Document:

Exhibit
4.5

CERTIFICATE
OF STOCK

	
  CLASS B

  COMMON STOCK

  	
   

  	
   

  	
   

  	
  CLASS B

  COMMON STOCK

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NUMBER

  B-1032

  	
   

  	
   

  	
   

  	
  SHARES

  
	
   

  	
   

  

 

	
  

  	
  ICO
  GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED

  	
  CUSIP 44930K 20
  7

  
	
   

  	
   

  	
   

  
	
   

  	
  INCORPORATED
  UNDER THE LAWS OF THE STATE OF DELWARE

  	
  SEE REVERSE FOR
  CERTAIN DEFINITIONS

  

 

THIS CERTIFIES THAT

 

 

 

SPECIMEN

 

 

 

Is the record holder of

 

FULLY PAID AND
NONASSESSABLE SHARES OF CLASS B COMMON STOCK, $0.01 PAR VALUE PER SHARE OF                                       ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED                                              transferable
only in the books of the Corporation by the holder hereof in person or by duly
authorized Attorney upon surrender of this certificate properly endorsed.  This certificate is not valid until
countersigned by the Transfer Agent and Registrar.

 

WITNESS the facsimile
seal of the Corporation and the facsimile signatures of its duly authorized
officers.

 

DATED:                 SPECIMEN

 

	
  

  	
  [SEAL]

  	
   

  
	
  SECRETARY

  	
  CHIEF EXECUTIVE
  OFFICER

  

 

COUNTERSIGNED AND REGISTERED:

 

MELLON INVESTOR SERVICES LLC

 

TRANSFER AGENT AND
REGISTRAR

 

BY

AUTHORIZED SIGNATURE

 

ICO GLOBAL COMMUNICATIONS
(HOLDINGS) LIMITED

 

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

 

	
  TEN COM

  	
  – as tenants in
  common 

  	
   

  	
  UNIF GIFT MIN
  ACT–                 Custodian

  
	
  TEN ENT

  	
  – as tenants by
  the entireties

  	
   

  	
                                          
  (Cust)                                
  (Minor)

  
	
  JT TEN

  	
  – as joint
  tenants with right

  	
   

  	
   

  
	
   

  	
     of survivorship and not as

  	
   

  	
                             under Uniform
  Gifts to Minors

  
	
   

  	
     tenants in common

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
                             Act

  
	
   

  	
   

  	
   

  	
                                                                  (State)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  UNIF TRF MIN ACT–                  Custodian (until age                      )

  
	
   

  	
   

  	
   

  	
                                          (Cust)       

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
                                                                      under  Uniform Transfers

  
	
   

  	
   

  	
   

  	
                                                  (Minor)           

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
                             to Minors Act

  
	
   

  	
   

  	
   

  	
                                                                     (State)

  

 

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

 

For Value Received,
                                                                                    
hereby sell, assign and transfer unto

 

PLEASE INSERT SOCIAL SECURITY SECURITY OR OTHER

                IDENTIFYING
NUMBER OF ASSIGNEE

 

 

(PLEASE PRINT OR TYPEWRITE
NAME AND ADDRESS, INCLUDING ZIP CODE OF ASSIGNEE(S)

 

 

 

Shares represented by the within Certificate, and do hereby irrevocably
constitute and

 

appoint                                                                                                                                                       Attorney
to transfer the said Shares on the books of the within named Corporation with
full power of substitution in the premises.

 

	
  Dated

  	
   

  	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NOTICE: THE
  SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON
  THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR
  ENLARGEMENT, OR ANY CHANGE WHATEVER.

  
				

 

Signatures(s) Guaranteed

 

 

	
  By:

  	
   

  	
   

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

  	
   

  
	
   

  	
   

  

 

This certificate evidences
shares of Class B Common Stock of the corporation.  Other classes of shares of the corporation
are and may in the future be authorized, any those classes may consist of one
or more series of shares, each with different rights, preferences and
limitations. The corporation will furnish any stockholder, upon request and
without charge, a full statement of the powers, designations, preferences and
relative, participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations or restrictions of
such preferences and/or rights.

 

Keep this certificate in
a safe place.  If it is lost, stolen, or
destroyed the corporation may require a bond of indemnity as a condition to the
issuance of a replacement certificate.Exhibit 10.39

 

Final Execution
Copy

SALE OF
MAGNETEK, INC.

POWER
ELECTRONICS GROUP

to

POWER-ONE
INC.,

a Delaware corporation;

As of September 28, 2006

 

 

TABLE OF
CONTENTS

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I THE ACQUISITION

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.1

  	
   

  	
  Purchase and Sale of Acquired Shares and Purchase
  Assets

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.2

  	
   

  	
  Assumption of Liabilities

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.3

  	
   

  	
  Retained Assets

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.4

  	
   

  	
  Retained Liabilities

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.5

  	
   

  	
  Consideration

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.6

  	
   

  	
  Initial Closing Indebtedness Amount

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.7

  	
   

  	
  Post-Closing Adjustment to Purchase Price

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.8

  	
   

  	
  Closing

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.9

  	
   

  	
  Closing Deliveries

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.10

  	
   

  	
  Purchase Price Allocation

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER

  	
   

  	
  8

  
	
   

  	
   

  	
   

  
	
  2.1

  	
   

  	
  Organization

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.2

  	
   

  	
  Organizational Documents

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.3

  	
   

  	
  Subsidiaries; Ownership of Shares

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.4

  	
   

  	
  Authority

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.5

  	
   

  	
  Non-Contravention; Required Consents

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.6

  	
   

  	
  Capitalization

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.7

  	
   

  	
  Financial Statements; Accounting Controls

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.8

  	
   

  	
  Absence of Changes

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.9

  	
   

  	
  Suppliers and Customers

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.10

  	
   

  	
  Intellectual Property

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.11

  	
   

  	
  Real Property; Title
  to Assets; Equipment

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.12

  	
   

  	
  Related Party Transactions

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 i
 

 

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  2.13

  	
   

  	
  Contracts

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.14

  	
   

  	
  Legal Proceedings

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.15

  	
   

  	
  Governmental Authorizations; Legal Compliance

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.16

  	
   

  	
  Tax Matters

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.17

  	
   

  	
  Employee Benefit Matters

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.18

  	
   

  	
  Environmental Matters

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.19

  	
   

  	
  Labor Relations

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.20

  	
   

  	
  Product Warranty and Product Liability

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.21

  	
   

  	
  Brokers

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.22

  	
   

  	
  Insurance

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.23

  	
   

  	
  Bank Accounts; Powers of Attorney

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.24

  	
   

  	
  Sarbanes Oxley Certifications

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.25

  	
   

  	
  Export Control

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.26

  	
   

  	
  HSR Act

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.27

  	
   

  	
  Disclaimer of Representations and Warranties

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III REPRESENTATIONS AND WARRANTIES OF BUYER

  	
   

  	
  24

  
	
   

  	
   

  	
   

  
	
  3.1

  	
   

  	
  Due Organization

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.2

  	
   

  	
  Authority; Binding Nature

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.3

  	
   

  	
  Non-Contravention; Consents

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.4

  	
   

  	
  Brokers

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.5

  	
   

  	
  Litigation

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.6

  	
   

  	
  Sufficient Funds

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.6

  	
   

  	
  Sufficient Funds

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.8

  	
   

  	
  Acknowledgment Regarding Transaction

  	
   

  	
  25

  

 

 ii
 

 

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV CERTAIN COVENANTS OF THE PARTIES

  	
   

  	
  25

  
	
   

  	
   

  	
   

  
	
  4.1

  	
   

  	
  Access to Information

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.2

  	
   

  	
  Operation of the Group

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.3

  	
   

  	
  No Solicitation

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.4

  	
   

  	
  Confidentiality

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.5

  	
   

  	
  Filings; Consents

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.6

  	
   

  	
  Further Assurances

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.7

  	
   

  	
  Public Disclosure

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.8

  	
   

  	
  Notification of Certain Matters; Effect of
  Notification

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.9

  	
   

  	
  Tax Returns

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.10

  	
   

  	
  Expenses

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.11

  	
   

  	
  Pending Litigation

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.12

  	
   

  	
  [Intentionally Omitted]

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.13

  	
   

  	
  Limitations

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.14

  	
   

  	
  Approvals

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.15

  	
   

  	
  Notices and Cooperation

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.16

  	
   

  	
  Accounts Receivable

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.17

  	
   

  	
  Disclosure Schedule
  Updates

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.18

  	
   

  	
  Delivery of Monthly
  Financial Statements

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.19

  	
   

  	
  Employees

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.20

  	
   

  	
  Intellectual Property Licenses

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V CLOSING CONDITIONS

  	
   

  	
  36

  
	
   

  	
   

  	
   

  
	
  5.1

  	
   

  	
  Conditions to Each Party’s Obligations

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.2

  	
   

  	
  Conditions to Buyer’s Obligations

  	
   

  	
  37

  

 

 iii
 

 

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  5.3

  	
   

  	
  Conditions to Obligations of Seller

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI TERMINATION

  	
   

  	
  38

  
	
   

  	
   

  	
   

  
	
  6.1

  	
   

  	
  Termination

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.2

  	
   

  	
  Effect of Termination

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.3

  	
   

  	
  Procedure Upon Termination

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII INDEMNIFICATION

  	
   

  	
  39

  
	
   

  	
   

  	
   

  
	
  7.1

  	
   

  	
  Survival of Representations, Warranties and
  Covenants

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.2

  	
   

  	
  Indemnification by
  Seller

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.3

  	
   

  	
  Limitations on Seller’s Indemnification Liability

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.4

  	
   

  	
  Indemnification by Buyer

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.5

  	
   

  	
  Notice of Claim

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.6

  	
   

  	
  Defense of Third-Party Claims

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.7

  	
   

  	
  Resolution of Claims

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.8

  	
   

  	
  Purchase Price Adjustment

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.9

  	
   

