available to the Indemnifying
Party, at the Indemnifying

 

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Party’s expense, all
witnesses, pertinent Information, materials and information in such Indemnitee’s
possession or under such Indemnitee’s control relating thereto as are
reasonably required by the Indemnifying Party; provided, however,
that in the event of a conflict of interest between the Indemnifying Party and
the applicable Indemnitee(s), such Indemnitee(s) shall be entitled to retain,
at the Indemnifying Party’s Expense, separate counsel as required by the
applicable rules of professional conduct with respect to such matter; provided,
further, that if (i) the Third Party Claim is not an Assumed Tyco
Contingent Liability and (ii) the Indemnifying Party has elected to assume the
defense of the Third Party Claim but has specified, and continues to assert,
any reservations or exceptions in such notice, then, in any such case, the
reasonable fees and expenses of one separate counsel for all Indemnitees shall
be borne by the Indemnifying Party.

(d)           Other than in the case of an Assumed Tyco
Contingent Liability, if an Indemnifying Party elects not to assume
responsibility for defending a Third Party Claim, or fails to notify an
Indemnitee of its election as provided in Section 8.5(c), such
Indemnitee may defend such Third Party Claim at the cost and expense of the
Indemnifying Party.  If the Indemnitee is
conducting the defense against any such Third Party Claim, the Indemnifying
Party shall cooperate with the Indemnitee in such defense and make available to
the Indemnitee, at the Indemnitee’s expense, all witnesses, pertinent
Information, material and information in such Indemnifying Party’s possession
or under such Indemnifying Party’s control relating thereto as are reasonably
required by the Indemnitee.

(e)           Unless the Indemnifying Party has
failed to assume the defense of the Third Party Claim in accordance with the
terms of this Agreement, no Indemnitee may settle or compromise any Third Party
Claim that is not an Assumed Tyco Contingent Liability (with any Assumed Tyco
Contingent Liability handled in accordance with Article VII) without the
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld or delayed.

(f)            In the case of a Third Party Claim
(except for any Third Party Claim that is an Assumed Tyco Contingent Liability
which, with respect to the subject matter of this Section 8.5(f),
shall be governed by Section 7.4), no Indemnifying Party shall
consent to entry of any judgment or enter into any settlement of the Third
Party Claim without the consent of the Indemnitee if the effect thereof is to
permit any injunction, declaratory judgment, other order or other non-monetary
relief to be entered, directly or indirectly, against any Indemnitee; it being
understood that in the case of a Third Party Claim that is an Assumed Tyco
Contingent Liability, such matters are addressed in Article VII.

(g)           Absent fraud or willful misconduct by
an Indemnifying Party, the indemnification provisions of this Article VIII
shall be the sole and exclusive remedy of an Indemnitee for any monetary or
compensatory damages or losses resulting from any breach of this Agreement and
each Indemnitee expressly waives and relinquishes any and all rights, claims or
remedies such Person may have with respect to the foregoing other than under
this Article VIII against any Indemnifying Party.

 

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Section
8.6             Cooperation In Defense
And Settlement.

(a)           With respect to any Third Party Claim
that is not an Assumed Tyco Contingent Liability and that implicates two or
more Parties in a material fashion due to the allocation of Liabilities,
responsibilities for management of defense and related indemnities pursuant to
this Agreement or any of the Ancillary Agreements, the applicable Parties agree
to use best efforts to cooperate fully and maintain a joint defense (in a
manner that will preserve for both Parties the attorney-client privilege, joint
defense or other privilege with respect thereto).  The Party that is not responsible for
managing the defense of such Third Party Claims shall, upon reasonable request,
be consulted with respect to significant matters relating thereto and may, if
necessary or helpful, retain counsel to assist in the defense of such claims.

(b)           Each of Tyco, Healthcare and Electronics
agrees that at all times from and after the Effective Time, if an Action is
commenced by a third party (or any member of such Party’s respective Group)
with respect to which one or more named Parties (or any member of such Party’s
respective Group) is a nominal defendant and/or such Action is otherwise not a
Liability allocated to such named Party under this Agreement or any Ancillary
Agreement, then the other Party or Parties shall use best efforts to cause such
nominal defendant to be removed from such Action, as soon as reasonably
practicable.

Section 8.7             Indemnification Payments.  Indemnification required by this Article
VIII shall be made by periodic payments of the amount thereof in a timely
fashion during the course of the investigation or defense, as and when bills
are received or an Indemnifiable Loss or Liability incurred.

Section
8.8             Contribution.

(a)           If the indemnification provided for
in Sections 8.2(b)(ii), 8.3(b) and 8.4(b), including in
respect of any Assumed Tyco Contingent Liability, is unavailable to, or
insufficient to hold harmless an Indemnitee under this Agreement or any
Ancillary Agreement in respect of any Liabilities referred to herein or
therein, then each Indemnifying Party shall contribute to the amount paid or
payable by such Indemnitee as a result of such Liabilities in such proportion
as is appropriate to reflect the relative fault of the Indemnifying Party and
the Indemnitee in connection with the actions or omissions that resulted in
Liabilities as well as any other relevant equitable considerations.  With respect to the foregoing, the relative
fault of such Indemnifying Party and Indemnitee shall be determined by
reference to, among other things, whether the misstatement or alleged
misstatement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by such Indemnifying Party or
Indemnified Party, and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.

(b)           The Parties agree that it would not
be just and equitable if contribution pursuant to this Section 8.8
were determined by a pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to in Section 8.8(a).  The amount paid or payable by an Indemnitee
as a result of the

 

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Liabilities referred to
in Section 8.8(a) shall be deemed to include, subject to the
limitations set forth above, any legal or other fees or expenses reasonably
incurred by such Indemnitee in connection with investigating any claim or
defending any Action.  No Person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.

Section 8.9             Indemnification Obligations Net
of Insurance Proceeds and Other Amounts.

(a)           Any Indemnifiable Loss subject to
indemnification or contribution pursuant to this Article VIII including,
for the avoidance of doubt, in respect of any Assumed Tyco Contingent
Liability, will be calculated (i) net of Insurance Proceeds that actually
reduce the amount of the Indemnifiable Loss, (ii) net of any proceeds received
by the Indemnitee from any third party for indemnification for such Liability
that actually reduce the amount of the Indemnifiable Loss (“Third Party
Proceeds”) and (iii) net of any Tax benefits in accordance with, and
subject to, the principles set forth or referred to in the Tax Sharing
Agreement, and increased in accordance with, and subject to, the principles set
forth in the Tax Sharing Agreement.  Accordingly,
the amount which any Indemnifying Party is required to pay pursuant to this
Article VIII to any Indemnitee pursuant to this Article VIII will be
reduced by any Insurance Proceeds or Third Party Proceeds theretofore actually
recovered by or on behalf of the Indemnitee in respect of the related
Indemnifiable Loss.  If an Indemnitee
receives a payment required by this Agreement from an Indemnifying Party in
respect of any Indemnifiable Loss (an “Indemnity Payment”) and
subsequently receives Insurance Proceeds or Third Party Proceeds, then the
Indemnitee will pay to the Indemnifying Party an amount equal to the excess of
the Indemnity Payment received over the amount of the Indemnity Payment that
would have been due if the Insurance Proceeds or Third Party Proceeds had been
received, realized or recovered before the Indemnity Payment was made.

(b)           The Parties acknowledge that the
indemnification and contributions hereof do not relieve any insurer who would
otherwise be obligated to pay any claim to pay such claim.  In furtherance of the foregoing, the Indemnitee
shall use best efforts to seek to collect or recover any third-party Insurance
Proceeds and any Third Party Proceeds (other than Insurance Proceeds under an
arrangement where future premiums are adjusted to reflect prior claims in
excess of prior premiums) to which the Indemnified Party is entitled in
connection with any Indemnifiable Loss for which the Indemnified Party seeks
contribution or indemnification pursuant to this Article VIII; provided,
that the Indemnitee’s inability to collect or recover any such Insurance
Proceeds or Third Party Proceeds shall not limit the Indemnifying Party’s
obligations hereunder.

Section
8.10           Additional Matters;
Survival of Indemnities.

(a)           The indemnity and contribution
agreements contained in this Article VIII shall remain operative and in
full force and effect, regardless of (i) any investigation made by or on behalf
of any Indemnitee; (ii) the knowledge by the Indemnitee of

 

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Indemnifiable Losses for
which it might be entitled to indemnification or contribution hereunder; and
(iii) any termination of this Agreement.

(b)           The rights and obligations of each
Party and their respective Indemnitees under this Article VIII shall
survive the sale or other Transfer by any Party or its respective Subsidiaries
of any Assets or businesses or the assignment by it of any Liabilities.

(c)           Each Party shall, and shall cause the
members of its respective Group to, preserve and keep their Records relating to
financial reporting, internal audit, employee benefits, past acquisition or
disposition transactions, claims, demands, actions, and email files and backup
tapes regarding any of the foregoing as such pertains to any period prior to
the Separation Date in their possession, whether in electronic form or
otherwise, until the latest of, as applicable (i) ten (10) years following the
Separation Date or (ii) the date on which such Records are no longer required
to be retained pursuant to such Party’s applicable record retention policy as
in effect immediately prior to the Separation Date.

ARTICLE IX

CONFIDENTIALITY; ACCESS TO INFORMATION

Section 9.1             Provision of Corporate Records.  Other than in circumstances in which
indemnification is sought pursuant to Article VIII (in which event the
provisions of such Article will govern) and without limiting the applicable
provisions of Article VII, and subject to appropriate restrictions for
classified, privileged or confidential information:

(a)           After the applicable Relevant Time,
upon the prior written request by Healthcare or Electronics for specific and
identified Information which relates to (x) Healthcare or Electronics or the
conduct of the Healthcare Business or Electronics Business, as the case may be,
up to the applicable Distribution Date, or (y) any Ancillary Agreement to which
Tyco and one or more of Healthcare and/or Electronics are parties, as
applicable, Tyco shall provide, as soon as reasonably practicable following the
receipt of such request, appropriate copies of such Information (or the
originals thereof if the Party making the request has a reasonable need for
such originals) in the possession or control of Tyco or any of its Affiliates
or Subsidiaries, but only to the extent such items so relate and are not
already in the possession or control of the requesting Party.

(b)           After the Healthcare Distribution
Date, upon the prior written request by Tyco or Electronics for specific and
identified Information which relates to (x) Tyco or Electronics or the conduct
of the Tyco Retained Business or Electronics Business, as the case may be, up
to the Healthcare Distribution Date, or (y) any Ancillary Agreement to which Healthcare
and one or more of Tyco and/or Electronics are parties, as applicable, Healthcare
shall provide, as soon as reasonably practicable following the receipt of such
request, appropriate copies of such Information (or the originals thereof if
the Party making the request has a reasonable need for such originals) in the
possession or control of Healthcare or any of its Subsidiaries, but only to the
extent such items so relate and are not already in the possession or control of
the requesting Party.

 

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(c)           After the Electronics Distribution
Date, upon the prior written request by Tyco or Healthcare for specific and
identified Information which relates to (x) Tyco or Healthcare or the conduct
of the Tyco Retained Business or Healthcare Business, as the case may be, up to
the Electronics Distribution Date, or (y) any Ancillary Agreement to which Electronics
and one or more of Tyco and/or Healthcare are parties, as applicable, Electronics
shall provide, as soon as reasonably practicable following the receipt of such
request, appropriate copies of such Information (or the originals thereof if
the Party making the request has a reasonable need for such originals) in the
possession or control of Electronics or any of its Subsidiaries, but only to
the extent such items so relate and are not already in the possession or
control of the requesting Party.

Section 9.2             Access to Information.  Other than in circumstances in which
indemnification is sought pursuant to Article VIII (in which event the
provisions of such Article will govern) and without limiting the applicable
provisions of Article VII, from and after the applicable Relevant Time,
each of Tyco, Healthcare and Electronics shall afford to the other and its
authorized accountants, counsel and other designated representatives reasonable
access during normal business hours, subject to appropriate restrictions for
classified, privileged or confidential information, to the personnel,
properties, and Information of such Party and its Subsidiaries insofar as such
access is reasonably required by the other Party and relates to (x) such other
Party or the conduct of its business prior to the Relevant Time or (y) any
Ancillary Agreement to which each of the Party requesting such access and the
Party requested to grant such access are Parties.  Nothing in this Section 9.2 shall
require any Party to violate any agreement with any third party regarding the
confidentiality of confidential and proprietary information relating to that
third party or its business; provided, however, that in the event
that a Party is required to disclose any such information, such Party shall use
best efforts to seek to obtain such third party Consent to the disclosure of
such information.

Section 9.3             Witness Services.  At all times from and after the Relevant
Time, each of Tyco, Healthcare and Electronics shall use its best efforts to
make available to the others, upon reasonable written request, its and its
Subsidiaries’ officers, directors, employees and agents as witnesses to the
extent that (i) such Persons may reasonably be required to testify in
connection with the prosecution or defense of any Action in which the
requesting Party may from time to time be involved (except for claims, demands
or Actions between members of each Group) and (ii) there is no conflict in the
Action between the requesting Party and Tyco, Healthcare and Electronics, as
applicable.  A Party providing a witness
to the other Party under this Section shall be entitled to receive from
the recipient of such services, upon the presentation of invoices therefor,
payments for such amounts, relating to disbursements and other out-of-pocket
expenses (which shall not include the costs of salaries and benefits of
employees who are witnesses or any pro rata portion of overhead or other costs
of employing such employees which would have been incurred by such employees’
employer regardless of the employees’ service as witnesses), as may be
reasonably incurred and properly paid under applicable Law.

Section 9.4             Reimbursement; Other Matters.  Except to the extent otherwise contemplated
by this Agreement (including Section 7.3) or any Ancillary
Agreement a Party providing Information or access to Information to the other
Party under this Article IX shall be entitled to receive from the
recipient, upon the presentation of invoices therefor, payments for

 

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such amounts, relating to supplies, disbursements and
other out-of-pocket expenses, as may be reasonably incurred in providing such
Information or access to such Information.

Section
9.5             Confidentiality.

(a)           Notwithstanding any termination of
this Agreement, for a period of five (5) years from the Effective Time the
Parties shall hold, and shall cause each of their respective Subsidiaries to
hold, and shall each cause their respective officers, employees, agents,
consultants and advisors to hold, in strict confidence, and not to disclose or
release or use, without the prior written consent of the other Party (which may
be withheld in such Party’s sole and absolute discretion, except where
disclosure is required by applicable Law), any and all Confidential Information
(as defined herein) concerning any other Party; provided, that the
Parties may disclose, or may permit disclosure of, Confidential Information (i)
to their respective auditors, attorneys, financial advisors, bankers and other
appropriate consultants and advisors who have a need to know such information
and are informed of their obligation to hold such information confidential to
the same extent as is applicable to the Parties and in respect of whose failure
to comply with such obligations, the applicable Party will be responsible, (ii)
if the Parties or any of their respective Subsidiaries are required or
compelled to disclose any such Confidential Information by judicial or
administrative process or by other requirements of Law or stock exchange rule,
(iii) as required in connection with any legal or other proceeding by one Party
against any other Party, or (iv) as necessary in order to permit a Party to
prepare and disclose its financial statements, Tax Returns or other required
disclosures.  Notwithstanding the
foregoing, in the event that any demand or request for disclosure of
Confidential Information is made pursuant to clause (ii) above, each Party, as
applicable, shall promptly notify the other of the existence of such request or
demand and shall provide the other a reasonable opportunity to seek an
appropriate protective order or other remedy, which such Parties will cooperate
in obtaining.  In the event that such
appropriate protective order or other remedy is not obtained, the Party whose
Confidential Information is required to be disclosed shall or shall cause the
other applicable Party or Parties to furnish, or cause to be furnished, only
that portion of the Confidential Information that is legally required to be
disclosed and shall take commercially reasonable steps to ensure that
confidential treatment is accorded such information.

(b)           Notwithstanding anything to the
contrary set forth herein, (i) the Parties shall be deemed to have satisfied
their obligations hereunder with respect to Confidential Information if they
exercise the same degree of care (but no less than a reasonable degree of care)
as they take to preserve confidentiality for their own similar information and
(ii) confidentiality obligations provided for in any agreement between each
Party or its Subsidiaries and their respective employees shall remain in full
force and effect.  Notwithstanding
anything to the contrary set forth herein, Confidential Information of any
Party in the possession of and used by any other Party as of the Relevant Time
may continue to be used by such Party in possession of the Confidential
Information in and only in the operation of the Healthcare Business, the Electronics
Business or the Tyco Retained Business, as the case may be; provided,
that such use is not competitive in nature, and may be used only so long as the
Confidential Information is maintained in

 

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confidence and not
disclosed in violation of Section 9.5(a).  Such continued right to use may not be
transferred (directly or indirectly) to any third party without the prior
written consent of the applicable Party, except pursuant to Section 12.9.

(c)           Each of the Parties acknowledges that
it and the other members of their respective Groups may have in their
possession confidential or proprietary information of third parties that was
received under confidentiality or non-disclosure agreements with such third
party while part of the Tyco Group.  Each
of the Parties will hold, and will cause the other members of their respective
Groups and their respective representatives to hold, in strict confidence the
confidential and proprietary information of third parties to which they or any
other member of their respective Groups has access, in accordance with the
terms of any agreements entered into prior to the Relevant Time between one or
more members of the Tyco Group (whether acting through, on behalf of, or in connection
with, the separated Businesses) and such third parties.

Section
9.6             Privileged Matters.

(a)           Pre-Separation Services.  The Parties recognize that legal and other
professional services that have been and will be provided prior to the Relevant
Time have been and will be rendered for the collective benefit of each of the
members of the Tyco Group, the Healthcare Group and the Electronics Group, and
that each of the members of the Tyco Group, the Healthcare Group and the Electronics
Group should be deemed to be the client with respect to such pre-separation
services for the purposes of asserting all privileges which may be asserted
under applicable Law.

(b)           Post-Separation Services.  The Parties recognize that legal and other
professional services will be provided following the Relevant Time which will
be rendered solely for the benefit of Tyco, Healthcare or Electronics, as the
case may be.  With respect to such
post-separation services, the Parties agrees as follows:

(i)            Tyco shall be entitled, in perpetuity,
to control the assertion or waiver of all privileges in connection with
privileged information which relates solely to the Tyco Retained Business,
whether or not the privileged information is in the possession of or under the
control of Tyco, Healthcare or Electronics. 
Tyco shall also be entitled, in perpetuity, to control the assertion or
waiver of all privileges in connection with privileged information that relates
solely to the subject matter of any claims constituting Tyco Retained Liabilities,
now pending or which may be asserted in the future, in any lawsuits or other
proceedings initiated against or by Tyco, whether or not the privileged
information is in the possession of or under the control of Tyco, Healthcare or
Electronics;

(ii)           Healthcare shall be entitled, in
perpetuity, to control the assertion or waiver of all privileges in connection
with privileged information which relates solely to the Healthcare Business,
whether or not the privileged information is in the possession of or under the
control of Tyco, Healthcare or Electronics. 
Healthcare shall also be entitled, in perpetuity, to control the
assertion or waiver of all privileges in connection with privileged information
that relates solely to the

 

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subject matter of any
claims constituting Healthcare Liabilities, now pending or which may be
asserted in the future, in any lawsuits or other proceedings initiated against
or by Healthcare, whether or not the privileged information is in the
possession of or under the control of Tyco, Healthcare or Electronics;

(iii)          Electronics shall be entitled, in
perpetuity, to control the assertion or waiver of all privileges in connection
with privileged information which relates solely to the Electronics Business,
whether or not the privileged information is in the possession of or under the
control of Tyco, Healthcare or Electronics. 
Electronics shall also be entitled, in perpetuity, to control the
assertion or waiver of all privileges in connection with privileged information
that relates solely to the subject matter of any claims constituting Electronics
Liabilities, now pending or which may be asserted in the future, in any
lawsuits or other proceedings initiated against or by Electronics, whether or
not the privileged information is in the possession of or under the control of Tyco,
Healthcare or Electronics.

(c)           The Parties agree that they shall
have a shared privilege, with equal right to assert or waive, subject to the
restrictions in this Section 9.6, with respect to all privileges
not allocated pursuant to the terms of Sections 9.6(b).  All privileges relating to any claims,
proceedings, litigation, disputes, or other matters which involve two or more
of Tyco, Healthcare or Electronics in respect of which two or more of such
Parties retain any responsibility or Liability under this Agreement, shall be
subject to a shared privilege among them.

(d)           No Party may waive any privilege
which could be asserted under any applicable Law, and in which any other Party
has a shared privilege, without the consent of the other Party, which shall not
be unreasonably withheld or delayed or as provided in subsections (e) or (f)
below.  Consent shall be in writing, or
shall be deemed to be granted unless written objection is made within twenty
(20) days after notice upon the other Party requesting such consent.

(e)           In the event of any litigation or
dispute between or among any of the Parties, or any members of their respective
Groups, either such Party may waive a privilege in which the other Party or
member of such Group has a shared privilege, without obtaining the consent of
the other Party; provided, that such waiver of a shared privilege shall
be effective only as to the use of information with respect to the litigation
or dispute between the relevant Parties and/or the applicable members of their
respective Groups, and shall not operate as a waiver of the shared privilege
with respect to third parties.

(f)            If a dispute arises between or among
the Parties or their respective Subsidiaries regarding whether a privilege
should be waived to protect or advance the interest of any Party, each Party
agrees that it shall negotiate in good faith, shall endeavor to minimize any
prejudice to the rights of the other Parties, and shall not unreasonably
withhold consent to any request for waiver by another Party.  Each Party specifically agrees that it will
not withhold consent to waiver for any purpose except to protect its own
legitimate interests.

 

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(g)           Upon receipt by any Party or by any
Subsidiary thereof of any subpoena, discovery or other request which arguably
calls for the production or disclosure of information subject to a shared
privilege or as to which another Party has the sole right hereunder to assert a
privilege, or if any Party obtains knowledge that any of its or any of its
Subsidiaries’ current or former directors, officers, agents or employees have
received any subpoena, discovery or other requests which arguably calls for the
production or disclosure of such privileged information, such Party shall
promptly notify the other Party or Parties of the existence of the request and
shall provide the other Party or Parties a reasonable opportunity to review the
information and to assert any rights it or they may have under this Section 9.6
or otherwise to prevent the production or disclosure of such privileged
information.

(h)           The transfer of all Information
pursuant to this Agreement is made in reliance on the agreement of Tyco, Healthcare
or Electronics as set forth in Sections 9.5 and 9.6, to maintain
the confidentiality of privileged information and to assert and maintain all
applicable privileges.  The access to
information being granted pursuant to Sections 7.3, 8.6, 9.1
and 9.2 hereof, the agreement to provide witnesses and individuals
pursuant to Sections 7.3, 8.6 and 9.3 hereof, the
furnishing of notices and documents and other cooperative efforts contemplated
by Sections 7.5 and 8.6 hereof, and the transfer of privileged
information between and among the Parties and their respective Subsidiaries
pursuant to this Agreement shall not be deemed a waiver of any privilege that
has been or may be asserted under this Agreement or otherwise.

Section 9.7             Ownership of Information.  Any information owned by one Party or any of
its Subsidiaries that is provided to a requesting Party pursuant to this Article
IX shall be deemed to remain the property of the providing Party.  Unless specifically set forth herein, nothing
contained in this Agreement shall be construed as granting or conferring rights
of license or otherwise in any such information.

Section 9.8             Other Agreements.  The rights and obligations granted under this
Article IX are subject to any specific limitations, qualifications or
additional provisions on the sharing, exchange or confidential treatment of
information set forth in any Ancillary Agreement.

ARTICLE X

DISPUTE RESOLUTION

Section 10.1           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 (but excluding any controversy, dispute or claim arising out of
any Contract relating to the use or lease of real property if any third party
is a necessary party to such controversy, dispute or claim) (collectively, “Agreement
Disputes”), the general counsels of the relevant Parties and/or such other
executive officer designated by the relevant Party shall negotiate for a
reasonable period of time to settle such Agreement Dispute; provided,
that such reasonable period shall not, unless otherwise agreed by the relevant
Parties in writing, exceed forty-five (45)

 

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days from the time of receipt by a Party of written
notice of such Agreement Dispute (“Dispute Notice”); provided, further,
that in the event of any arbitration in accordance with Section 10.3 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 Agreement Dispute relates
occurring after the Dispute Notice is received shall not be deemed to have
passed until such Agreement Dispute has been resolved.