  	
  Exclusive Remedy; Limitation on Damages

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.10

  	
   

  	
  Damages Net of Insurance; Taxes

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.11

  	
   

  	
  Environmental Indemnity Procedures

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII MISCELLANEOUS PROVISIONS

  	
   

  	
  45

  
	
   

  	
   

  	
   

  
	
  8.1

  	
   

  	
  Amendment; Waiver

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.2

  	
   

  	
  Applicable Law; Severability

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.3

  	
   

  	
  Attorneys’ Fees

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.4

  	
   

  	
  Venue for Dispute Resolution

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.5

  	
   

  	
  Assignability; Third Party Beneficiary

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.6

  	
   

  	
  Notices

  	
   

  	
  46

  

 

 iv
 

 

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  8.7

  	
   

  	
  Construction

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.8

  	
   

  	
  Interpretation

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.9

  	
   

  	
  Counterparts

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.10

  	
   

  	
  Telecopy Execution and Delivery

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.11

  	
   

  	
  Entire Agreement

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.12

  	
   

  	
  Equitable Relief; Cumulative Remedies

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX DEFINITIONS

  	
   

  	
  48

  

 

 v

 

PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE
AGREEMENT (this “Agreement”),
dated as of September 28, 2006, is made by and among Magnetek, Inc., a Delaware
corporation (“Seller”)
and Power-One Inc, a Delaware corporation (“Buyer”). 
Except as otherwise indicated,
capitalized terms have the meanings set forth in Article IX.

BACKGROUND

WHEREAS,
Seller, Magnetek, S.p.A.,
a società per azioni organized
and existing under the laws of Italy, with registered office in Terranuova
Bracciolini (Arezzo, Italy) at Via San Giorgio 642, fiscal code/Register of
Enterprises of Arezzo no. 09286180154, fully paid-in corporate capital of Euro
22,000,000.00 (“Magnetek
Italy”), Magnetek kFT, a Hungarian corporation and
wholly-owned subsidiary of Magnetek Italy (“Magnetek Hungary”), Magnetek
Vetriebsgesellschaft GmbH, a German corporation and wholly-owned subsidiary of
Magnetek Italy (“Magnetek
Germany”), and
Magnetek Electronics (Shenzhen) Co. Ltd., a Chinese corporation and
wholly-owned subsidiary of Magnetek Italy (“Magnetek China”, and together with
Magnetek Italy, Magnetek Germany and Magnetek Hungary, the “Companies”, and each
a “Company”)
have
heretofore collectively and individually engaged (including through the
operations of Seller currently conducted in Chatsworth, California), inter alia, in the business of designing,
manufacturing and selling digital and analog power electronic products,
including custom and standard power components and alternative energy power
conversion products, as well as integrated power and control systems (including
motor control systems of appliances and white goods) used in a variety of
industries, through Seller’s Power Electronics group (the “Group”) (hereinafter,
the above-referenced business of the Group is referred to as the “Business”, and the
Business conducted by Seller at its facility in Chatsworth, California is
referred to as the “US Business”);

WHEREAS,
Seller owns all of the issued and outstanding stock of Magnetek Italy,
consisting of 22,000,000 shares of common stock, par value 1 Euro each
(collectively, the “Acquired
Shares”); and

WHEREAS,
Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, the
Group, such sale to be effected by the conveyance to Buyer of (i) all of the
Acquired Shares and (ii) all of the rights, properties and other assets of
every kind and nature, tangible and intangible, absolute or contingent, of
Seller used primarily in or relating to the US Business (including but not
limited to those set forth on Schedule 1.1, but excluding the Retained
Assets (collectively, the items described in this clause (ii) are
referred to herein as the “Purchase
Assets”)), subject to the liabilities of Seller primarily
relating to the Business (excluding the Indemnified Liabilities), for the
consideration and on the terms set forth in this Agreement (the “Acquisition”).

NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

ARTICLE I

THE ACQUISITION

1.1                                 Purchase and Sale of Acquired Shares and
Purchase Assets.  Subject to the terms and conditions of this
Agreement, at the Closing, Seller will sell, convey, transfer and deliver to
Buyer, and Buyer will acquire and accept from Seller, all right, title and
interest of Seller in and to the Acquired Shares and the Purchase Assets.

 1
 

 

1.2                                 Assumption of Liabilities.  On
the terms and subject to the conditions of this Agreement, Buyer agrees to
assume, effective as of the Closing, and thereafter to pay, perform or
discharge the Assumed Liabilities.  The “Assumed Liabilities”
shall mean only the Liabilities of Seller primarily arising out of the
operations of the US Business, absolute or contingent, whether arising before
or after the Closing, including the following but in any case excluding the
Indemnified Liabilities:

(a)                                  all Liabilities under the Assigned Contracts;
and

(b)                                 all accrued and unpaid payables of the US
Business to the extent accrued as a liability on the Final Closing Balance
Sheet, to the extent not paid prior to Closing.

1.3                                 Retained Assets. 
Notwithstanding anything herein to the contrary, the assets listed on Schedule
1.3 are not included in the Purchase Assets and shall be retained by Seller
(the “Retained Assets”).

1.4                                 Indemnified Liabilities. 
Except as expressly assumed by Buyer pursuant to Section 1.2,
none of Buyer or any of its Affiliates will assume or be liable for any
Liabilities of Seller, whether arising before or after the Closing, and whether
relating to periods before or after the Closing (collectively, the “Retained Seller Liabilities”). In
addition to and without limiting the generality of the prior sentence, each of
the following Liabilities, whether arising before or after the Closing and
whether relating to periods before or after the Closing are collectively
referred to in this Agreement as the “Indemnified Group
Liabilities” and, together with the Retained Seller Liabilities,
are collectively referred to in this Agreement as the “Indemnified Liabilities”:

(a)                                  all Liabilities under the Non-Assigned
Contracts;

(b)                                 all Liabilities of Seller under or arising or
resulting from any Employee Benefit Plan whether or not set forth on Schedule
2.17(a), whether relating to periods before or after the Closing Date, and
including all Liabilities disclosed on Schedule 2.17(c) and Schedule
2.17(d) or arising with respect to the matters identified on Schedule
2.17(e);

(c)                                  all Liabilities for Taxes of Seller, except
to the extent provided in Section 4.10;

(d)                                 all Indebtedness of Seller, other than
obligations under capitalized leases to the extent accrued as a liability on
the Final Closing Balance Sheet

(e)                                  all Liabilities arising or resulting from the
Retained Assets;

(f)                                    all Liabilities for fees and expenses (except
to the extent provided in Section 4.10) incurred by or on behalf of
Seller or its Affiliates prior to or at the Closing in connection with this
Agreement, any Transaction Document or the Acquisition, including any finder’s
fee or similar charge or commission due to any Person who has acted for Seller
or its Affiliates in connection with the transactions contemplated by this
Agreement;

(g)                                 all Liabilities arising or resulting from
Legal Proceedings relating to the Business that are pending as of the Closing
(regardless of whether the Liabilities are known or alleged as of the Closing,
and regardless of whether the Liabilities arise before or after the Closing but
only to the extent that such Liabilities arise or result from such Legal
Proceedings), including those Legal Proceedings set forth on Schedule
2.14(a);

 2
 

 

(h)                                 all Liabilities arising or resulting from any
Pending Claims and all Liabilities arising or resulting from the matters
described in the letter set forth on Schedule 2.10(b)(1)(B), or any
counterclaims arising or resulting therefrom;

(i)                                     all Liabilities arising or resulting from
Environmental Claims, subject to Section 7.11;

(j)                                     all Liabilities arising or resulting from any
third-party claim of infringement, violation, or misappropriation of any
Intellectual Property Rights of any Person related to or arising from any
lighting product that is or was included in any Product of Seller;

(k)                                  all Liabilities owing by any Company to
Seller or any Affiliate of Seller (other than a Company);

(l)                                     all Liabilities owing by Magnetek Italy to
the directors of Magnetek Italy in their capacity as director before the
Closing, to the extent that a release therefor for the benefit of Magnetek
Italy is not obtained from such director as of the Closing;

(m)                               all Liabilities arising or resulting from
claims under any Warranty provided by the Business prior to the Closing Date
made within eighteen (18) months following the Closing Date (provided that
Buyer notifies Seller within 30 days of the expiration of such period) for
service, repair, replacement or similar work with respect to any Products
manufactured or sold or services provided by the Business on or before the
Closing Date, the aggregate costs and expenses of which, at shop level cost
(direct materials, direct labor and factory overhead) as well as out-of-pocket
costs and expenses in connection with servicing such claims (including site
visit and field support), exceed the warranty reserve on the Final Closing
Balance Sheet.  To the extent Warranty
claims are made after the Closing Date in respect of Products manufactured
prior to the Closing Date but sold thereafter, Seller’s liability shall be
limited to the terms of its Warranty provided for such product prior to the
Closing Date; and

(n)                                 all reasonable out-of-pocket costs and
expenses up to but not exceeding $250,000 incurred by any Buyer Indemnitee in
connection with moving the facility referenced on Schedule 2.11(d) to
another location as a result of circumstances disclosed in the last two
sentences on Schedule 2.11(d) and consisting solely of the costs and
expenses of (i) moving the facility, (ii) tenant improvements at a new location
and (iii) any Damages imposed by a Governmental Entity arising from such
disclosed circumstances.

In
addition to the foregoing, and notwithstanding any other provision of this
Agreement to the contrary, on the Closing Date Seller will repay the receivable
of Magnetek Italy in an amount (the “Euro Dollar Amount”)
calculated as set forth on Schedule 1.4.

1.5                                 Consideration;
Payments.

(a)                                Subject to the terms and conditions of this Agreement, the total
consideration (the “Purchase Price”) for the
purchase of the Acquired Shares and the Purchase Assets will be (a)
$71,700,000, plus the Euro Dollar Amount, plus or minus
the further adjustments at the Closing set forth in Section 1.6, minus
the Escrow Amount (such amount, after making such additions or subtractions,
the “Closing Payment”), and (b) the
assumption of the Assumed Liabilities.

(b)                                 The Closing Payment shall be paid by Buyer to
Seller in cash, by wire transfer of immediately available funds in U.S.
dollars, to an account designated by the Seller to the Buyer in writing at
least two Business Days in advance.

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(c)                                  The Purchase Price is based on the Balance
Sheet (as defined in Section 2.7(a)) and the principles, methods and
practices used by Seller in the preparation thereof. The Purchase Price is
subject to further adjustments pursuant to Section 1.7 after the
Closing.  For purposes of any
calculations made pursuant to Section 1.6 or 1.7
for amounts expressed in any currency other than U.S. Dollars, such
amounts shall be converted into U.S. dollars at the applicable foreign
currency-to-U.S. Dollar exchange rate (based upon the arithmetic average of the
closing exchange rates for the five (5) Business Days ending two (2) Business
Days prior to the Closing Date) as reported at www.oanda.com.

1.6                                 Adjustment to
Purchase Price at Closing.

(a)                                Initial Closing Balance Sheet.  For
purposes of determining the Closing Payment, Seller shall prepare and deliver
to Buyer, at least five (5) Business Days before the Closing Date, Seller’s
good faith best estimate of the combined unaudited balance sheet of the
Business as of the Closing Date (the “Initial Closing Balance
Sheet”) together with a schedule setting forth the Adjusted
Tangible Net Worth based on the Initial Closing Balance Sheet (the “Initial Adjusted Tangible Net Worth”)
and a schedule setting forth the Closing Net Indebtedness Amount based on the
Initial Closing Balance Sheet (the “Initial Closing Net Indebtedness Amount”).  The Initial Closing Balance Sheet and such
schedules shall be accompanied by reasonable supporting
documentation.  The Initial Closing
Balance Sheet shall fairly present Seller’s best estimate of the financial condition
of the Business (excluding the Retained Assets and the Indemnified Liabilities)
as of the Closing Date in accordance with GAAP, consistently applied in
accordance with those principles, methods and practices used in the preparation
of the Balance Sheet.

(b)                                 Right of Review. Buyer shall have the right to review the Initial Closing
Balance Sheet, such schedules and such supporting documentation or other
data as Buyer may reasonably request from Seller.  If Buyer does not agree with the Initial Closing
Balance Sheet, the Initial Adjusted Tangible Net Worth, or the Initial Closing
Net Indebtedness Amount, Buyer and Seller shall negotiate in good faith
to mutually agree on an acceptable Initial Closing Balance Sheet, the Initial Adjusted
Tangible Net Worth, or the Initial Closing Net Indebtedness Amount, and
the Seller shall consider in good faith any proposed comments or changes that
Buyer may reasonably suggest; provided, however, that the failure
to include in the Initial Closing Balance Sheet or the calculation of the Initial
Adjusted Tangible Net Worth or the Initial Closing Net Indebtedness Amount
any changes proposed by Buyer, or the acceptance by Buyer of any the foregoing,
shall not (i) limit or otherwise affect Buyer’s remedies under this Agreement,
including Buyer’s right to include such changes or other changes in the Final Closing Balance
Sheet, or (ii) constitute an acknowledgment by Buyer of the accuracy of
the Initial
Closing Balance Sheet or the Initial Adjusted Tangible Net Worth or the Initial
Closing Net Indebtedness Amount.

(c)                                  Purchase Price Adjustment. The Closing Payment and the Purchase Price
shall be increased or decreased by the amount (the “Initial
Net Worth Adjustment”)
by which the Initial Adjusted Tangible Net Worth exceeds (expressed as a positive
number) or is exceeded by (expressed as a negative number) $48,780,000 (the “Target”).  In addition, the Closing Payment and the
Purchase Price shall be decreased by the amount that the Initial Closing Net
Indebtedness Amount exceeds $16,676,000. 
There will be no change in the Closing Payment or Purchase Price if the
Initial Closing Net Indebtedness Amount is equal to or less than
$16,676,000.  The Target has been
calculated as set forth on Schedule 1.6(c).

1.7                                 Post-Closing Adjustment to Purchase Price.

(a)                                  Final Closing Balance Sheet. 
Within sixty (60) days after the Closing Date, Buyer, at Buyer’s
expense, shall prepare and deliver to Seller a combined unaudited balance sheet
of the Business as of the close of business on the Closing Date, including only
the Group Assets and the Group

 4
 

 

Liabilities and excluding
the Retained Assets and the Indemnified Liabilities (the “Final Closing Balance Sheet”),
together with a schedule setting forth the Adjusted Tangible Net Worth based on
the Final Closing Balance Sheet (the “Final Adjusted Tangible Net
Worth”) and a schedule setting forth the Closing Net
Indebtedness Amount based on the Final Closing Balance Sheet (the “Final Closing Net Indebtedness
Amount”).  The Final
Closing Balance Sheet shall fairly present the financial condition of the
Business (excluding the Retained Assets and the Indemnified Liabilities) as of
the Closing Date in accordance with GAAP, consistently applied in accordance
with those principles used in the preparation of the Balance Sheet, except that
it is agreed and acknowledged that the inventory reserve set forth on the Final
Closing Balance Sheet shall equal the inventory reserve set forth on the
Balance Sheet, other than reductions in the reserve that may have occurred
since the Balance Sheet date for the disposal of inventory to which the reserve
related as of the Balance Sheet date. 
The Final Closing Balance Sheet shall become final and binding according
to Section 1.7(b).  The sum of (i)
amount by which the Final Adjusted Tangible Net Worth exceeds (expressed as a
positive number) or is exceeded by (expressed as a negative number) the Initial
Adjusted Tangible Net Worth, minus (ii) the amount by which the Final
Closing Net Indebtedness Amount exceeds the greater of (1) the Initial Closing
Net Indebtedness Amount and (2) $16,676,000, shall be referred to as the “Purchase Price Adjustment.”

(b)                                 Disagreements as to Final Closing Balance
Sheet.  During the 30 days immediately following
Seller’s receipt of the Final Closing Balance Sheet, Seller shall be entitled
to review at its own expense the Final Closing Balance Sheet and Buyer’s
working papers relating to the Final Closing Balance Sheet, and Buyer shall
provide Seller reasonable access to its personnel, properties, books and
records to the extent relevant to such audit and/or review.  The Final Closing Balance Sheet shall become
final and binding upon the parties on the thirtieth day following delivery
thereof unless Seller gives written notice to Buyer of its disagreement with
the method of presentation of the Final Closing Balance Sheet (a “Notice of Disagreement”)
prior to such date.  Any Notice of
Disagreement shall specify in reasonable detail the nature of any disagreement
so asserted.  If a timely Notice of
Disagreement is received by Buyer with respect to the Final Closing Balance
Sheet, then the Final Closing Balance Sheet (as revised in accordance with clauses
(x) or (y) below), shall become final and binding upon the parties
on the earlier of (x) the date the parties hereto resolve in writing all
differences they have with respect to all matters specified in a Notice of
Disagreement or (y) the date all matters properly in dispute are finally
resolved in writing by the Accounting Firm (as defined below).  During the thirty (30) days immediately
following the delivery of any Notice of Disagreement, Seller and Buyer shall
seek in good faith to resolve in writing all differences which they may have
with respect to any matter specified in such Notice of Disagreement.  During such period, Seller and Buyer shall each
have reasonable access to the other party’s working papers relating to such
party’s preparation or review of the Final Closing Balance Sheet or the Notice
of Disagreement, as applicable.  At the
end of such 30-day period, Seller and Buyer shall submit to an independent
accounting firm (the “Accounting
Firm”) for review and resolution of any and all matters which
remain in dispute and which were properly included in any Notice of
Disagreement, and the Accounting Firm shall reach a final, binding resolution
of all matters which remain in dispute. 
The Final Closing Balance Sheet, with such adjustments necessary to
reflect the Accounting Firm’s resolution of the matters in dispute, shall
become final and binding on Buyer and Seller on the date the Accounting Firm
delivers its final resolution to the parties. 
The Accounting Firm shall be PricewaterhouseCoopers, or if such firm is
unable or unwilling to act, such other nationally recognized independent public
accounting firm as shall be agreed upon by the parties hereto in writing within
10 Business Days of the end of such 30-day period; provided that if they
cannot so agree, then each of the Buyer and the Seller shall select one
accounting firm within such 10 Business Day period, and both accounting firms
so selected shall then choose a third accounting firm (which shall be
independent from both Buyer and Seller) within 10 Business Days, which shall
then be the Accounting Firm for purposes of this Section.  The Accounting Firm’s sole authority will be
to resolve amounts in disagreement related to the Final Closing Balance Sheet,
and the Accounting Firm will have no authority over any other disagreement
(including but not limited to questions of law, interpretation of contract, and

 5
 

 

fraud). The Accounting Firm
shall be instructed to provide a written report of its findings and
determination to Buyer and Seller within 30 days of its appointment. The fees
and expenses of the Accounting Firm in connection with the procedures
contemplated pursuant to this Section 1.7(b) shall be borne 50% by Buyer
and 50% by Seller.