Section 10.2           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 Agreement Dispute, the Parties agree to submit the Agreement
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 10.3           Arbitration.  Subject to Section 10.9, if the
Agreement Dispute has not been resolved for any reason after the Mediation
Period, such Agreement Dispute shall be determined, at the request of any
relevant Party, by arbitration conducted in New York City, before and 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 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 10.3 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 an
Agreement Dispute is an arbitrable Agreement Dispute, whether arbitration has
been waived, whether an assignee of this Agreement is bound to arbitrate, or as
to the interpretation of enforceability of this Article X shall be
determined by the arbitrators.  In
resolving any Agreement Dispute, the Parties intend that the arbitrators shall
apply 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 (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, including monetary
damages in accordance with Section 10.4, 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

 

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with indemnification for a Third Party Claim (and in
such a case, only to the extent awarded in such Third Party Claim).

Section 10.4           Arbitration with Respect to
Monetary Damages.  Subject to Section
10.9, in the event the Agreement Dispute involves (a) valuation of a
liability under (i) this Agreement, (ii) any Ancillary Agreement or (iii) any
other agreement entered into by the parties pursuant to this Agreement or any
Ancillary Agreement, (b) an amount in controversy in an Agreement 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 10.5           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 Agreement Dispute.

Section 10.6           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 their applicable Group to keep,
confidential all matters relating to and any negotiation, mediation,
conference, arbitration, discussion or arbitration award pursuant to this Article
X shall be treated as compromise and settlement negotiations for purposes
of Rule 408 of the Federal Rules of Evidence and comparable state rules; provided,
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 Agreement
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 10.7           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 X with
respect to all matters not subject to such dispute resolution.

 

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Section 10.8           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 Agreement
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 10.9           Exception to Arbitration.  Notwithstanding anything in this Article X
to the contrary, in the event that the matters described on Schedule 10.9
have been fully and finally completed, including the exhaustion of all appeals,
if the Agreement Dispute has not been resolved for any reason after the
Mediation Period, such Agreement Dispute may be subject to litigation in
accordance with Sections 12.19 and 12.21.

ARTICLE XI

INSURANCE

Section
11.1           Policies and Rights
Included Within Assets.

(a)           The Healthcare Assets shall include
(i) any and all rights of an insured Party under each of the Healthcare Shared
Policies, subject to the terms of such Healthcare Shared Policies and any
limitations or obligations of Healthcare contemplated by this Article XI,
specifically including rights of indemnity and the right to be defended by or
at the expense of the insurer, with respect to all actual or alleged wrongful
acts, occurrences, events, claims, suits, actions, proceedings, injuries,
losses, liabilities, damages and expenses which occurred or are alleged to have
occurred, in whole or in part, or were incurred or claimed to have been
incurred prior to the Healthcare Distribution Date by any Party in or in
connection with the conduct of the Healthcare Business, regardless of whether
any suit, claim, action or proceeding is brought before or after the Healthcare
Distribution Date or, to the extent any claim is made against Healthcare or any
of its Subsidiaries, the conduct of the Tyco Retained Business or the Electronics
Business prior to the Healthcare Distribution Date, and which actual or alleged
wrongful acts, occurrences, events, claims, suits, actions, proceedings,
injuries, losses, liabilities, damages and expenses may arise out of an insured
or insurable occurrence or wrongful act under one or more of such Healthcare
Shared Policies; provided, however, that nothing in this clause
shall be deemed to constitute (or to reflect) an assignment of such Healthcare
Shared Policies, or any of them, to Healthcare, and (ii) the Healthcare
Policies.  With regard to the Healthcare
Assets as respects products liability, nothing in this Agreement is intend to
provide coverage for alleged wrongful acts, occurrences, events, claims, suits,
actions, proceedings, injuries, losses, liabilities, damages and expenses which
occurred or are alleged to have occurred, in whole or in part, prior to the
Healthcare Distribution Date and are covered under a Claims Made Policy Form,
that were not reported to Tyco prior to the Healthcare Distribution Date.

(b)           The Electronics Assets shall include
(i) any and all rights of an insured Party under each of the Electronics Shared
Policies, subject to the terms of such Electronics Shared Policies and any
limitations or obligations of Electronics

 

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contemplated by this Article
XI, specifically including rights of indemnity and the right to be defended
by or at the expense of the insurer, with respect to all actual or alleged
wrongful acts, occurrences, events, claims, suits, actions, proceedings,
injuries, losses, liabilities, damages and expenses which occurred or are
alleged to have occurred, in whole or in part, prior to the Electronics
Distribution Date by any Party in or in connection with the conduct of the Electronics
Business, regardless of whether any suit, claim, action or proceeding is
brought before or after the Electronics Distribution Date or, to the extent any
claim is made against Electronics or any of its Subsidiaries, the conduct of
the Tyco Retained Business or the Healthcare Business, and which actual or alleged
wrongful acts, occurrences, events, claims, suits, actions, proceedings,
injuries, losses, liabilities, damages and expenses may arise out of an insured
or insurable occurrence or wrongful act under one or more of such Electronics
Shared Policies; provided, however, that nothing in this clause
shall be deemed to constitute (or to reflect) an assignment of such Electronics
Shared Policies, or any of them, to Electronics, and (ii) the Electronics
Policies.

Section 11.2           Claims Made Tail Policies.  The claims made tail policies provided for in
this Section 11.2 will solely provide coverage for any Claim arising
from any Wrongful Act occurring, in whole or in part, prior to the Final
Separation Date.  For purposes of this Section
11.2, “Claim” and “Wrongful Act” shall have the respective meanings given
to such terms in the current Tyco International Ltd., D&O, Fiduciary and
Employment Practices Liability Insurance Policies, as applicable.

(a)           Subject to prevailing market
conditions and underwriting, Tyco shall purchase Directors and Officers
Liability Insurance Policies having total limits of $250 million, consisting of
$250 million of non- rescindable Side A coverage and $200 million of Side B
coverage and having a policy period incepting on the Final Separation Date, or
the expiration date of the current Tyco Directors and Officers liability
insurance Policies, whichever date is earlier, and ending on a date that is six
years after the Final Separation Date (“D&O Tail Policies”).  The premium for the D&O Tail Policies shall
be pre-paid for the full six-year term of the D&O Tail Policies.  Such D&O Tail Policies shall cover Tyco, Healthcare
and Electronics and the insured persons thereof and shall have material terms
and conditions no less favorable than those contained in the Policies
comprising the Tyco Directors and Officers liability insurance program
incepting on March 15, 2006, except for the policy period, premium and
provisions excluding coverage for wrongful acts, errors or omissions, post-dating
the Final Separation Date.  Tyco (i) shall
provide Healthcare and Electronics with copies of the D&O Tail Policies
within a reasonable time after the Policies are issued and (ii) shall not amend
the terms or, nor cancel or permit cancellation of, any such Policies without
ninety (90) days prior written notice to Healthcare and Electronics.

(b)           Subject to prevailing market
conditions and underwriting, Tyco shall purchase Fiduciary Liability Insurance
Policies having total limits of $100 million and having a policy period incepting
on the Final Separation Date, or the expiration date of the current Tyco
fiduciary liability insurance Policies, whichever date is earlier, and ending
on a date that is six years after the Final Separation Date (“Fiduciary Tail
Policies”).  The premium for the
Fiduciary Tail Policies shall be pre-paid for the full six-

 

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year term of the
Fiduciary Tail Policies.  Such Fiduciary
Tail Policies shall cover Tyco, Healthcare and Electronics and the insured
persons thereof and shall have material terms and conditions no less favorable
than those contained in the Policies comprising the Tyco fiduciary liability
insurance program incepting on July 15, 2006, except for the policy period,
premium and provisions excluding coverage for wrongful acts, errors and
omissions, post-dating the Final Separation Date.  Tyco (i) shall provide Healthcare and Electronics
with copies of the Fiduciary Tail Policies within a reasonable time after the
Policies are issued and (ii) shall not amend the terms or, nor cancel or permit
cancellation of, any such Policies without ninety (90) days prior written
notice to Healthcare and Electronics.

(c)           Subject to prevailing market
conditions and underwriting, Tyco shall purchase Employment Practices Liability
Insurance Policies having total limits of $50 million of coverage and having a
policy period incepting on the Final Separation Date, or the expiration date of
the current Tyco Employment Practice liability insurance Policies, whichever
date is earlier, and ending on a date that is six years after the Final
Separation Date (“EPL Tail Policies”). 
The premium for the EPL Tail Policies shall be pre-paid for the full
six-year term of the EPL Tail Policies.  Such
EPL Tail Policies shall cover Tyco, Healthcare and Electronics and the insured
persons thereof and shall have material terms and conditions no less favorable
than those contained in the Policies comprising the Tyco Employment Practices liability
insurance program incepting on November 30, 2006, except for the policy period,
premium and provisions excluding coverage for wrongful acts, errors and
omissions, post-dating the Final Separation Date.  Tyco (i) shall provide Healthcare and Electronics
with copies of the EPL Tail Policies within a reasonable time after the
Policies are issued and (ii) shall not amend the terms or, nor cancel or permit
cancellation of, any such Policies without ninety (90) days prior written
notice to Healthcare and Electronics.

(d)           Subject to prevailing market
conditions and underwriting, to the extent that Tyco is unable prior to the
Final Separation Date to obtain any of the policies as provided for in
paragraphs (a), (b) and (c) of this Section 11.2, then, with
respect to suits or claims based on wrongful acts, errors or omissions on or
before the Final Separation Date, Tyco shall use best efforts to secure
alternative insurance arrangements on the applicable standalone insurance
policies for Healthcare and Electronics to provide benefits on terms and conditions
(including policy limits) in favor of Healthcare, Electronics and the insured
persons thereof no less favorable than the benefits (including policy limits)
that were to be afforded by the policies described in paragraphs (a), (b) and
(c) of this Section 11.2.  With
respect to such alternative insurance arrangements, Tyco, Healthcare and Electronics
shall be responsible for their own costs under their applicable standalone
insurance policies.  Tyco shall not under
any circumstances purchase any such alternative coverage containing an
exclusion for suits or claims based on wrongful acts, errors or omissions up to
and including the Final Separation Date to the extent such exclusion would
preclude coverage for Healthcare and Electronics and/or the insured persons
thereof, but would not preclude coverage for Tyco and/or the insured persons
thereof.

 

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Section
11.3           Occurrence Based
Policies.

(a)           With respect to the Tyco Shared
Policies of workers’ compensation, automobile liability and general liability
insurance, for suits or claims that are filed or made either before or after
the Final Separation Date, with respect to occurrences which took place, in
whole or in part, prior to the respective Distribution Dates and for which
White Mountain Insurance Company funds claim payments and claim adjustment
expenses, Healthcare and Electronics shall collectively pay White Mountain
Insurance Company a one-time separation payment representing their proportional
share of Unallocated claim Adjustment Expense equal to 8% of the Ultimate
Retained Loss & ALAE estimated at Distribution Date(s).  Reimbursement by Tyco Healthcare and
Electronics will be due upon demand by White Mountain Insurance Company.
Notwithstanding the foregoing, the terms of that certain Agreement by and
between Tyco, Healthcare and Electronics, on the one hand, and White Mountain
Insurance Company and Mountainbran Ltd., on the other, dated ________ 2007,
which describes, among other things, (i) how claims and suits under the Tyco
Shared Policies will be administered, paid, accounted for, and the level of
input each Party will have in claim settlements, (ii) access to Shared Policies
claim data, (iii) access to Tyco Shared Policies Limit Aggregate Erosion
reports, (iv) Large Loss Notification to each Party, (v) dispute resolution and
(vi) Umbrella and Excess claims handling, are incorporated hereby by reference.

(b)           With respect to all other occurrence
based Tyco Shared Occurrence Policies, for suits or claims that are filed or
made based upon occurrences that occurred or are alleged to have occurred in
whole or in part prior to the respective Distribution Dates, Tyco Healthcare
and Electronics, shall be responsible for bearing the full amount of the deductible
and/or any claims, costs and expenses that are not covered under such insurance
policies including that portion of any premium adjustments, tax, assessment or
similar regulatory surcharges, that relates to claims based on occurrences that
predate the respective Distribution Dates.

Section
11.4           Administration; Other
Matters.