(c)                                  Purchase Price Adjustment. 
Based on the Final Closing Balance Sheet and the Purchase Price
Adjustment as determined under subsections (a) and (b) above, the
Purchase Price will be adjusted as provided herein.  In the event that a timely Notice of
Disagreement has been given, the Purchase Price Adjustment shall be calculated
(x) by the parties pursuant to the resolution in writing of any differences
between them, or (y) by the Accounting Firm, in writing, as part of its final
resolution of disputes.  In the event
that no Notice of Disagreement has been given, the Purchase Price Adjustment
will be calculated by Buyer and delivered to Seller within three (3) Business
Days following the date on which the Final Closing Balance Sheet becomes final
and binding.  The Purchase Price
Adjustment shall represent an increase (if a positive number) or decrease (if a
negative number) in the Purchase Price. 
In the event the Purchase Price Adjustment is a positive number, then
Buyer shall pay to Seller (as additional Purchase Price) an amount equal to the
Purchase Price Adjustment plus an additional amount equal to interest thereon
calculated at the Applicable Rate for the period from (and including) the
Closing Date to (but not including) the date such payment is made (the “Interest Period”),
and in the event the Purchase Price Adjustment is a negative number, then
Seller shall pay to Buyer (as a refund of Purchase Price) an amount equal to
the Purchase Price Adjustment (expressed as if a positive number) plus an
additional amount equal to interest thereon calculated at the Applicable Rate
for the Interest Period.  Within three
(3) Business Days following determination of the Purchase Price Adjustment,
such payment shall be made in cash, via wire transfer to an account designated
in writing at least 48 hours in advance by the party to receive such payment,
by Buyer or Seller, as the case may be, to the other party.

1.8                                 Closing.  The consummation of the
purchase and sale of the Acquired Shares and the Purchase Assets (the “Closing”) provided
for in this Agreement will take place at the offices of counsel to Seller at
333 S. Grand Avenue, 47th Floor, Los Angeles, California 90071 at 9:00 a.m. on
(i) the third Business Day following the date on which all conditions to
Closing specified in Article V of this Agreement (except for the
conditions that will only be satisfied on the Closing Date) have been satisfied
or waived, or (ii) at such other time and place as the parties may agree in
writing (the “Closing
Date”).  Subject to the
provisions of Section 6.1, failure to consummate the Acquisition
provided for in this Agreement on the date and time and at the place determined
pursuant to this Section 1.8 alone will not result in the termination of
this Agreement and will not relieve any party of any obligation under this
Agreement.  Once consummated, the Closing
shall be deemed effective at 12:01 a.m. on the day of the Closing.

1.9                                 Closing Deliveries.

(a)                                  Seller Deliveries.  At
the Closing, Seller will deliver to Buyer:

(i)
                                  a certificate or certificates representing
the Acquired Shares, duly endorsed (or accompanied by duly executed stock
powers or the equivalent under foreign Legal Requirements) by Seller for
transfer to Buyer;

(ii)
                               certificates from appropriate authorities as
to the good standing (or equivalent status under foreign Legal Requirements) of
Magnetek Italy in Italy and each jurisdiction in which Magnetek Italy is
qualified to do business as a foreign corporation, each dated not earlier than
thirty (30) days prior to the Closing Date;

(iii)
                            a cross-receipt for receipt of the Purchase
Price signed by Seller;

 6
 

 

(iv)                            certificates from appropriate authorities as
to the good standing (or equivalent status under foreign Legal Requirements) of
each other Company in its jurisdiction of formation, each dated not earlier
than thirty (30) days prior to the Closing Date; provided, that with
respect to Magnetek China, such delivery shall be deemed satisfied upon
delivery of (1) a certified copy of Magnetek China’s current business license
with an annual inspection stamp thereon indicating that Magnetek China has
passed the latest annual inspection (2) a copy of the search result (dated not
earlier than thirty (30) days prior to the Closing Date) of the records of the
relevant office of the Administration for Industry and Commerce, which shall
indicate that Magnetek China remains duly registered as a wholly foreign owned
enterprise in China and remains a wholly-owned subsidiary of Seller, each as of
the date of the search, and (3) investment certificate or certificates issued
by Magnetek China representing all of its registered capital;

(v)                                 copies of minutes of the shareholders’
meetings of Magnetek Italy, duly recorded in Magnetek Italy’s relevant
corporate book, held pursuant to Section 5.2(g);

(vi)                              a Bill of Sale and Assumption Agreement in
substantially the form attached hereto as Exhibit A,
a Patent Assignment in substantially the form attached hereto as Exhibit B, and a Trademark Assignment
in substantially the form attached hereto as Exhibit C
(collectively, the “Ancillary Agreements”), each
duly executed by Seller, and all other assignments, endorsements and
instruments of transfer as shall be necessary or appropriate to carry out the
intent of this Agreement and as shall be sufficient to vest in Buyer all of
Seller’s right, title and interest in the Purchase Assets;

(vii)                           letters of resignation dated as of the
Closing and in substantially the form attached hereto as Exhibit D
from each director of each Company or evidence of prior termination of any such
directors;

(viii)
                     all original shareholders’ ledger and minute
books of the meetings of the board of directors and shareholders, and all other
corporate records of each Company and all of the Business Records of the Group
(provided that this obligation will be deemed satisfied to the extent
located at a facility of the Business at one of the Real Properties); and

(ix)
                             the additional documents described in Section
5.2 of this Agreement.

(b)                                 Buyer Closing Deliveries.  At
the Closing, Buyer will make the following deliveries:

(i)
                                  Buyer will deliver to Seller, by wire
transfer of immediately available funds in U.S. dollars to an account(s)
designated by Seller, the Closing Payment;

(ii)
                               Buyer will deliver to Seller a cross-receipt
for receipt of the Acquired Shares;

(iii)                               Buyer will execute and deliver the
instruments described in clause (vi) of Section 1.9(a) above, as
applicable;

(iv)                              Buyer will deliver to Seller a California
resale certificate, providing that the inventory held in Seller’s Chatsworth
facility is being purchased for resale, in form and substance reasonably
satisfactory to Seller; and

(v)
                              Buyer will deliver the additional documents
described in Section 5.3 of this Agreement.

 7
 

 

1.10                           Purchase Price Allocation.  Schedule
1.10 sets forth an initial allocation of the Purchase Price (to the extent
treated as purchase price paid for the Purchase Assets and Acquired Shares for
U.S. federal income tax purposes) as between the Purchase Assets, on the one
hand, and the Acquired Shares, on the other hand, subject to adjustment
pursuant to the next sentence.  Within 60
calendar days after the determination of the Final Closing Balance Sheet, the
Buyer will prepare and deliver to Seller a schedule setting forth a proposed
final allocation of the Purchase Price and the Assumed Liabilities (to the
extent taken into account as purchase price for U.S. federal income tax
purposes) among the Purchase Assets and the Acquired Shares.  During the 30 calendar days following such 60
calendar day period, Buyer and Seller will use their reasonable efforts to
collectively determine whether the Buyer’s proposed final allocation will be
used as the basis for an asset allocation for purposes of Section 1060 of the
Code and to determine if any adjustments are appropriate and, regardless, will
use reasonable efforts to allocate the Purchase Price and such Assumed
Liabilities among the Purchase Assets and the Acquired Shares in accordance
with Section 1060 of the Code.  If the
parties agree to an allocation within such 30-day period, such allocation will
be reflected on each party’s Form 8594, and each party will prepare and file
its respective federal, state and local Tax Returns, as applicable, consistent with
such allocation.  If the parties are
unable to agree to an allocation within such period, each party will prepare
and file its own Form 8594.  Whether or
not the parties agree upon an allocation, each party shall provide to the other
a copy of the Form 8594 that was actually filed by such other party for federal
income tax purposes with respect to the transaction described herein upon
request from the other party.  Similar
timing and procedures shall apply with respect to any Form 8883 to be filed in
connection with a Section 338 Election, except that the 60-day period
referred to above shall commence five calendar months following the month in
which the Closing occurs.  Regardless of
the foregoing, Buyer and Seller agree that neither the portion of the Purchase
Price allocable to the Purchase Assets nor the “fair market value” (determined
under the procedures specified in 16 CFR 801.10(c)(3)) of the Purchase Assets
is equal to, or in excess of, $56.7 million.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF SELLER

Except as set forth in the
disclosure schedule delivered by Seller to Buyer on the date of this Agreement
and attached hereto as Exhibit E
and incorporated herein (the “Disclosure Schedule”),
Seller represents and warrants to Buyer that the statements contained in this Article
II are true, correct and complete as of the date of this Agreement and as
of the Closing Date (or, if made as of a specified date, as of such date).

2.1                                 Organization. 
Each of Seller and Magnetek Italy is a corporation (or similar organization under foreign Legal
Requirements) duly organized, validly existing and in good standing (or
equivalent status under foreign Legal Requirements) under the laws of the
jurisdiction of its organization, and has the necessary corporate (or comparable
power under foreign Legal Requirements) power and authority to conduct its
business in the manner in which its business is currently being conducted and
to own or lease such of the Group Assets as it owns or leases.  Magnetek Italy is qualified to do business in
each jurisdiction listed on Schedule 2.1, and Magnetek Italy is
qualified and in good standing (or equivalent status under foreign Legal
Requirements) under the laws of each jurisdiction where the nature of its
business requires such qualification, except where the failure to so qualify
would not have a Material Adverse Effect. 
Seller is qualified and in good standing (or equivalent status under
foreign Legal Requirements) under the laws of each jurisdiction where the
nature of its business requires such qualification, except where the failure to
so qualify would not have a Material Adverse Effect.  There is no pending or threatened proceeding
for the dissolution or liquidation of Magnetek Italy.  No Company operates (nor has operated in the
past five years) under any name other than the respective names set forth in
their respective charter. Seller does not, with respect to the Business,
operate (and has not operated in the past five years) under any name other than
the name set forth in its charter

 8
 

 

2.2                                 Organizational
Documents.  Magnetek Italy has delivered to Buyer or its counsel complete and accurate copies of
the following: (a) the atto costitutivo
and statuto of Magnetek Italy, as
currently in effect, and (b) minutes and other records of the meetings and
other proceedings of the board of directors and shareholders of Magnetek
Italy.  Magnetek Italy is not in
violation of any provisions of its atto
costitutivo or statuto.

2.3                                 Subsidiaries; Ownership of Shares.

(a)                                  Schedule 2.3(a) sets forth, for
each Company (i) the jurisdiction of its incorporation or organization, (ii)
the number and type of authorized and outstanding equity securities or
registered capital of such Company and a list of the holders thereof, (iii) the
names of its officers and directors, and (iv) the jurisdiction in which it is
qualified or holds licenses to do business or otherwise conducts business.  Except for the Companies, Magnetek Italy does
not own or have any right or obligation to acquire, directly or through a Company,
any equity, participation, or ownership interest in any other Person or
otherwise Control any Person.  There is
no pending or threatened proceeding for the dissolution or liquidation of any
Company.

(b)                                 Each Company is duly organized, validly
existing and in good standing (or equivalent status under foreign Legal
Requirements) under the laws of the jurisdiction of its organization.  Each Company has the necessary corporate (or
comparable power under foreign Legal Requirements) power and authority to conduct
its business in the manner in which its business is currently being conducted
and to own or lease such of the Group Assets as it owns or leases.  Each Company is qualified to do business in
each jurisdiction where the nature of its business requires such qualification,
except where the failure to so qualify would not have a Material Adverse
Effect.  Seller has delivered to Buyer or
its counsel complete and accurate copies of the organizational documents of each
Company, as currently in effect, and has made available to Buyer the minutes of
the board of directors and shareholders of each Company.  No Company is in violation of any provisions
of its organizational documents.

(c)                                  Except as set forth in Schedule 2.3(c),
no Company is a general or limited partner of any general partnership, limited
partnership or other Person.

(d)                                 Seller is the sole record and beneficial
owner of the Acquired Shares, which represent all of the outstanding shares of
Magnetek Italy, and has no other equity, participation, or ownership interest
in Magnetek Italy or any right to acquire any of the foregoing.  Magnetek Italy or a Company is the sole
record and beneficial owner of all outstanding shares of capital stock or, as
the case may be, the entire registered capital, of each Company (collectively,
the “Company Shares”).  Except as set forth in Schedule 2.3(d),
the Acquired Shares and the Company Shares are not subject to any Encumbrance
or any rights of first refusal of any kind. 
Seller has good and valid title to and has the right to transfer and
sell the Acquired Shares to Buyer in accordance with the terms of this
Agreement.

2.4                                 Authority.  Seller has the corporate (or comparable power under foreign Legal
Requirements) power and authority to execute, deliver and perform its
obligations under this Agreement and each of the Transaction Documents required
to be delivered by it pursuant to the terms of this Agreement and to consummate
the transactions contemplated hereby and thereby.  The execution, delivery and performance of
this Agreement by Seller, and of the Transaction Documents it is party to, and
the consummation of the Acquisition and the transactions contemplated by this
Agreement and by the Transaction Documents it is party to, have been duly
authorized and approved by all necessary corporate action on the part of
Seller.  This Agreement and each of the
Transaction Documents that Seller is party to have been duly and validly
executed and delivered by such party and constitute the legal, valid and
binding obligation of such party, enforceable against such party in accordance
with their terms, subject to the effect, if any, of (a) applicable bankruptcy
and other similar laws affecting the rights of creditors

 9
 

 

generally and (b) rules of
law and equity governing specific performance, injunctive relief and other
equitable remedies.

2.5                                 Non-Contravention; Required Consents.  The
execution and delivery of this Agreement by Seller and of the Transaction
Documents it is party to do not, and the consummation by Seller of the Acquisition
and the transactions contemplated by this Agreement and the Transaction
Documents it is party to will not (a) conflict with or violate any provisions
of the Certificate of Incorporation or Bylaws (or similar governing documents)
of Seller or any Company; (b) violate any Legal Requirement applicable to
Seller or any Company; (c) result in a breach, cause a default under, or give
rise to a right of payment under or the right to terminate, amend, modify,
abandon or accelerate or increase obligations under (in any case with due
notice or lapse of time or both), any Material Contract; (d) result in the
imposition of any Encumbrance against any material Group Asset; or (e) require
any Approval, including any filings or notifications that may be required under
the HSR Act, except for the third party consents or notices set forth on Schedule
2.5 (the “Required Consents”).  No consent or approval of the stockholders of
Seller is required in connection with the transactions contemplated hereby.

2.6                                 Capitalization.

(a)                                  Schedule 2.6 sets forth the number of shares of capital
stock (or the total registered capital) of each Company authorized, issued and
outstanding as of the date hereof.  There are no options, warrants,
convertible securities, subscription rights, conversion rights, preemptive
rights, exchange rights, or other Contracts to which Seller or any Company is a
party relating to the issuance or sale
of any securities or other equity or ownership interest in any Company.  All of the outstanding shares of capital
stock and, where applicable, the registered capital of each Company are duly
authorized, validly issued, fully paid and nonassessable.

(b)                                 All of the shares of capital stock of the
Companies were issued in conformity with applicable Legal Requirements and
without violating any preemptive rights.  There are no voting agreements with respect
to any securities of any Company.

(c)
                               There are no obligations, contingent or
otherwise, of any Company to repurchase, redeem or otherwise acquire any shares
of capital stock or any of the registered capital of such Company or to provide
funds to or make any investment (in the form of a loan, capital contribution or
otherwise) in any other entity.  Any
shares of capital stock and any amount of registered capital of a Company that
were issued and reacquired by such Person were so reacquired (and, if reissued,
so reissued) in compliance with all applicable Legal Requirements, and no
Company has any outstanding Liability with respect thereto.  There are no accrued and unpaid dividends
with respect to any outstanding shares or registered capital of any Company.

2.7                                 Financial
Statements; Accounting Controls.

(a)                                  Attached hereto as Schedule 2.7(a)(1)
are complete copies of the unaudited consolidated balance sheet of the Group as
of July 2, 2006 (the “Balance Sheet”),
the unaudited consolidated balance sheet of the Group as of July 3, 2005, and
the unaudited consolidated statements of operations, stockholders’ equity and
cash flows of the Group for the fiscal years ended July 2, 2006, July 3, 2005
and June 27, 2004, together with notes thereto (collectively, the “Financial Statements”).
The material principles, methods and practices used by Seller in preparation of
the Balance Sheet are set forth on Schedule 2.7(a)(2).  Except as set forth therein or as disclosed
in Schedule 2.7(a)(2), the Financial Statements (1) were prepared in
accordance with GAAP consistently applied in accordance with past practice and
(2) present fairly the financial position of the Group as of the date thereof
and the results of its operations for the periods then ended in all material
respects.

 10
 

 

(b)                                 The inventories on the balance sheets
included within the Financial Statements were valued in accordance with GAAP
consistently applied in accordance with past practice and in accordance with
Seller’s inventory policy attached as Schedule 2.7(b).  All inventory classified as such in the
Balance Sheet which is on hand and all additions to inventory since the date of
the Balance Sheet consist of items of a quantity and quality usable or salable
in the ordinary course of the business consistent with past practice, subject
to any reserves set forth on the Final Closing Balance Sheet.

(c)                                  All accounts receivable reflected on the
Financial Statements and all accounts receivable to be reflected on the Final
Closing Balance Sheet arise from sales actually made in the ordinary course of
business consistent with past practice and are not subject to any dispute,
defense, setoff or similar claim.  No
further goods or services are required to be provided by the Seller or Company
to which any such account receivable is owing in order to entitle such Person
(or its assignee, as the case may be) to collect such account receivable in
full, and no receivable to be reflected on the Final Closing Balance Sheet will
be pledged or assigned to any Person other than Buyer.  Schedule 2.7(c) sets forth a list of
the accounts receivable of the Business as of the date set forth thereon,
showing the aging thereof.

(d)                                 The Group has no Liabilities (other than
Indemnified Liabilities), either direct or indirect, matured or unmatured, or
absolute, contingent or otherwise, except for (i) those Liabilities set forth
on the Balance Sheet, (ii) Liabilities arising in the ordinary course of business
consistent with past practices since the date of the Balance Sheet, (iii)
Liabilities incurred after the date hereof in compliance with this Agreement,
and (iv) Liabilities that are not in excess of $200,000, individually or in the
aggregate.

(e)                                  None of the Seller (with respect to the
Business) or any Company has identified or been made aware of (i) any
significant deficiency or material weakness in its system of internal
accounting controls, policies or procedures, (ii) any fraud, whether or not
material, that involves the management or other employees, contractors or
consultants who have a role in the preparation of financial statements or the
internal accounting controls utilized by it or (iii) any claim or allegation
regarding any of the foregoing.

(f)                                    The Group maintains records in reasonable detail to accurately and
fairly reflect the transactions involving the assets and liabilities of the
Business and to maintain
accountability therefor.

2.8                                 Absence of Changes.  Except
as contemplated by this Agreement, since the date of the Balance Sheet, Seller
and each Company have operated the Business and the Group only in the ordinary
and normal course, consistent with past practice, and since the date of the
Balance Sheet, neither Seller (with respect to the Business) nor any Company
has:

(a)                                  suffered any Material Adverse Effect;

(b)                                 incurred any material obligations or
Liabilities other than in the ordinary course consistent with past practices;

(c)                                  permitted or allowed any of the Group’s
material properties or assets to be mortgaged, pledged or subject to any
Encumbrance, except liens for Permitted Encumbrances;

(d)                                 entered into any Contract (including but not
limited to any Contract for the purchase, sale, transfer, license, lease, or
disposition of any assets), other than (i) the sale of inventory in the
ordinary course of business consistent with past practices, (ii) customer,
distributor or supplier agreements entered into in the ordinary course of
business consistent with past practices, and (iii)

 11
 

 

Contracts (other than those
described in the immediately preceding clause (ii)) providing for payments by
or to either Seller or Magnetek Italy in the aggregate of less than $100,000;

(e)                                  caused or experienced the acceleration,
termination, modification, or cancellation of any Material Contract, or
received written notice that any other Person intends to accelerate, terminate,
modify or cancel any Material Contract;

(f)                                    made or committed to any capital expenditure
(or series of related capital expenditures) for additions to property, plant or
equipment except for expenditures made in the ordinary course of business
consistent with past practices and involving no more than $50,000 individually
or $100,000 in the aggregate;

(g)                                 made any capital investment in, loan to or
acquisition of the securities, equity interests or assets of, any other Person;

(h)                                 granted any increase in compensation or
benefits of employees (including any increase pursuant to any new or presently
existing Employee Benefit Plan), or any increase in any such compensation
payable or to become payable to any officer or employee except in the ordinary
course of business consistent with past practices;

(i)                                     issued any securities or registered capital
of any Company or any right to acquire any securities or registered capital of
any Company;

(j)                                     waived any right of material value, or
initiated, settled or compromised any material claim;

(k)                                  engaged in channel loading (e.g. pre-selling
to customers or distributors) or otherwise accelerated sales or collections of
receivables (other than factoring of receivables), or delayed the payment of
payables (other than in the ordinary course of business consistent with past
practice).