(a)           Administration.  Except as otherwise provided in Section 11.3
hereof, from and after the Effective Time, Tyco shall be responsible for (i)
Insurance Administration of the Shared Policies and (ii) Claims Administration
under such Shared Policies with respect to Assumed Tyco Contingent Liabilities,
Tyco Retained Liabilities, Healthcare Liabilities and Electronics Liabilities; provided,
that the retention of such responsibilities by Tyco is in no way intended to
limit, inhibit or preclude any right to insurance coverage for any Insured
Claim of a named insured under such Policies as contemplated by the terms of
this Agreement and; provided, further, that Tyco’s retention of
the administrative responsibilities for the Shared Policies shall not relieve
the Party submitting any Insured Claim of the primary responsibility for
reporting such Insured Claim accurately, completely and in a timely manner or
of such Party’s authority to settle any such Insured Claim within any period or
amount permitted or required by the relevant Policy.  Tyco may discharge its administrative
responsibilities under this Section 11.4 by contracting for the
provision of services by independent parties. 
Each of

 

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the applicable Parties
shall pay any costs relating to defending its respective Insured Claims under
Shared Policies to the extent such costs including defense, out-of-pocket
expenses, and direct and indirect costs of employees or agents of Tyco related
to Claims Administration and Insurance Administration are not covered under
such Policies.  Each of the Parties shall
be responsible for obtaining or reviewing the appropriateness of releases upon
settlement of its respective Insured Claims under Shared Policies.

(b)           Exceeding Policy Limits.  Where Healthcare Liabilities and/or Electronics
Liabilities, as applicable, are specifically covered under the same Shared
Policy for occurrences, acts or events prior to the earlier of the Healthcare
Distribution Date or the Electronics Distribution Date, regardless of whether
the suit or claim is filed or made after the earlier of the Healthcare Distribution
Date or the Electronics Distribution Date, then Healthcare and Electronics, or
both, as the case may be, may claim coverage for Insured Claims under such
Shared Policy as and to the extent that such insurance is available up to the
full extent of the applicable limits of liability of such Shared Policy (and
may receive any Insurance Proceeds with respect thereto as contemplated by Section 11.2,
Section 11.3 or Section 11.4(c) hereof), subject to the
terms of this Section 11.4.  Except
as set forth in this Section 11.4, Tyco, Healthcare and Electronics
shall not be liable to one another for claims not reimbursed by insurers for
any reason not within the control of Tyco, Healthcare or Electronics, as the
case may be, including coinsurance provisions, deductibles, quota share
deductibles, self-insured retentions, bankruptcy or insolvency of an insurance
carrier, Shared Policy limitations or restrictions, any coverage disputes, any
failure to timely claim by Tyco, Healthcare or Electronics or any defect in
such claim or its processing.  It is
expressly understood that the foregoing shall not limit any Party’s liability
to any other Party for indemnification pursuant to Article VIII.

(c)           Allocation of Insurance Proceeds.  Except as otherwise provided in Section 11.3,
Insurance Proceeds received with respect to suits, occurrences, claims, costs
and expenses covered under the Shared Policies shall be paid to Tyco with
respect to Tyco Retained Liabilities, to Healthcare with respect to Healthcare
Liabilities, and to Electronics with respect to Electronics Liabilities.  In the event that the aggregate limits on any
Shared Policies are exhausted by the payment of Insured Claims by the relevant
Parties, such Parties agree to allocate the Insurance Proceeds received
thereunder based upon their respective percentage of the total insured claim or
claims which were covered under such Shared Policy (their “allocable portion
of Insurance Proceeds”), and any Party who has received Insurance Proceeds
in excess of such Party’s allocable portion of Insurance Proceeds shall pay to
the other Party or Parties the appropriate amount so that each Party will have
received its allocable portion of Insurance Proceeds.  Each of the Parties agrees to use best
efforts to maximize available coverage under those Shared Policies applicable
to it for the benefit of all Parties, and to take all commercially reasonable
steps to recover from all other responsible parties (except the Parties) in
respect of an Insured Claim to the extent coverage limits under a Shared Policy
have been exceeded or would be exceeded as a result of such Insured Claim.

(d)           Allocation of Aggregate
Deductibles.  In the event that two
or more Parties have insured claims under any Shared Policy for which an
aggregate deductible is

 

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payable, the Parties
agree that the aggregate amount of the total deductible paid shall be borne by
the Parties in the same proportion which the Insurance Proceeds received by
each such Party bears to the total Insurance Proceeds received under the applicable
Shared Policy (their “allocable share of the deductible”), and any Party
who has paid more than its allocable share of the deductible shall be entitled
to receive from any other Party or Parties an appropriate amount such that each
Party will only have to bear its allocable share of the deductible.

Section 11.5           Agreement for Waiver of Conflict
and Shared Defense.  In the event
that Insured Claims of more than one of the Parties exist relating to the same
occurrence, the relevant Parties shall jointly defend and waive any conflict of
interest necessary to the conduct of the joint defense.  Nothing in this Article XI shall be
construed to limit or otherwise alter in any way the obligations of the Parties
to this Agreement, including those created by this Agreement, by operation of
Law or otherwise.

Section 11.6           Cooperation.  The Parties agree to use their best efforts
to cooperate with respect to the various insurance matters contemplated by this
Agreement.

Section 11.7           Certain Matters Relating to Tyco’s
Organizational Documents.  For a
period of six (6) years from the Final Separation Date, the Amended and
Restated Certificate of Incorporation and Amended and Restated Bye-laws of Tyco
shall contain provisions no less favorable with respect to indemnification than
are set forth in the Amended and Restated Certificate of Incorporation and
Amended and Restated Bye-laws of Tyco immediately after the Effective Time,
which provisions shall not be amended, repealed or otherwise modified for a
period of six (6) years from the Final Separation Date in any manner that would
affect adversely the rights thereunder of individuals who, at or prior to the
Relevant Time, were directors, officers, employees, fiduciaries or agents of
any member of the Tyco Group or the Healthcare Group, the Electronics Group,
unless such modification shall be required by Law and then only to the minimum
extent required by Law.

ARTICLE XII

MISCELLANEOUS

Section 12.1           Complete Agreement; Construction.  This Agreement, including the Exhibits and Schedules,
and the Ancillary Agreements shall constitute the entire agreement between the
Parties with respect to the subject matter hereof and shall supersede all
previous negotiations, commitments, course of dealings and writings with
respect to such subject matter.  In the
event of any inconsistency between this Agreement and any Schedule hereto, the
Schedule shall prevail.  In the event and
to the extent that there shall be a conflict between the provisions of this
Agreement and the provisions of any Ancillary Agreement or Continuing
Arrangement, such Ancillary Agreement or Continuing Arrangement shall control; provided,
that with respect to any Conveyancing and Assumption Instrument, this Agreement
shall control unless specifically stated otherwise in such Conveyancing and
Assumption Instrument.  Except as
expressly set forth in this Agreement or any Ancillary Agreement:  (a) all matters relating to Taxes and Tax
Returns of the Parties and their respective Subsidiaries shall be governed
exclusively by the Tax Sharing Agreement; and (b) for the avoidance of doubt,
in the event of

 

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any conflict between this Agreement or any Ancillary
Agreement, on the one hand, and the Tax Sharing Agreement, on the other hand,
with respect to such matters, the terms and conditions of the Tax Sharing
Agreement shall govern.

Section 12.2           Ancillary Agreements.  This Agreement is not intended to address,
and should not be interpreted to address, the matters specifically and expressly
covered by the Ancillary Agreements.

Section 12.3           Counterparts.  This Agreement may be executed in more than
one 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 and delivered to the other Parties.

Section 12.4           Survival of Agreements.  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 Effective Time and remain in full force and effect in accordance with their
applicable terms.

Section 12.5           Expenses.  Except as otherwise provided (i) in this
Agreement (including with respect to Specified Shared Expenses, responsibility
for which is allocated pursuant to Section 5.5, or (ii) in any Ancillary
Agreement, the Parties agree that all out-of-pocket fees and expenses incurred,
or to be incurred and directly related to the Plan of Separation and
transactions contemplated hereby (including third party professional fees, fees
and expenses incurred in connection with the execution and delivery of this
Agreement, such other third party fees and expenses incurred on a non-recurring
basis directly as result of the Plan of Separation and such expenses set forth
on Schedule 12.5) (collectively, “Separation Expenses”) shall (A)
to the extent incurred and payable prior to the Final Separation Date be paid
by Tyco and (B) to the extent any such Separation Expenses arise and are
payable by any Party following the Final Separation Date be paid by such Party.  Notwithstanding the foregoing, each Party
shall be responsible for its own internal fees (and reimburse any other Party
to the extent such Party has paid such costs and expenses on behalf of the
responsible Party), costs and expenses (e.g., salaries of personnel working in
its respective Business) incurred in connection with the Plan of Separation,
any costs and expenses relating to such Party’s (or any member of its Group’s)
Disclosure Documents in connection with the Plan of Separation (including,
printing, mailing and filing fees) or any costs and expenses incurred with the
listing of such Party’s common stock on the NYSE in connection with any Distribution.

Section 12.6           Notices.  All notices, requests, claims, demands and
other communications under this Agreement and, to the extent applicable and
unless otherwise provided therein, under each of the Ancillary Agreements 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 12.6):

 

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  To Tyco:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Prior
  to the Final Separation Date:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Tyco
  International Ltd.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attn:

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile:
  (

  	
   

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Prior
  to and following the Final Separation Date:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Tyco
  International Ltd.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attn:

  	
   

  
	
   

  	
   

  	
  Facsimile:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  To Healthcare:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Covidien
  Ltd.

  	
   

  
	
   

  	
   

  	
  15
  Hampshire Street

  	
   

  
	
   

  	
   

  	
  Mansfield,
  Massachusetts 02048

  	
   

  
	
   

  	
   

  	
  Attn:
  General Counsel

  	
   

  
	
   

  	
   

  	
  Facsimile:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  To Electronics:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Tyco
  Electronics Ltd.

  	
   

  
	
   

  	
   

  	
  1050
  Westlakes Drive

  	
   

  
	
   

  	
   

  	
  Berwyn,
  Pennsylvania

  	
   

  
	
   

  	
   

  	
  Attn:
  General Counsel

  	
   

  
	
   

  	
   

  	
  Facsimile:

  	
   

  	
   

  
									

 

Section 12.7           Waivers and Consents.  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.  Any
consent required or permitted to be given by any Party to the other Parties
under this Agreement shall be in writing and signed by the Party giving such
consent.

Section 12.8           Amendments.  Subject to the terms of Section 12.11
hereof, this Agreement may not be modified or amended except by an agreement in
writing signed by a duly authorized representative of each of the Parties.

Section 12.9           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, that a

 

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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 12.10         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.

Section 12.11         Certain Termination and Amendment
Rights.  This Agreement (including Article
VIII hereof) may be terminated and each Distribution may be amended,
modified or abandoned at any time prior to the earlier of the Healthcare
Distribution Date or the Electronics Distribution Date by and in the sole
discretion of Tyco without the approval of Healthcare, 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.  After the earlier
of the Healthcare Distribution Date or the Electronics Distribution Date, this
Agreement may not be terminated except by an agreement in writing signed by Tyco,
Healthcare and Electronics.  Notwithstanding
the foregoing, Article VIII shall not be terminated or amended after the
Effective Time in a manner adverse to the third party beneficiaries thereof
without the Consent of any such Person.  Notwithstanding
the foregoing, this Agreement may be terminated or amended as among any Parties
that remain Affiliates, so long as such amendment does not adversely affect any
Party that is no longer an Affiliate, in which case, only with the consent of
such Party.

Section
12.12         Payment Terms.

(a)           Except as expressly provided to the
contrary in this Agreement or in any Ancillary Agreement, any amount to be paid
or reimbursed by any Party (and/or a member of such Party’s Group), on the one
hand, to any other Party or Parties (and/or a member of such Party’s or Parties’
Group), on the other hand, under this Agreement shall be paid or reimbursed
hereunder within thirty (30) days after presentation of an invoice or a written
demand therefor and setting forth, or accompanied by, reasonable documentation
or other reasonable explanation supporting such amount.

(b)           Except as expressly provided to the
contrary in this Agreement (including with respect to certain default payments
in accordance with Section 7.6) or in any Ancillary Agreement, any amount
not paid when due pursuant to this Agreement (and any amount billed or
otherwise invoiced or demanded and properly payable that is not paid within
thirty (30) days of such bill, invoice or other demand) shall bear interest at
a rate per annum equal to the Prime Rate plus four percent (4%) (or the maximum
legal rate, whichever is lower), calculated for the actual number of days
elapsed, accrued from the date on which such payment was due up to the date of
the actual receipt of payment.