(l)                                     made any capital contributions to any Company
to the extent such contributions reduced the outstanding Indebtedness of the
Group; or

(m)                               authorized, approved or committed to do any
of the foregoing.

2.9                                 Suppliers and
Customers.  Schedule 2.9 sets forth a list of each supplier to whom
the Group collectively made payments aggregating $100,000 or more (each, a “Key Supplier”) and each customer
(including distributors and resellers) from whom the Group collectively
received payments aggregating $1,000,000 or more (each, a “Key
Customer”), in each case for the fiscal year ended July 2, 2006,
together with a list of each sole source supplier to whom the Group
collectively made payments aggregating at least $50,000 during such fiscal year
(each, a “Key Sole Source Supplier”).  Schedule 2.9 shows, with respect to
each Key Customer, Key Supplier and Key Sole Source Supplier, the name and
dollar volume involved.  To the Seller’s
Knowledge, since January 1, 2005 no Key Supplier, Key Sole Source Supplier, or
Key Customer has given written notice to Seller or any Company of such Person’s
intention to terminate or substantially reduce the extent of its business
relationship with the Group.  Since
January 1, 2005, to the Knowledge of Seller, neither the Seller nor any Company
has experienced or been notified of any shortage in goods or services that are
material to the Business.

 12
 

 

2.10                           Intellectual Property.

(a)                                  Schedule 2.10(a) lists all United States or foreign patents,
applications for patent, copyright, mask work, trademark or service mark
registrations, domain name registrations, and applications for any such
registrations included in the Group Intellectual Property owned by Seller or
any of the Companies, indicating for each, the patent number, registration or
application number, filing jurisdiction, date of issue or filing, and current
owner of record (the “Group
Registered Intellectual Property”).  The Group Registered Intellectual Property is
owned exclusively by Seller and the Companies free and clear of all joint
ownership, assignments and Encumbrances (other than Permitted Encumbrances)
(except for any of the foregoing arising under any licenses or related
agreements that are disclosed on Schedule 2.13).  All of the issued Group Registered
Intellectual Property (i.e., excluding
any applications for patent or for registration of any copyright, mask work,
domain name, trademark or service mark) that have not expired are valid,
subsisting, have not expired and, except as noted on Schedule 2.10(a),
have not been abandoned (except that such representation and warranty as to
validity with respect to patents is to the Knowledge of Seller).  Seller has Made Available To Buyer true and
correct copies of each of the foregoing applications, registrations, filings,
and any unprivileged related correspondence in the possession of Seller or any
of the Companies.

(b)                                 Except as set forth on Schedule 2.10(b)(1),
(i) the Group is not misappropriating, infringing or violating, and has not
since January 1, 2004 misappropriated, infringed or violated, any mask works,
copyrights or trade secrets of any other Person or, to the Knowledge of Seller,
any other Intellectual Property Rights of any other Person and (ii) the Group
has not received any notice or claim alleging that the Group or the
Business infringes, misappropriates or otherwise violates the Intellectual
Property Rights of any other Person. Except as set forth on Schedule
2.10(b)(2), to the Knowledge of Seller, no third party currently is
infringing, violating, misappropriating, or has, since January 1, 2004,
infringed, misappropriated or violated, any rights in the Intellectual Property
Rights included in the Group Assets. Neither Seller nor any Company has entered
into any Contract granting any Person the right to bring infringement actions
with respect to, or otherwise to enforce, against third parties any of the
material Group Intellectual Property owned by or exclusively licensed to Seller
or any Company, other than such rights arising by operation of law under or as
a result of any exclusive license of any such Group Intellectual Property.

(c)                                  Seller and the Companies own or have valid
license rights to use all Intellectual Property Rights necessary for the Group
to conduct its Business as presently conducted, including without limitation
the right to make, have made, use, offer for sale, sell, import, reproduce,
create derivative works based on, translate, distribute, transmit, display,
perform, license, sublicense, assign, transfer, sell and otherwise exploit the
Products to the extent currently done by the Seller and the Companies in
conducting the Business, without any misappropriation, infringement, or
violation of any mask works, copyrights or trade secrets of any other Person
or, to the Knowledge of Seller, any other Intellectual Property Rights of any
other Person.

(d)                                 All Intellectual Property Rights in and to
all material inventions, know-how and works of authorship developed by
employees, consultants or independent contractors of the Business in the course
of their employment or engagement have been validly transferred and assigned by
such employees, consultants and independent contractors to Seller or a Company
by a written “work made for hire” or assignment agreement. Seller and the
Companies have taken reasonable steps (including entering into confidentiality
and nondisclosure agreements with employees, consultants and other Persons with
access to or knowledge of confidential and proprietary information of the
Business) to safeguard and maintain the secrecy and confidentiality of the
Group’s material confidential and proprietary information.

(e)                                  Except as provided in Schedule 2.10(e),
neither Seller nor any Company has transferred any ownership or joint ownership
of, or granted any exclusive license of, any material Group

 13
 

 

Intellectual Property to any
Person or authorized any Person to modify, improve or create derivative works
of any material Group Intellectual Property.

(f)                                    Except as provided in Schedule 2.10(f),
no Product or portion thereof constituting computer software and no other
computer software in which Seller or any of the Companies owns the Intellectual
Property Rights (“Proprietary Software”) has been or is being
distributed, in whole or in part, or was used, or is being used by Seller or
any Company in conjunction with any Public Software in a manner which would
require that source code for such Product or Proprietary Software be disclosed
or distributed under terms that permit disclosure of such source code in the
absence of a binding obligation of confidentiality. “Public
Software” means any software that is distributed as free
software, open source software (e.g., Linux) or under similar licensing or
distribution models, including but not limited to any software licensed or
distributed under the following: (i) GNU’s General Public License (GPL) or
Lesser/Library GPL (LGPL), (ii) the Artistic License (e.g., PERL), (iii) the
Mozilla Public License, (iv) the Netscape Public License, (v) the Sun Community
Source License (SCSL), (vi) the Sun Industry Standards License (SISL), (vii)
the BSD License, and (viii) the Apache License.

2.11                           Real Property; Title to Assets; Equipment.

(a)                                  Schedule 2.11(a) sets forth a complete list of all of the
real property owned by Seller (as it relates to the Business or the Group) or
any Company (the “Owned
Properties”).  Each of
Seller and each Company has good, valid and marketable title to each parcel of
Owned Property, free and clear of any Encumbrance (other than Permitted
Encumbrances).

(b)                                 Schedule 2.11(b) sets forth a complete list of (i) all of the
leases, subleases or other similar agreements (the “Leases”)
under which Seller (as it relates to the Business or the Group)or any Company
uses or occupies or has the right to use or occupy any real property (the “Leased Properties”
and, with the Owned Properties and the Ownership Rights (as defined below), the
“Real Properties”), and (ii) all
material licenses, easements, rights of way, access and other similar
arrangements under which Seller (as it relates to the Business or the Group) or
any Company otherwise uses or occupies or has the right to use or occupy any
real property (the “Ownership Rights”).  Seller and each Company is, and to Seller’s
Knowledge, all other parties under the Leases are in compliance in all material
respects with the terms of all Leases, and all such Leases are valid,
subsisting and in full force and effect, and free and clear of any Encumbrance
(other than Permitted Encumbrances). 
Seller has Made Available To Buyer true and correct copies of all
Ownership Rights.

(c)                                  The Purchase Assets constitute all of the
assets and properties reasonably required to conduct the US Business of Seller
in the manner in which and to the extent to which such Business was conducted
during the periods reflected in the Financial Statements and is currently being
conducted.  Seller does not provide any
material services to any Company, except as set forth on Schedule 2.11(c).

(d)                                 Except as set forth in Schedule 2.11(d),
the items of equipment, buildings, structures, improvements and other tangible
assets owned or leased by Seller (with respect to the Business) or owned or
leased by a Company are reasonably adequate for their current uses, are in good
condition and repair (ordinary wear and tear excepted), and, to the Knowledge
of Seller, are free from material defect.

(e)                                  Neither Seller nor any Company has received
written notice of any condemnation or eminent domain Legal Proceedings or
written notice of any threat thereof with respect to any interest in any of the
Real Properties and is not in negotiations with any Governmental Entity with
respect to

 14
 

 

condemnation of, or the
exercise by such Governmental Entity of the right of eminent domain in respect
of, any Real Properties.

(f)                                    Each Company has good and marketable title
to, or a valid leasehold interest in, all of the Group Assets that it owns or
leases, and has a valid right to use all other Group Assets that it uses, in
each case free and clear of all Encumbrances (other than Permitted
Encumbrances).  Schedule 2.11(f)
lists individually all fixed assets (within the meaning of GAAP) included in
the Group Assets having a book value greater than $1,000 indicating the cost,
accumulated book depreciation (if any) and the net book value of each such
fixed asset as of the date of such list.

(g)                                 Seller has good and marketable title to, or a
valid leasehold interest in, all of the Purchase Assets, in each case free and
clear of all Encumbrances (other than Permitted Encumbrances).

2.12                           Related Party Transactions. 
Except as disclosed in Schedule 2.12, no Person who is an officer
or director of Seller or any Company, or any Affiliate of Seller or any
Company, or any officer or director of any such Affiliate, or to the Knowledge
of Seller, any family member of any of the foregoing, (i) is an officer,
director or Affiliate of, or has any direct or indirect interest in, any Person
that purchases from or sells or furnishes to the Group, any goods or services,
or (ii) is a party to any Contract to which the Group is a party, except
insofar as is disclosed or reflected in the Financial Statements or in which
the amount involved is less than $60,000; provided, however, that
ownership of no more than one percent (1%) of the outstanding voting stock of a
publicly traded corporation shall not be deemed to be an “interest in any
Person” for purposes of this Section.

2.13                           Contracts.

(a)                                  Except as set forth in Schedule 2.13,
neither the Seller in respect of the Group or the Business, nor any of the
Companies is party to or bound by any Contract of any of the following types
(collectively, the “Material
Contracts”):

(i)                                     any Contract providing guaranty or
suretyship, providing for the issuance of letters of credit, or any pledge,
bond or similar arrangement given by or running to the account of a Company;

(ii)                                  any Contract relating to the purchase, lease,
license, maintenance, management, acquisition, sale, use, disposition or
furnishing of assets properties, goods, products, materials, supplies,
merchandise, machinery, equipment, parts or any other property or services,
excluding, however, (1) any purchase orders or other customer contracts entered
into in the ordinary course of business consistent with past practice, (2)
supplier or vendor contracts entered into in the ordinary course of business
consistent with past practice, and (3) any Contract not described in (1) or (2)
above that is made in the ordinary course of business consistent with past
practice that involves revenues or expenditures equal to or less than $25,000
in the aggregate;

(iii)                               any Contract obligating Seller or any Company
to refrain from (1) competing with or engaging in any business, or (2)
conducting the Business in any particular jurisdiction;

(iv)                              any employment or consulting Contract other
than employment or consulting Contracts that can be terminated without penalty,
severance, liability or premium upon notice of 90 days or less;

 15
 

 

(v)                                 any Contract relating to Indebtedness or
under which the Seller or any Company has created, incurred, assumed or
guaranteed (or may create, incur, assume or guarantee) Indebtedness or any
material Encumbrance;

(vi)                              any Contract set forth on Schedule 2.12;

(vii)                           any Contract (excluding any purchase orders)
with any Person set forth on Schedule 2.9;

(viii)                        any Contract involving annual payments to or
from the Seller (in respect of the Business) and the Companies, taken as a
whole, of more than $100,000;

(ix)                                any Contract (1) for the cleanup, abatement
or other actions in connection with any hazardous material, the remediation of
any existing environmental Liabilities, violation of any Environmental Laws or
relating to the performance of any environmental audit or study, or (2)
containing any undertaking, term or condition under which a seller under the
Contract assumes or agrees to perform, be responsible for, or indemnify the
buyer against, any of the buyer’s responsibilities under Waste Electrical and
Electronic Equipment regulations (e.g., Directive 2002/96/EC of the European
Parliament, amendments thereto, or any comparable national or regional
supplements or enabling legislation);

(x)                                   any Contract related to any material
Intellectual Property Rights or that is set forth on Schedule 2.13(e);

(xi)                                any instrument set forth on Schedule
2.11(b);

(xii)                             any Contract not listed above which is or
would reasonably be expected to be material to the Group;

(xiii)                          any Contract containing “non-cancelable
non-returnable” provisions relating to the ordering and purchasing of inventory
or materials of any nature in excess of $50,000;

(xiv)                         any Contract which transfers to a Key
Customer (either immediately, or upon the occurrence of events specified therein)
any Intellectual Property Rights necessary to manufacture a Group product, for
the purpose of enabling such Key Customer to take over such manufacture from
Seller or a Company, as the case may be;

(xv)                            any Contract concerning the establishment or
operation of a partnership, joint venture or other Person or any capital
investment in, loan to or acquisition of the securities, equity interests or
assets of, any Person or the acquisition of a business or Person; or

(xvi)                         any Contract with any union or any collective
bargaining agreement.

(b)                                 Each Material Contract, as amended to date,
has been Made Available To Buyer, is a bona fide, valid and binding obligation
of Seller or the Company party to such Contract, as applicable, is enforceable
against such party and, to the Knowledge of Seller, the other parties thereto,
in accordance with its terms, and does not violate in any material respect any
Legal Requirement applicable to Seller or any Company, as the case may be.  Neither Seller nor any Company that is party
to a Material Contract is in material default under any such Material Contract
nor has any event or omission occurred, which through the passage of time or
the giving of notice, or both, would constitute a material default thereunder
or cause the acceleration of any of Sellers’ or the Companies’ obligations
thereunder, and, to

 16
 

 

the Knowledge of Seller,
neither Seller nor any Company is alleged to be in breach or default in any
material respect thereunder.  Neither
Seller nor any Company has given written notice to any other Person that such
Person has breached, violated or defaulted in any material respect under any
Group Material Contract (which breach, violation or default has not been
resolved or cured).

(c)                                  The Material Contracts that are included within
the Assigned Contracts are denoted with an asterisk (*) on Schedule 2.13.

2.14                           Legal Proceedings. 
Except as set forth on Schedule 2.14(a), there are no material
Legal Proceedings pending, or to the Knowledge of Seller, threatened against
Seller (relating to the Group or the Business) or any Company. Furthermore, (a)
neither Seller (as relates to the Group or the Business) nor any Company is
subject to any judgment, decree, injunction or order of any Governmental
Entity, (b) no Legal Proceeding has been instituted against Seller or any
Company before any Governmental Entity by any Person seeking to restrain or
prohibit the execution and delivery of this Agreement or the consummation of
the transactions contemplated hereby, and (c) neither Seller nor any Company
has received any written notice of any investigation or review by any
Governmental Entity with respect to the Group and, to the Knowledge of Seller,
no investigation or review by any Governmental Entity with respect to the Group
is pending or threatened.  Neither Seller
(as relates to the Group or the Business) nor any Company has given written
notice threatening to initiate any Legal Proceeding against any Person.  Except as set forth on Schedule 2.14(b),
there are no Legal Proceedings related to the Group or the Business in which
Seller or any Company is plaintiff or claimant (the “Pending
Claims”).

2.15                           Governmental Authorizations; Legal
Compliance.

(a)                                  Seller and each Company has all material
Governmental Authorizations to enable it to conduct the Business in the manner
in which the Business is currently being conducted or has been conducted during
the period reflected in the Financial Statements, and Seller and each Company
is in compliance in all material respects with the terms and requirements of
such Governmental Authorizations.  Schedule
2.15(a) sets forth each such material Governmental Authorization.  Since January 1, 2004, neither Seller (as
relates to the Group or the Business) nor any Company has received any written
notice or other written communication from any Governmental Entity (i)
asserting any material violation of or failure to comply with any Legal
Requirement of any Governmental Authorization or (ii) notifying such party of
the revocation or withdrawal of any Governmental Authorization relating to the
Group.

(b)                                 Each of Seller (as relates to the Group or
the Business) and the Companies is in material compliance with all applicable
Legal Requirements.  None of Seller (as
it relates to the Business) nor any Company is subject to any material judicial
order, decree, decision, award, injunction, stipulation, holding, judgment or
writ that by its terms expressly applies to such Person.  Since January 1, 2004, neither Seller (as
relates to the Group and the Business) nor any Company has been cited, fined or
otherwise notified in writing of any failure to comply with any material Legal
Requirement and no Legal Proceeding with respect to any such violation is
pending or, to the Knowledge of Seller, threatened.

(c)                                  Since January 1, 2004, none of Seller or any
Company, or any director, officer, employee or shareholder thereof, nor, to the
Knowledge of Seller, any agent, representative, or any Person acting for or on
behalf of any of them, has directly or indirectly (i) made any contribution,
gift, bribe, rebate, payoff, influence payment, kickback, or other payment or
item of value to any Person, private or public, regardless of what form,
whether or not in money, property, or services (A) to obtain or pay for
favorable treatment or special concessions or to secure Contracts, or pay for
favorable treatment, special concessions or Contracts already obtained or (B)
in violation of any applicable Legal Requirement, or (ii) 

 17
 

 

established or maintained
any fund or asset that has not been recorded in the books and records of the
Group.

2.16                           Tax Matters.

(a)                                  Except as set forth on Schedule 2.16(a),
all Tax Returns required to be filed with any Governmental Entity by any
Company have been filed.  All Tax Returns
filed by or on behalf of any Company were, in all material respects, properly
and timely filed when due (taking into account extension of time validly
obtained), and in all material respects, accurately reflect the Taxes of such
Company for the periods covered thereby in all material respects.  Except as set forth on Schedule 2.16,
each Company has paid or has had paid on its behalf all Taxes required to have
been paid by such Company.

(b)                                 None of the Companies has executed any waiver
of any statute of limitations on or extending the period for the assessment or
collection of any tax that remains outstanding.

(c)                                  All jurisdictions where any Company was
required to or has filed income Tax Returns for which the applicable statute of
limitations applicable to the Taxes reportable on such Tax Returns remains open
are set forth on Schedule 2.16(c).

(d)                                 Except as set forth on Schedule 2.16(d),
no Tax deficiency or delinquency is being asserted in writing or, to the
Knowledge of Seller, threatened against any Company and no audit, action or
similar Legal Proceeding relating to Tax matters is pending or, to the
Knowledge of Seller, threatened by any Governmental Entity against any
Company.  No outstanding adjustment
relating to any Tax Return of any Company has been proposed in writing or, to
the Knowledge of the Company, otherwise, by any Governmental Entity.

(e)                                  Except as set forth on Schedule 2.16(e),
there are no Encumbrances for Taxes (except Encumbrances for current Taxes not
yet delinquent) upon any of the Group Assets or the Acquired Stock.