Section 12.13         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

 

-109-

 

that the resulting effect is to materially undermine
the effectiveness of any of the provisions of this Agreement or any Ancillary
Agreement (including adversely affecting the rights or ability of any Party to
successfully pursue indemnification, contribution or payment pursuant to Articles
VII and VIII).

Section 12.14         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
applicable Distribution Date.

Section 12.15         Third Party Beneficiaries.  Except (i) as provided in Article VIII
relating to Indemnitees and for the release under Section 8.1 of
any Person provided therein, (ii) as provided in Section 11.2
relating to insured persons and Section 11.7 relating to the
directors, officers, employees, fiduciaries or agents provided therein and
(iii) as specifically provided in any Ancillary Agreement, 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 12.16         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 12.17         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 12.18         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 12.19         Consent to Jurisdiction.  Subject to the provisions of Article X
hereof, each of the Parties irrevocably submits to the exclusive jurisdiction
of (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 “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 Article X or to prevent irreparable harm, and to the
non-exclusive jurisdiction of the New York Courts for the enforcement of any
award issued thereunder.  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 12.19.  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.

 

-110-

 

Section 12.20         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 12.21         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 12.21.

Section 12.22         Severability.  In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby.  The
Parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions, the economic effect
of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

Section 12.23         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 or, unless
otherwise expressly provided therein, any Ancillary 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.  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 12.24         Interpretation.  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.

Section 12.25         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 (including

 

-111-

 

with respect to the rights, entitlements, obligations
and recoveries that may arise out of one or more of the following Sections: Section 3.4;
Section 3.5; Section 7.3; Section 8.2; Section 8.3;
Section 8.4; and Section 8.5).

[Signature
Page Follows]

 

-112-

 

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

TYCO
INTERNATIONAL LTD.

By

Name:

Title:

COVIDIEN
LTD.

By

Name:

Title:

TYCO
ELECTRONICS LTD.

By

Name:

Title:

 

-113-Exhibit 10.2

 

TAX SHARING AGREEMENT

 

by and among

 

TYCO INTERNATIONAL LTD.,

 

TYCO HEALTHCARE LTD.,

 

and

 

TYCO ELECTRONICS LTD.

 

DATED AS OF    , 2007

 

	
   

  	
   

  	
  Page

  
	
  ARTICLE I

  	
  DEFINITIONS AND INTERPRETATION

  	
  2

  
	
   

  	
   

  	
   

  
	
  Section 1.1

  	
  Definitions

  	
  2

  
	
  Section 1.2

  	
  References; Interpretation

  	
  17

  
	
  Section 1.3

  	
  Effective Time

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  PREPARATION AND FILING OF TAX
  RETURNS

  	
  18

  
	
   

  	
   

  	
   

  
	
  Section 2.1

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

  	
  18

  
	
  Section 2.2

  	
  Responsibility of Parties to Prepare and File Straddle Income Tax
  Returns

  	
  20

  
	
  Section 2.3

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

  	
  22

  
	
  Section 2.4

  	
  Time of Filing Tax Returns; Manner of Tax Return Preparation

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  RESPONSIBILITY FOR PAYMENT OF
  TAXES

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 3.1

  	
  Responsibility of Tyco International for Taxes

  	
  22

  
	
  Section 3.2

  	
  Responsibility of Tyco Electronics for Taxes

  	
  23

  
	
  Section 3.3

  	
  Responsibility of Tyco Healthcare for Taxes

  	
  23

  
	
  Section 3.4

  	
  True-Up for Estimated Tax Payments

  	
  23

  
	
  Section 3.5

  	
  Timing of Payments of Taxes

  	
  24

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  REFUNDS, CARRYBACKS AND AMENDED
  TAX RETURNS

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 4.1

  	
  Refunds

  	
  24

  
	
  Section 4.2

  	
  Carrybacks

  	
  24

  
	
  Section 4.3

  	
  Amended Tax Returns

  	
  25

  
	
  Section 4.4

  	
  Agreement from Party Administering and Controlling Audit

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  DISTRIBUTION TAXES

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 5.1

  	
  Liability for Distribution Taxes

  	
  25

  
	
  Section 5.2

  	
  Payment for Use of Tax Attributes by Parties at Fault

  	
  26

  
	
  Section 5.3

  	
  Definition of Fault

  	
  26

  
	
  Section 5.4

  	
  Limits on Proposed Acquisition Transactions and Other Transactions
  During Restricted Period

  	
  26

  
	
  Section 5.5

  	
  Advance Disclosure of Non-Public Transactions

  	
  28

  
	
  Section 5.6

  	
  Qualified Tax Counsel Advance Conflict Waiver

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  EMPLOYEE BENEFIT MATTERS

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 6.1

  	
  Deferred Compensation Deductions

  	
  29

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  INDEMNIFICATION

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 7.1

  	
  Indemnification Obligations of Tyco International

  	
  29

  
	
  Section 7.2

  	
  Indemnification Obligations of Tyco Healthcare

  	
  30

  
	
  Section 7.3

  	
  Indemnification Obligations of Tyco Electronics

  	
  30

  
				

 

i

 

	
  ARTICLE VIII

  	
  PAYMENTS

  	
  30

  
	
   

  	
   

  	
   

  
	
  Section 8.1

  	
  General

  	
  30

  
	
  Section 8.2

  	
  Treatment of Payments made Pursuant to Tax Sharing Agreement

  	
  31

  
	
  Section 8.3

  	
  Treatment of Payments made Pursuant to Separation and Distribution
  Agreement

  	
  32

  
	
  Section 8.4

  	
  Payments Net of Tax Benefit Actually Realized

  	
  32

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  AUDITS

  	
  32

  
	
   

  	
   

  	
   

  
	
  Section 9.1

  	
  Notice

  	
  32

  
	
  Section 9.2

  	
  Pre-Distribution Audits

  	
  32

  
	
  Section 9.3

  	
  Payment of Audit Amounts

  	
  36

  
	
  Section 9.4

  	
  Correlative Adjustments

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  COOPERATION AND EXCHANGE OF
  INFORMATION

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section 10.1

  	
  Cooperation and Exchange of Information

  	
  38

  
	
  Section 10.2

  	
  Retention of Records

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI

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

  	
  40

  
	
   

  	
   

  	
   

  
	
  Section 11.1

  	
  Allocation of Tax Attributes

  	
  40

  
	
  Section 11.2

  	
  Dual Consolidated Losses

  	
  40

  
	
  Section 11.3

  	
  Payment for Use of Certain Tax Attributes

  	
  43

  
	
  Section 11.4

  	
  Consistency with IRS Ruling and Tax Opinions

  	
  43

  
	
  Section 11.5

  	
  Third Party Tax Indemnities and Benefits

  	
  43

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
  DEFAULTED AMOUNTS

  	
  44

  
	
   

  	
   

  	
   

  
	
  Section 12.1

  	
  General

  	
  44

  
	
  Section 12.2

  	
  Subsidiary Funding

  	
  44

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII

  	
  DISPUTE RESOLUTION

  	
  44

  
	
   

  	
   

  	
   

  
	
  Section 13.1

  	
  Negotiation

  	
  44

  
	
  Section 13.2

  	
  Mediation

  	
  45

  
	
  Section 13.3

  	
  Arbitration

  	
  45

  
	
  Section 13.4

  	
  Arbitration with Respect to Monetary Damages

  	
  46

  
	
  Section 13.5

  	
  Arbitration Period

  	
  46

  
	
  Section 13.6

  	
  Treatment of Negotiations, Mediation, and Arbitration

  	
  46

  
	
  Section 13.7

  	
  Continuity of Service and Performance

  	
  46

  
	
  Section 13.8

  	
  Costs

  	
  46

  
	
  Section 13.9

  	
  Consolidation

  	
  47

  
	
  Section 13.10

  	
  Exception to Arbitration

  	
  47

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIV

  	
  MISCELLANEOUS

  	
  47

  
	
   

  	
   

  	
   

  
	
  Section 14.1

  	
  Counterparts; Facsimile Signatures

  	
  47

  
				

 

ii

 

	
  Section 14.2

  	
  Survival

  	
  47

  
	
  Section 14.3

  	
  Notices

  	
  47

  
	
  Section 14.4

  	
  Waivers

  	
  48

  
	
  Section 14.5

  	
  Amendments

  	
  48

  
	
  Section 14.6

  	
  Assignment

  	
  48

  
	
  Section 14.7

  	
  Successors and Assigns

  	
  48

  
	
  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

  	
  49

  
	
  Section 14.12

  	
  Title and Headings

  	
  49

  
	
  Section 14.13

  	
  Exhibits and Schedules

  	
  49

  
	
  Section 14.14

  	
  Governing Law

  	
  49

  
	
  Section 14.15

  	
  Consent to Jurisdiction

  	
  49

  
	
  Section 14.16

  	
  Specific Performance

  	
  49

  
	
  Section 14.17

  	
  Waiver of Jury Trial

  	
  49

  
	
  Section 14.18

  	
  Force Majeure

  	
  50

  
	
  Section 14.19

  	
  Construction

  	
  50

  
	
  Section 14.20

  	
  Changes in Law

  	
  50

  
	
  Section 14.21

  	
  Authority

  	
  50

  
	
  Section 14.22

  	
  Severability

  	
  50

  
	
  Section 14.23

  	
  Tax Sharing Agreements

  	
  51

  
	
  Section 14.24

  	
  Exclusivity

  	
  51

  
	
  Section 14.25

  	
  No Duplication; No Double Recovery

  	
  51

  
	
   

  	
   

  	
   

  
	
  Schedules

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule
  1.1(13)

  	
  List of ATOB Entities

  	
   

  
	
  Schedule
  1.1(50)(c)

  	
  List of U.S. state and local Taxes

  	
   

  
	
  Schedule
  1.1(82)

  	
  List of Qualified Tax Counsel

  	
   

  
	
  Schedule
  1.1(88)

  	
  List of Section 355 Entities

  	
   

  
	
  Schedule
  1.1(98)(a)

  	
  List of U.S. Tax Attributes

  	
   

  
	
  Schedule
  1.1(98)(b)

  	
  List of non-U.S. Tax Attributes

  	
   

  
	
  Schedule
  1.1(108)

  	
  List of Transferee Entities

  	
   

  
	
  Schedule
  1.1(109)

  	
  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
  2.3

  	
  Preparation of Post-Distribution Income Tax Returns and Non-Income
  Tax Returns

  	
   

  
	
  Schedule
  11.1(a)

  	
  Allocation of certain Tax Attributes

  	
   

  
	
  Schedule
  11.2(i)(iv)

  	
  List of entities/branches

  	
   

  
	
  Schedule
  11.2(i)(v)

  	
  List of entities/branches

  	
   

  
	
  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 International”),
Tyco Healthcare Ltd., a Bermuda corporation (“Tyco Healthcare”), and Tyco
Electronics Ltd., a Bermuda corporation (“Tyco Electronics”). Each of Tyco
International, Tyco Healthcare, and Tyco Electronics is sometimes referred to
herein as a “Party” and collectively, as the “Parties”.

 

W I T N E S S E T H:

 

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

 

WHEREAS, in order to effect such separation, the Board of Directors of
Tyco International has determined that it is appropriate, desirable and in the
best interests of Tyco International and its stockholders (i) to enter into a
series of transactions whereby (A) Tyco International and/or one or more
members of the Tyco International Group will, collectively, own all of the Tyco
Retained Assets and assume (or retain) all of the Tyco Retained Liabilities,
(B) Tyco Healthcare and/or one or more members of the Tyco Healthcare Group
will, collectively, own all of the Healthcare Assets and assume (or retain) all
of the Healthcare Liabilities, and (C) Tyco Electronics and/or one or more
members of the Tyco Electronics Group will, collectively, own all of the
Electronics Assets and assume (or retain) all of the Electronics Liabilities
and (ii) for Tyco International to distribute to the holders of Tyco
International 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 Tyco Healthcare (the
“Tyco Healthcare Common Stock”), and (B) all of the outstanding shares of
common stock, par value $0.20 per share, of Tyco Electronics (the “Tyco
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, Tyco
Healthcare and Tyco Electronics together with the corresponding distribution of
all of the Tyco Healthcare Common Stock and the Tyco 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”);

 

1

 

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

 

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 International’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)                                  “Accelerated
Dispute” has the meaning set forth in Section 13.2.

 

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

 

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

 

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

 

(6)                                  “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 

 

2

 

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).

 

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

 

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

 

(9)                                  “Applicable
TUSHI DCLs” has the meaning set forth in Section 11.2(i)(iv).

 

(10)                            “Applicable
TYUSHI DCLs” has the meaning set forth in Section 11.2(i)(v).

 

(11)                            “Apportioned”
means allocated, apportioned, or retained, as the case may be.

 

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

 

(13)                            “ATOB
Entities” mean the entities listed on Schedule 1.1(13).

 

(14)                            “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.

 

(15)                            “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).

 

(16)                            “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).

 

(17)                            “Bankruptcy”
has the meaning set forth in the Separation and Distribution Agreement.

 

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

 

(19)                            “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.

 

(20)                            “Business
Entity” means any corporation, partnership, limited liability company, or
other entity.

 

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

 

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

 

3

 

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

 

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

 

(25)                            “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.

 

(26)                            “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.

 

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

 

(28)                            “Credit
Carryover” means the aggregate of all alternative minimum Tax credit
carryovers, general business credit carryovers, and foreign Tax credit
carryovers pursuant to Section 904(c) of the Code.

 

(29)                            “DCL”
has the meaning set forth in Section 11.2(i)(i).

 

(30)                            “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”).

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

(35)                            “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.

 

(36)                            “DRC”
has the meaning set forth in Section 11.2(i)(iii).

 

(37)                            “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.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

5

 

(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.

 

(46)                            “Final
Tax Attribute Allocation” has the meaning set forth in Section 11.1(b).

 

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

 

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

 

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

 

(50)                            “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, 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 not otherwise included in (a) or (b) above that are
listed on Schedule 1.1(50)(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.

 

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

 

6

 

(52)                            “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.

 

(53)                            “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.

 

(54)                            “Independent
Firm” means a nationally recognized law or accounting firm.

 

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

 

(56)                            “IRS
Ruling” means the requests submitted to the IRS for all private letter
rulings to be obtained by Tyco International 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
International with respect to the Plan of Separation.

 

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

 

(58)                            “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.

 

(59)                            “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.

 

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

 

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

 

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

 

(63)                            “New
York Courts” has the meaning set forth in the Separation and Distribution
Agreement.

 

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

 

(65)                            “Other
Dispute” has the meaning set forth in Section 13.2(b).

 

7

 

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

 

(67)                            “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.

 

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

 

(69)                            “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.

 

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

 

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

 

(72)                            “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.

 

(73)                            “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.

 

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

 

(75)                            “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.

 

(76)                            “Pre-Distribution
Tyco (U.S.) Qualified Plan and TME Payroll Tax Audit” means any Audit for a
Pre-Distribution Tax Period or Straddle Tax Period of (a) Tyco
International (US) Inc. Retirement Savings and Investment Plan I, Tyco
International (US) Inc. Retirement Savings and Investment Plan II, Tyco
International (US) Inc. Retirement Savings and Investment Plan III, Tyco
International (US) Inc. Retirement Savings and Investment Plan IV, Tyco International
(US) Inc. Retirement Savings and Investment Plan V, Tyco International (US)
Inc. Retirement Savings and Investment Plan VI (Puerto Rico), Kendall/ADT
Pension Plan, or Tyco Electronics Pension Plan; or (b) payroll taxes for
TME Management Corp., Citrine Management Corp., or any predecessor payroll
company to TME Management Corp.

 

(77)                            “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

 

8

 

Tax Period or Straddle Tax Period; provided, however,
this term shall not include any Audit that is a Pre-Distribution Transfer
Pricing Tax Audit or a Pre-Distribution Tyco (U.S.) Qualified Plan and TME
Payroll Tax Audit.

 

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

 

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

 

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

 

(81)                            “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.

 

(82)                            “Qualified
Tax Counsel” means any of the law firms listed on Schedule 1.1(82).

 

(83)                            “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; 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.

 

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

 

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

 

9

 

(86)                            “Restricted
Period” means the period beginning the day after the Distribution Date and
ending on the two-year anniversary thereof.

 

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

 

(88)                            “Section
355 Entities” mean the entities listed on Schedule 1.1(88).

 

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

 

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

 

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

 

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

 

(93)                            “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.

 

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

 

(95)                            “SU”
has the meaning set forth in Section 11.2(i)(ii).

 

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

 

(97)                            “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.

 

(98)                            “Tax
Attributes” mean:

 

(a)                                  for
U.S. federal, state, and local Income Tax purposes, earnings and profits, tax
basis, net operating and capital loss carryovers or carrybacks, 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 

 

10

 

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) and that are described on Schedule 1.1(98)(a); and

 

(b)                                 for
non-U.S. (including Swiss federal and cantonal income) tax purposes, the tax
loss attributes set forth in Schedule 1.1(98)(b).

 

(99)                            “Tax
Benefit Actually Realized” means with respect to a Party and its
Subsidiaries determined only with respect to the referenced taxable year, 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 year (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 year
(excluding the effect of any carryforwards of net operating 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 that taxable year (excluding the effect of
any carryforwards of net operating 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 that taxable year (excluding the effect of any carryforwards of net
operating 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.

 

(100)                      “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).

 

(101)                      “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.

 

(102)                      “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).

 

11

 

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

 

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

 

(105)                      “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 a
Shared Entity 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 a Shared Entity 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.

 

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

 

(107)                      “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.

 

(108)                      “Transferee
Entities” mean the entities listed on Schedule 1.1(108).

 

(109)                      “Transferor
Entities” mean the entities listed on Schedule 1.1(109).

 

(110)                      “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).

 

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

 

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

 

(113)                      “Tyco
Electronics Allocable Audit Portion” means the amount of any Taxes
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 Tyco
Electronics-Tyco International Shared Entities or Tyco Electronics-Tyco
Healthcare Shared Entities, as the case may be. The determination of the amount
of additional Taxes attributable to the Tyco Electronics-Tyco International
Shared Entities or the Tyco Electronics-Tyco Healthcare Shared Entities shall
be calculated on a “with 

 

12

 

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 pursuant to the Final Determination if such Taxes were recalculated
excluding the Tyco Electronics-Tyco International Shared Entities or the Tyco
Electronics-Tyco Healthcare Shared Entities; provided, however,
if the sum of the Taxes that would be due and payable determined on a separate
basis for each of the Electronics Assets, the Healthcare Assets, and the Tyco
Retained Assets, respectively, would be different than the additional Taxes
actually due and payable, the Tyco Electronics Allocable Audit Portion shall be
equal to the product of (c) such additional Taxes that are actually due and
payable, and (d) a fraction (i) the numerator of which is the Taxes that would
be due and payable determined on a separate basis for the Electronics Assets,
and (ii) the denominator of which is the sum of the Taxes that would be due and
payable determined on a separate basis for each of the Electronics Assets, the
Healthcare Assets, and the Tyco Retained Assets, respectively. For purposes of
this determination, any Distribution Taxes incurred shall be deemed not to have
been incurred as part of the conduct of the Tyco Electronics-Tyco International
Shared Entities or the Tyco Electronics-Tyco Healthcare Shared Entities,
regardless of which entity incurs such Distribution Taxes.

 

(114)                      “Tyco
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 for such period attributable to any
Tyco Electronics-Tyco International Shared Entities or Tyco Electronics-Tyco
Healthcare Shared Entities (net of any previously paid estimated Taxes for such
period that are attributable to the Tyco Electronics-Tyco International Shared
Entities or the Tyco Electronics-Tyco Healthcare Shared Entities), as the case
may be. The determination of the amount of Taxes attributable to the Tyco
Electronics-Tyco International Shared Entities or the Tyco Electronics-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 were recalculated excluding the Tyco
Electronics-Tyco International Shared Entities or the Tyco Electronics-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
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. For purposes of this determination, any
Distribution Taxes incurred shall be deemed not to have been incurred as part
of the conduct of the Tyco Electronics-Tyco International Shared Entities or
the Tyco Electronics-Tyco Healthcare Shared Entities, regardless of which
entity incurs such Distribution Taxes. In
addition, for purposes of this determination, the amount of previously paid
estimated Taxes attributable to the Tyco Electronics-Tyco International Shared
Entities or the Tyco Electronics-Tyco Healthcare Shared Entities, as the case
may be, shall be equal to the amount of estimated Taxes that were previously
paid in respect to the Electronics Assets.

 

13

 

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

 

(116)                      “Tyco
Electronics Group” has the same meaning as “Electronics Group” as set forth
in the Separation and Distribution Agreement.

 

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

 

(118)                      “Tyco
Electronics-Tyco 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 Tyco Healthcare Tax
Group.

 

(119)                      “Tyco
Electronics-Tyco International 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 International Tax
Group.

 

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

 

(121)                      “Tyco
Healthcare Allocable Audit Portion” means the amount of any Taxes
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 Tyco
Healthcare-Tyco International Shared Entities or Tyco Healthcare-Tyco
Electronics Shared Entities, as the case may be. The determination of the
amount of additional Taxes attributable to the Tyco Healthcare-Tyco
International Shared Entities or the Tyco Healthcare-Tyco 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 pursuant to the Final Determination if such Taxes were recalculated
excluding the Tyco Healthcare-Tyco International Shared Entities or the Tyco
Healthcare-Tyco Electronics Shared Entities; provided, however,
if the sum of the Taxes that would be due and payable determined on a separate
basis for each of the Electronics Assets, the Healthcare Assets, and the Tyco
Retained Assets, respectively, would be different than the additional Taxes
actually due and payable, the Tyco Healthcare Allocable Audit Portion shall be
equal to the product of (c) such additional Taxes that are actually due and
payable, and (d) a fraction (i) the numerator of which is the Taxes that would
be due and payable determined on a separate basis for the Healthcare Assets,
and (ii) the denominator of which is the sum of the Taxes that would be due and
payable determined on a separate basis for each of the Electronics Assets, the
Healthcare Assets, and the Tyco Retained Assets, respectively. For purposes of
this determination, any Distribution Taxes incurred shall be deemed not to have
been incurred as part of the conduct of the Tyco Healthcare-Tyco International
Shared Entities or the Tyco Healthcare-Tyco Electronics Shared Entities,
regardless of which entity incurs such Distribution Taxes.

 

(122)                      “Tyco
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 for such period attributable to any
Tyco Healthcare-Tyco International Shared Entities or Tyco Healthcare-Tyco Electronics
Shared Entities (net of any previously paid estimated Taxes for such period
that are attributable to the Tyco Healthcare-Tyco International 

 

14

 

Shared Entities or the Tyco Healthcare-Tyco Electronics
Shared Entities), as the case may be. The determination of the amount of Taxes
attributable to the Tyco Healthcare-Tyco International Shared Entities or the
Tyco Healthcare-Tyco 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 Tyco Healthcare-Tyco International Shared Entities or the Tyco
Healthcare-Tyco 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 Tyco 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 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. For purposes of
this determination, any Distribution Taxes incurred shall be deemed not to have
been incurred as part of the conduct of the Tyco Healthcare-Tyco International
Shared Entities or the Tyco Healthcare-Tyco Electronics Shared Entities,
regardless of which entity incurs such Distribution Taxes. In addition, for purposes of this
determination, the amount of previously paid estimated Taxes attributable to
the Tyco Healthcare-Tyco International Shared Entities or the Tyco
Healthcare-Tyco Electronics Shared Entities, as the case may be, shall be equal
to the amount of estimated Taxes that were previously paid in respect to the
Healthcare Assets.

 

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

 

(124)                      “Tyco
Healthcare Group” has the same meaning as “Healthcare Group” as set forth
in the Separation and Distribution Agreement.

 

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

 

(126)                      “Tyco Healthcare-Tyco
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 Tyco Electronics Tax Group.

 

(127)                      “Tyco
Healthcare-Tyco International 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 International Tax
Group.

 

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

 

(129)                      “Tyco
International Allocable Audit Portion” means the amount of any Taxes
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 Tyco
International-Tyco Electronics Shared Entities or Tyco 

 

15

 

International-Tyco Healthcare Shared Entities, as the
case may be. The determination of the amount of additional Taxes attributable
to the Tyco International-Tyco Electronics Shared Entities or the Tyco
International-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 pursuant to the Final
Determination if such Taxes were recalculated excluding the Tyco
International-Tyco Electronics Shared Entities or the Tyco International-Tyco
Healthcare Shared Entities; provided, however, if the sum of the
Taxes that would be due and payable determined on a separate basis for each of
the Electronics Assets, the Healthcare Assets, and the Tyco Retained Assets,
respectively, would be different than the additional Taxes actually due and
payable, the Tyco International Allocable Audit Portion shall be equal to the
product of (c) such additional Taxes that are actually due and payable, and (d)
a fraction (i) the numerator of which is the Taxes that would be due and
payable determined on a separate basis for the Tyco Retained Assets, and (ii)
the denominator of which is the sum of the Taxes that would be due and payable
determined on a separate basis for each of the Electronics Assets, the
Healthcare Assets, and the Tyco Retained Assets, respectively. For purposes of
this determination, any Distribution Taxes incurred shall be deemed not to have
been incurred as part of the conduct of the Tyco International-Tyco Electronics
Shared Entities or the Tyco International-Tyco Healthcare Shared Entities,
regardless of which entity incurs such Distribution Taxes.

 

(130)                      “Tyco
International 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 for such period attributable to any
Tyco International-Tyco Electronics Shared Entities or Tyco International-Tyco
Healthcare Shared Entities (net of any previously paid estimated Taxes for such
period that are attributable to the Tyco International-Tyco Electronics Shared
Entities or the Tyco International-Tyco Healthcare Shared Entities), as the
case may be. The determination of the amount of Taxes attributable to the Tyco
International-Tyco Electronics Shared Entities or the Tyco International-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
International-Tyco Electronics Shared Entities or the Tyco International-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
International 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. For purposes of this determination, any
Distribution Taxes incurred shall be deemed not to have been incurred as part
of the conduct of the Tyco International-Tyco Electronics Shared Entities or
the Tyco International-Tyco Healthcare Shared Entities, regardless of which
entity incurs such Distribution Taxes. In
addition, for purposes of 

 

16

 

this determination, the
amount of previously paid estimated Taxes attributable to the Tyco International-Tyco
Electronics Shared Entities or the Tyco International-Tyco Healthcare Shared
Entities, as the case may be, shall be equal to the amount of estimated Taxes
that were previously paid in respect to the Retained Assets.

 

(131)                      “Tyco
International Common Stock” has the same meaning as “Tyco Common Stock” as
set forth in the Separation and Distribution Agreement.

 

(132)                      “Tyco
International Group” has the same meaning as “Tyco Group” as set forth in
the Separation and Distribution Agreement.

 

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

 

(134)                      “Tyco
International-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 Tyco Electronics Tax
Group.

 

(135)                      “Tyco
International-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 Tyco Healthcare Tax
Group.

 

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

 

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

 

(138)                      “TYUSHI”
means TyCom (US) Holdings, Inc.

 

(139)                      “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.

 

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

 

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 

 

17

 

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, 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, and the manner in which the
Parties will share the various costs 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; and (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. 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).

 

18

 

(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.

 

(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 

 

19

 

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
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, and the manner in which the Parties will share the various costs
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; and (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. 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 

 

20

 

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 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 

 

21

 

(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.

 

Section 2.3                                      Responsibility
of Parties to Prepare and File Post-Distribution Income Tax Returns and
Non-Income Tax Returns. Except as otherwise provided on Schedule 2.3, 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 International for Taxes. Except as otherwise provided in this
Agreement, Tyco International 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 International 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 International 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
International is required to file or cause to be filed with such Taxing
Authority pursuant to Section 2.3;

 

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

 

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

 

22

 

Section 3.2                                      Responsibility
of Tyco Electronics for Taxes. Except as otherwise provided in this
Agreement, Tyco 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 Tyco Electronics 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 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 Tyco
Electronics is required to file or cause to be filed with such Taxing Authority
pursuant to Section 2.3;

 

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

 

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

 

Section 3.3                                      Responsibility
of Tyco Healthcare for Taxes. Except as otherwise provided in this
agreement, Tyco 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 Tyco 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 Tyco 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 Tyco
Healthcare is required to file or cause to be filed with such Taxing Authority
pursuant to Section 2.3;

 

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

 

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

 

Section 3.4                                      True-Up
for Estimated Tax Payments. If payments of estimated Taxes are made prior
to the Distributions for a Pre-Distribution Tax Period or a Straddle Tax Period
for which a final Income Tax Return is prepared and filed pursuant to Sections
2.1 and 2.2, respectively (the “Previously Paid Estimated Taxes”), each Party
shall be obligated for the excess 

 

23

 

(if any) of (a) the
amount of such Previously Paid Estimated Taxes that is attributable to such
Party or its Affiliates, determined in accordance with the definitions of Tyco
International Allocable Portion, Tyco Healthcare Allocable Portion, and Tyco
Electronics Allocable Portion, over (b) the Previously Paid Estimated Taxes
actually paid by that Party or its Affiliates. The amount for which a Party is
obligated pursuant to the preceding sentence shall be paid to the Party or
Parties with respect to which the amount calculated in (b) exceeds the amount
calculated in (a) in the manner necessary to eliminate all such differences.

 

Section 3.5                                      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 pursuant to this
Article III shall be paid or caused to be paid by such Party to such other
Party in accordance with Article VIII.

 

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 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 

 

24

 

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.

 

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; 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 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 at
the time and in the manner determined by 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:

 

25

 

(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.

 

(c)                                  Timing
of Payment of Taxes. The Party or Parties that are responsible for
Distribution Taxes pursuant to this Section 5.1 shall pay their shares of such
Distribution Taxes to the applicable Taxing Authority or to one or more of the
other Parties (as the case may be) on or prior to the Due Date of such
Distribution Taxes. To the extent not contrary to the preceding sentence, all
amounts required to be paid by one Party to another Party 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.

 

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.
For purposes of this Section 5.2, the Parties shall assume 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 Entity (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:

 

26

(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 Section 355 Entity;

 

(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 Section 355 Entity or ATOB Entity;

 

(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 ATOB Entity;

 

(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 Section 355 Entity (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, a Section 355 Entity, or a Transferee Entity;

 

(g)                                 issue
shares of a new class of nonvoting stock or approve or allow any Section 355
Entity or Transferee Entity  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 a Transferee Entity to a
Transferor Entity, or a redemption of shares of a Transferee Entity held by a
Transferor Entity (in the case of any Transferee Entity or Transferor Entity,
including any successor thereto);

 

(j)                                     approve
or allow an extraordinary contribution to any Section 355 Entity (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

 

27

 

(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 International 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.

 

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.

 

28

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”) 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 International. Tyco International shall indemnify Tyco
Healthcare and Tyco Electronics and hold them harmless from and against
(without duplication):

 

(a)                                  all
Taxes and other amounts for which the Tyco International 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
International under this Agreement.

 

29

 

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

 

(a)                                  all
Taxes and other amounts for which the Tyco 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 Tyco
Healthcare under this Agreement.

 

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

 

(a)                                  all
Taxes and other amounts for which the Tyco 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 Tyco
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 

 

30

 

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
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.

 

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

 

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

 

31

 

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.
federal 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. 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 shall be reduced by the Tax
Benefit Actually Realized by the Indemnified Party or its Subsidiaries in the
taxable year that the payment or event occurs that gives rise to the
indemnification obligation.

 

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

 

(ii)                                  Tyco
International and its Subsidiaries shall administer and control all
Pre-Distribution Transfer Pricing Tax Audits to the extent such Audits relate
or are attributable to a U.S. entity; provided, however, 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.

 

32

 

(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. Except in the event of 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 in
good faith cooperate with each other 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. The
Parties agree to use reasonable best efforts to cooperate fully in connection
with an Audit (in a manner that will preserve for the Parties the
attorney-client privilege, work product, or other privilege with respect
thereto). 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
with respect to Audits. Each Party that would be responsible under Section
9.3 for Taxes resulting from an Audit (other than the Audit Management Party)
shall have limited participation rights as set forth in this Section 9.2(c)
with respect to such Audit. 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 other Parties that have the right to
participate in such Audit pursuant to this Section 9.2(c) to plan for the management
of such Audit. Thereafter, these Parties shall arrange for a meeting or
conference call to be held on a reasonable periodic basis as necessary to
facilitate regular communication on the administration of the Audit, to enable
the Parties to discharge their obligations under this Agreement, and to satisfy
any of such Parties’ (or their Subsidiaries’) financial reporting or other
regulatory requirements; provided, however, that such meeting or
call shall be held quarterly or on a more frequent basis as the Parties may
agree.

 

(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 six (6) month period 

 

33

 

following a Change of
Control of the Audit Management Party; and (c) the expiration of the six (6)
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 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 and 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 

 

34

 

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 and 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 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 shall provide such
estimate in writing to the other Parties within thirty (30) days of such
Distribution Date. Each of the other Parties shall pay the 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 Audit Management Party, divided
by (b) 5. The Parties shall renegotiate this fee for succeeding periods prior
to the end of such five (5) year period. No adjustment shall be made for any
difference between the internal costs and expenses estimated by the Audit
Management Party and the amount of such costs and expenses that are actually
incurred by the Audit Management Party. The 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 incurred by the
Audit Management Party as described above.

 

(f)            Treatment of Costs and Expenses
related to Pre-Distribution U.S. Income Tax Audits, Pre-Distribution Tyco
(U.S.) Qualified Plan and 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 and 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 or a Pre-Distribution Tyco
(U.S.) Qualified Plan and 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 and Pre-Distribution Tyco (U.S.) Qualified Plan and 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
or a Pre-Distribution Tyco (U.S.) Qualified Plan and TME Payroll Tax Audit from Boca Raton, FL shall be made at
the time and in the manner specified in Section 9.2(d).

 

35

 

Section 9.3             Payment of Audit Amounts.

 

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

 

(i)            Tyco International shall be liable
for and shall pay or cause to be paid to the applicable Taxing Authority, Tyco
Healthcare, or Tyco Electronics (as the case may be) an amount equal to the
Tyco International Sharing Percentage of the additional Taxes owed 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)           Tyco Electronics shall be liable for
and shall pay or cause to be paid to the applicable Taxing Authority, Tyco
International, or Tyco Healthcare (as the case may be) an amount equal to the
Tyco Electronics Sharing Percentage of the additional Taxes owed 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)          Tyco Healthcare shall be liable for
and shall pay or cause to be paid to the applicable Taxing Authority, Tyco
International, or Tyco Electronics (as the case may be) an amount equal to the
Tyco Healthcare Sharing Percentage of the additional Taxes owed 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 International shall be liable
for and shall pay or cause to be paid to the applicable Taxing Authority, Tyco
Healthcare, or Tyco Electronics (as the case may be) an amount equal to the
Tyco International Sharing Percentage of the additional Taxes owed 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)           Tyco Electronics shall be liable for
and shall pay or cause to be paid to the applicable Taxing Authority, Tyco
International, or Tyco Healthcare (as the case may be) an amount equal to the
Tyco Electronics Sharing Percentage of the additional Taxes owed 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)          Tyco Healthcare shall be liable for
and shall pay or cause to be paid to the applicable Taxing Authority, Tyco
International, or Tyco Electronics (as the case may be) an amount equal to the
Tyco Healthcare Sharing Percentage of the additional Taxes owed 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 (excluding
Pre-Distribution Tyco (U.S.) Qualified Plan and TME Payroll Tax Audits that are
addressed in Section 9.3(d)):

 

36

 

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

 

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

 

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

 

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

 

(i)            Tyco International shall be liable
for and shall pay or cause to be paid to the applicable Taxing Authority, Tyco
Healthcare, or Tyco Electronics (as the case may be) eighty-three percent (83%)
of the amount owed as a result of such Final Determination.

 

(ii)           Tyco Electronics shall be liable for
and shall pay or cause to be paid to the applicable Taxing Authority, Tyco
International, or Tyco Healthcare (as the case may be) ten percent (10%) of the
amount owed as a result of such Final Determination.

 

(iii)          Tyco Healthcare shall be liable for
and shall pay or cause to be paid to the applicable Taxing Authority, Tyco
International, or Tyco Electronics (as the case may be) seven percent (7%) of
the amount owed as a result of such Final Determination.

 

(e)           Adjustments to Refunds.
Notwithstanding Section 9.3(a), (b), (c), or (d), 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(e), an amount shall be considered to be owed when it is actually
paid or satisfied pursuant to an offset.

 

(f)            Payment Procedures. In
connection with any Audit that results in an amount to be paid pursuant to
Section 9.3(a), (b), (c), or (d), 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), or (e), 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(f), 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 such disputed item or items and the
basis for its objection. If no Party objects by proper written notice to the
other Parties 

 

37

 

within the time period
described in this Section 9.3(f), 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(f). 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.

 

(g)           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 and 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 the taxable year of 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) with 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, 

 

38

 

Audits, determinations by
Tyco International with respect to the allocation 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, 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;

 

(c)           the use of the Party’s reasonable
best efforts to obtain any documentation 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 to take delivery of the documentation described
in the notice at their expense during the succeeding sixty (60) day period.

 

39

 

ARTICLE XI

 

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

 

Section 11.1           Allocation of Tax Attributes.

 

(a)           General. To the extent not
already provided, no later than twenty (20) Business Days after the end of each
fiscal quarter ending on or after the Effective Time and on or prior to
September 30, 2007, Tyco International shall provide to each of the Spinco
Parties an estimate (or an updated estimate) of the Tax Attributes allocated or
inuring to such Party and its Subsidiaries as a result of the Distributions and
related transactions for U.S. federal, state, local, and non-U.S. Tax purposes;
provided, however, that (i) the Tax Attributes listed on Schedule
11.1(a) shall be allocated on the basis described thereon, and (ii) the
allocation of Tax Attributes by Tyco International shall be made in accordance
with applicable Law (as reasonably determined by Tyco International) and
consistent with the allocations of Tax Attributes reflected in the financial
statements included in the registration statement filed on or with the Forms 10
and S-1, filed by each of Tyco Healthcare, Tyco Electronics, and Tyco
International, as applicable.

 

(b)           Final Tax Attribute Allocation.
No later than December 31, 2007, Tyco International shall provide to each of
the Spinco Parties a final allocation of the Tax Attributes allocated to such
Party and its Subsidiaries, which allocation shall be in accordance with the
proviso in Section 11.1(a) (the “Final Tax Attribute Allocation”).

 

(c)           Consistency. None of the
Parties or their Subsidiaries shall take any position inconsistent with the
estimated allocation of Tax Attributes pursuant to Section 11.1(a) (in the case
of positions taken prior to the Final Tax Attribute Allocation) or the Final
Tax Attribute Allocation pursuant to Section 11.1(b) (in the case of positions
taken at the time of or after the Final Tax Attribute Allocation), except to
the extent that a reallocation of such Tax Attributes is required pursuant to a
Final Determination.

 

Section 11.2           Dual Consolidated Losses.

 

(a)           For the U.S. federal affiliated group
of which TUSHI is the Common Parent filing U.S. federal consolidated Tax
Returns, Tyco International with assistance and cooperation from Tyco
Electronics shall (and shall cause its Subsidiaries to) comply with all
applicable reporting requirements contained in Treasury Regulations Sections
1.1503-2 and 1.1503-2T (or any successor Treasury Regulation) with respect to
the Applicable TUSHI DCLs for each Tax year up to and including the Tax year
that includes the Distribution Date.

 

(b)           For the U.S. federal affiliated group
of which TYUSHI is the Common Parent filing U.S. federal consolidated Tax
Returns, Tyco International (with assistance and cooperation from Tyco
Electronics) shall (and shall cause its Subsidiaries to) comply with all
applicable reporting requirements contained in Treasury Regulations Sections
1.1503-2 and 1.1503-2T (or any successor Treasury Regulation) with respect to
the Applicable TYUSHI DCLs for each Tax year up to and including the Tax year
that includes the Distribution Date.

 

40

 

(c)           In conjunction with the
Distributions, Tyco International and Tyco Electronics shall (and if necessary
shall cause their Subsidiaries 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 the Applicable TUSHI DCLs, provided that the Parties applicable
Subsidiaries otherwise satisfy any applicable conditions for entering into such
a closing agreement that are published by the IRS on or prior to the
Distribution Date. In the event of a successor Treasury Regulation, Tyco
International and/or Tyco Electronics shall (and if necessary shall cause their
Subsidiaries to) execute any agreement or election required in lieu of or in
addition to the closing agreement described in Treasury Regulations Section
1.1503-2(g)(2)(iv)(B)(3)(i). If, as a result of an act or omission by Tyco
International, such a closing agreement or successor agreement or election is
not entered in conjunction with the Distributions, then Tyco Electronics shall
(or shall cause its Subsidiaries to) include any Applicable TUSHI DCL recapture
income in its U.S. federal consolidated taxable income for the year of the
Distributions and Tyco International shall be liable for and shall indemnify
Tyco Electronics and its Affiliates for the U.S. Tax liability (before taking
into account any Tax credit utilization) and all interest due pursuant to Treasury
Regulations Section 1.1503-2(g)(2)(vii) or any successor Treasury Regulation.

 

(d)           In conjunction with the
Distributions, Tyco International and Tyco Electronics shall (and if necessary
shall cause their Subsidiaries 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 the Applicable TYUSHI DCLs, provided that the Parties applicable
Subsidiaries otherwise satisfy any applicable conditions for entering into such
a closing agreement that are published by the IRS on or prior to the
Distribution Date. In the event of a successor Treasury Regulation, Tyco
International and/or Tyco Electronics shall (and if necessary shall cause their
Subsidiaries to) execute any agreement or election required in lieu of or in
addition to the closing agreement described in Treasury Regulations Section
1.1503-2(g)(2)(iv)(B)(3)(i). If, as a result of an act or omission by Tyco
International, such a closing agreement or successor agreement or election is
not entered in conjunction with the Distributions, then Tyco Electronics shall
(or shall cause its Subsidiaries to) include any Applicable TYUSHI DCL
recapture income in its U.S. federal consolidated taxable income for the year
of the Distributions and Tyco International shall be liable for and shall
indemnify Tyco Electronics and its Affiliates for the U.S. Tax liability
(before taking into account any Tax credit utilization) and all interest due
pursuant to Treasury Regulations Section 1.1503-2(g)(2)(vii) or any successor
Treasury Regulation.

 

(e)           If a closing agreement described in
Treasury Regulations Section 1.1503-2(g)(2)(iv)(B)(3)(i) is entered into for
the Applicable TUSHI DCLs, or if a similar agreement or election is entered
pursuant to a successor Treasury Regulation, Tyco International shall (and
shall cause its Subsidiaries to), with respect to the Applicable TUSHI DCLs,
comply with all of the applicable DCL filing requirements contained in Treasury
Regulations Sections 1.1503-2 and 1.1503-2T or any successor Treasury
Regulation, including the filing of a “new (g)(2) election” as described in
Treasury Regulations Section 1.1503-2T(g)(2)(iv)(B)(3)(iii) or any successor
Treasury Regulation. This paragraph shall also apply in the event Tyco
International or its Subsidiaries file a federal Tax Return for a taxable year
following the Distributions at a time when a request for a closing agreement
described in Treasury Regulations Section 1.1503-2(g)(2)(iv)(B)(3)(i) (or a
request for a similar agreement under a successor Treasury Regulation) is
pending with the IRS.

 

41

 

(f)            If a closing agreement described in
Treasury Regulations Section 1.1503-2(g)(2)(iv)(B)(3)(i) is entered into for
the Applicable TYUSHI DCLs, or if a similar agreement or election is entered
pursuant to a successor Treasury Regulation, Tyco International shall (and
shall cause its Subsidiaries to), with respect to the Applicable TYUSHI DCLs,
comply with all of the applicable DCL filing requirements contained in Treasury
Regulations Sections 1.1503-2 and 1.1503-2T or any successor Treasury
Regulation, including the filing of a “new (g)(2) election” as described in
Treasury Regulations Section 1.1503-2T(g)(2)(iv)(B)(3)(iii) or any successor
Treasury Regulation. This paragraph shall also apply in the event Tyco
International or its Subsidiaries file a federal Tax Return for a taxable year
following the Distributions at a time when a request for a closing agreement
described in Treasury Regulations Section 1.1503-2(g)(2)(iv)(B)(3)(i) (or a
request for a similar agreement under a successor Treasury Regulation) is
pending with the IRS.

 

(g)           If, subsequent to the Distributions,
an event occurs that requires an Applicable TUSHI DCL to be recaptured pursuant
to Treasury Regulations Section 1.1503-2(g)(2)(vii) and/or a closing agreement
described in Treasury Regulations Section 1.1503-2(g)(2)(iv)(B)(3)(i), or if an
event occurs that requires an Applicable TUSHI DCL to be recaptured pursuant to
a successor to Treasury Regulations Section 1.1503-2(g)(2)(vii) and/or an
agreement or election pursuant to a successor to Treasury Regulations Section
1.1503-2(g)(2)(iv)(B)(3)(i), Tyco International shall (or shall cause its
Subsidiaries to) include the DCL recapture in its U.S. federal consolidated
taxable income and shall pay any associated interest due pursuant to the
applicable Treasury Regulation and/or agreement or election.

 

(h)           If, subsequent to the Distributions,
an event occurs that requires an Applicable TYUSHI DCL to be recaptured
pursuant to Treasury Regulations Section 1.1503-2(g)(2)(vii) and/or a closing
agreement described in Treasury Regulations Section
1.1503-2(g)(2)(iv)(B)(3)(i), or if an event occurs that requires an Applicable
TYUSHI DCL to be recaptured pursuant to a successor to Treasury Regulations
Section 1.1503-2(g)(2)(vii) and/or an agreement or election pursuant to a
successor to Treasury Regulations Section 1.1503-2(g)(2)(iv)(B)(3)(i), Tyco
International shall (or shall cause its Subsidiaries to) include the DCL
recapture in its U.S. federal consolidated taxable income and shall pay any
associated interest due pursuant to the applicable Treasury Regulation and/or
agreement or election.

 

(i)            For purposes of this Agreement:

 

(i)            “DCL” means “dual
consolidated loss” within the meaning of Section 1503(d) of the Code and
Treasury Regulations Section 1.1503-2(c)(5).

 

(ii)           “SU” means “separate unit”
within the meaning of Treasury Regulations Sections 1.1503-2(c)(3) and
1.1503-2(c)(4).

 

(iii)          “DRC” means “dual resident
corporation” within the meaning of Treasury Regulations Section 1.1503-2(c)(2).

 

(iv)          “Applicable TUSHI DCLs” means
each of the DCLs with respect to interests in the entities (or non-U.S.
branches of the entities) that constitute SUs and that are listed on Schedule
11.2(i)(iv).

 

42

 

(v)           “Applicable TYUSHI DCLs” means
each of the DCLs with respect to interests in the entities (or non-U.S.
branches of the entities) that constitute SUs and that are listed on Schedule
11.2(i)(v).

 

(j)            Notwithstanding anything to the
contrary in this Agreement, in the event of a breach of an obligation of a
Party pursuant to this Section 11.2, (i) in connection with any Tax liability
for a Post-Distribution Tax Period, the breaching Party’s indemnification
obligation to the non-breaching Party (or Parties) pursuant to Article VII
shall be determined without regard to any Tax credit utilization, and (ii) in
connection with any Tax period other than a Post-Distribution Tax Period, in
addition to the obligations of a breaching Party pursuant to Article VII, the
breaching Party shall indemnify the other Parties for the aggregate amount of
all Credit Carryovers and/or other Tax Attributes that would have been
apportioned to such Party and its Subsidiaries under applicable principles of
the Code and the Treasury Regulations thereunder (and Article XI hereof) as of
its first Post-Distribution Tax Period had the breach not occurred (without
applying a discount for the time value of money or for the future lack of
certainty of realization and assuming an effective Tax rate of thirty-eight
percent (38%)).

 

Section 11.3           Payment for Use of Certain Tax
Attributes. If Tyco
Healthcare utilizes any Tax Attribute described in Schedule 11.3 during a Tax
year, resulting in a Tax Benefit Actually Realized in that year, Tyco
Healthcare shall promptly notify the other Parties and shall pay each of the
other Parties, 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. Tyco 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 Tyco 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.

 

Section 11.4           Consistency with IRS Ruling and
Tax Opinions. 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 11.5           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 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.

 

43

 

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.

 

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 

 

44

 

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 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).

 

45

 

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 (i) this Agreement, (ii) any
Ancillary Agreement or (iii) any other agreement entered into by the Parties
pursuant to this Agreement or any Ancillary 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 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.

 

46

 

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 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 International:

 

To Tyco Healthcare:

 

To Tyco Electronics:

 

47

 

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; 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 International without the approval of Tyco Healthcare or Tyco Electronics
or the stockholders of Tyco International. 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 applicable Distribution Date.

 

48

 

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 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. 

 

49

 

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.

 

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 

 

50

 

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.

 

51

 

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: 

  
	
   

  	
   

  
	
   

  	
  TYCO HEALTHCARE LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name: 

  
	
   

  	
  Title: 

  
	
   

  	
   

  
	
   

  	
  TYCO ELECTRONICS LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name: 

  
	
   

  	
  Title: 

  

 

52

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