(f)                                    Seller or each Company has Made Available To
Buyer, copies of all Tax Returns filed by or on behalf of such Company for the
applicable statute of limitations applicable to the Taxes reported on such Tax
Returns remains open.

(g)
                              None of the Companies has assets that are
treated as “tax-exempt use property” for United States Tax purposes.

(h)                                 None of the Companies has (i) ever been
a party to any Tax sharing, indemnification, allocation or other similar
agreement that will remain in effect following the Closing, other than such
agreements with lessors regarding payment of property Taxes, vendors and
service providers regarding payment of sales/use Taxes and the like arising in
the ordinary course of business of the Companies (“Ordinary
Course Tax Agreements”), (ii) any liability for the Taxes
of any person (other than the Companies), under any provision of applicable
law, as a transferee or successor, by contract or agreement, or otherwise
(other than Ordinary Course Tax Agreements), (iii) ever been a party to any
joint venture, partnership or other arrangement that could be treated as a
partnership for Tax purposes that will continue following the Closing, or (iv)
is treated as other than an association taxable as a corporation for United
States federal income Tax purposes.

(i)                                     Neither Seller nor any of the Companies has
been deemed to be either a “distributing corporation” or a “controlled
corporation” in (i) a distribution of stock intended to qualify for tax-free
treatment under Section 355 of the Code in the two years prior to the date
of this Agreement

 18
 

 

or (ii) a distribution of
stock which would otherwise constitute part of a “plan” or “series of related
transactions” (within the meaning of Section 355(e) of the Code) in
conjunction with the Acquisition.

(j)                                     None of the Companies is subject to Tax in
any jurisdiction other than its place of incorporation or formation by virtue
of having a permanent establishment or other place of business or by virtue of
having a source of income in that jurisdiction. 
None of the Companies is liable for any Tax as the agent of any other
person or business nor constitutes a permanent establishment or other place of
business of any other person, business or enterprise for any Tax purposes.

(k)                                  None of the Companies will be required to
include any material income or gain or exclude any deduction or loss from
taxable income as a result of (i) any change in method of accounting,
closing agreement, deferred intercompany gain or excess loss account or any
similar provision under any applicable law arising prior to Closing,
(ii) installment sale or open transaction disposition consummated prior to
Closing or (iii) prepaid amount received prior to Closing, except in each
case to the extent the Tax liability from such event has been properly
reflected in the Financial Statements in accordance with GAAP.

2.17                           Employee Benefit Matters.

(a)                                  Schedule 2.17(a) sets forth a true and complete list of all
oral and written plans, trust agreements, Contracts, policies or arrangements
relating to any pension, thrift, savings, profit sharing, retirement, bonus,
incentive, medical, dental, death, accident, disability, stock purchase, stock
option, phantom stock or phantom stock option, stock appreciation, deferred
compensation, hospitalization, “parachute,” severance, vacation, sick leave or
personal leave or any other direct or indirect form of compensation maintained
by Seller and the Companies or to which Seller or any Company contributes, is
liable for, or may become liable for in the future, for the benefit of any
current or former Group Employee or independent contractor or consultant,
including all “employee benefit plans” (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”)), whether or
not subject to ERISA.  The items
described in the foregoing sentence are referred to collectively as “Employee Benefit Plans.”

(b)                                 True and correct copies of the written
Employee Benefit Plans, including all amendments thereto, along with a written
description of any Employee Benefit Plan that is not set forth in a written
document will be provided to Buyer at or before the Closing Date.  In addition, at or before the Closing Date,
Buyer will also be provided with the following documentation regarding any
Employee Benefit Plan maintained, contributed to or with respect to which, any
one or more of the Companies may now or in the future have any liability with
respect to (collectively, the “Company Benefit Plans”):
(i) the most recent annual actuarial valuation, if any, (ii) all Internal
Revenue Service or Department of Labor determination, opinion, notification and
advisory letters or similar correspondence from non-U.S. Governmental Entities,
(iii) the most recent annual report (including all schedules and financial statements
attached thereto), if any, (iv) all material correspondence to or from any
Governmental Entity received in the last three years, (v) any discrimination
tests for the most recent plan year, and (vi) all material written agreements
and contracts currently in effect, including (without limitation)
administrative service agreements, group annuity Contracts, and group insurance
Contracts.  No Employee Benefit Plan is a
“multiemployer plan” (as defined in Section 3(37) of ERISA), and Seller and the
Companies have not ever contributed or been obligated to contribute to any
multiemployer plan.  Except as set forth
on Schedule 2.17(b), no Employee Benefit Plan is an “employee pension
benefit plan” (as defined in Section 3(2) of ERISA) subject to the provisions
of Title IV of ERISA, nor has Seller (in any capacity which could result in
Liability to Buyer) nor any Company ever contributed or been obligated to
contribute to any such employee pension benefit plan.  Except as set forth on Schedule 2.17(b),
no Employee Benefit Plan is (i) a plan described in Section 413 of the Code,
(ii) a plan subject to the minimum funding

 19
 

 

standards of Section 412 of
the Code or Section 302 of ERISA, or (iii) a defined-benefit pension plan
maintained outside of the U.S. (other than plans sponsored by a Governmental
Entity), nor has Seller (in respect of the Business or in any other capacity
which could result in Liability to Buyer) or any Company ever contributed or
been obligated to contribute to any such plans. 
Schedule 2.17(b) contains a list of each defined-benefit pension
plan or similar plan maintained outside of the U.S. by (i) any one or more of
the Companies or (ii) the Seller (but only with respect to any Seller plans
that could result in Liability to Buyer), other than any such plans that are
required to be maintained by Seller or one or more of the Companies under the
applicable Legal Requirements, and for each such plan listed on Schedule
2.17(b), sets forth the plan’s “projected benefit obligation” and fair
value of plan assets (each, calculated in accordance with GAAP) as of July 2,
2006.  Except as set forth on Schedule
2.17(b), Seller and the Companies have complied with, and each Employee
Benefit Plan conforms in form and operation to, all applicable Laws, including,
but not limited, to ERISA and the “Prohibited Transactions” rules thereunder,
and those provisions of the Code or similar non-U.S. Law, with which compliance
is required to obtain any intended favorable Tax treatment, in all material
respects.  All contributions required to
be made with respect to any Employee Benefit Plan have been made.

(c)                                  There are no actions, suits or claims pending
(other than routine claims for benefits) or, to Seller’s Knowledge, threatened
with respect to any Employee Benefit Plan or against the assets of any Employee
Benefit Plan.  Except as set forth in Schedule
2.17(c), each Employee Benefit Plan is in compliance with any legally
applicable minimum funding standard.

(d)                                 Except as provided on Schedule 2.17(d),
no Employee Benefit Plan provides, or reflects or represents any Liability to
provide, benefits (including, without limitation, death or medical benefits),
whether or not insured, with respect to any former or current employee, or any
spouse or dependent of any such employee, beyond the employee’s retirement or
other termination of employment, other than any such benefits required to be
provided under applicable Law.

(e)                                  Except as set forth on Schedule 2.17(e),
as of the Closing Date, no Group Employee will be a “disqualified individual”
within the meaning of Section 280G of the Code and the regulations
thereunder.  The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement (alone or together with any other event which, standing alone, would
not by itself trigger such entitlement or acceleration) will not (1) entitle
any Group Employee to any payment, forgiveness of indebtedness, vesting,
distribution, or increase in benefits under or with respect to any Employee
Benefit Plan or (2) solely with respect to the Companies, otherwise trigger any
acceleration (of vesting, funding or payment of benefits or otherwise) under or
with respect to any Company Benefit Plan.

2.18                           Environmental
Matters.

(a)                                  Compliance.  Seller (in respect of the US
Business) and each Company are in compliance with all applicable Environmental
Laws.  Since January 1, 2004, neither
Seller nor any Company has received any written notice or other communication
from a Governmental Entity or any other Person that alleges that the Business
is not in compliance with any Environmental Law.

(b)                                 Claims.  There is no Environmental
Claim pending or, to the Knowledge of the Seller, threatened against (i) Seller
or any Company with respect to the Business or (ii) any Person whose Liability
for any Environmental Claim the Seller or any Company has or may have retained
or assumed either contractually or by operation of law.

(c)                                  Hazardous Materials. 
Neither Seller or any Company nor, to the Knowledge of Seller, any other
Person, has treated, stored, disposed of, arranged for the disposal of,
transported to, or Released in reportable quantities any Hazardous Materials
from, on, at or under any Real Property, or, to

 20
 

 

the Knowledge of the Seller,
any property formerly owned or occupied by the Business, or any third party
location to which Hazardous Materials were sent, or caused to be sent, from a
Real Property except (A) in compliance with applicable Environmental Laws, and
(B) in a manner that has not resulted in and is not reasonably likely to result
in an Environmental Claim or required remediation under any Environmental Law.

(d)                                 Reports.  The Seller and the Companies
have provided to Buyer copies of all material written environmental reports,
assessments, audits or investigations in their possession or control relating
to the Real Properties.

2.19                           Labor Relations.

(a)                                  Employees.  Schedule 2.19(a)(1) includes a complete and correct list, as of the date
hereof, of all Group Employees as well as all independent contractors and
consultants of the Seller (as it relates to the Group or the Business) or a
Company. Opposite the name of each individual on Schedule 2.19(a)(1) is
(i) solely with respect to each Group Employee in the United States, a notation
classifying each as regular employee, leased employee, temporary employee,
part-time employee, independent contractor or consultant; (ii) such person’s
current compensation rate; (iii) such individual’s employer, (iv) the current
accrual of vacation pay for each such individual; and (v) to the extent
allowable by applicable law, a notation as to whether such individual is a
member of a union related to the Business and, if a member of a union, the name
of the union to which they are a member. 
No bonus, severance or other payments or benefits of any kind are due to
any Group Employee, consultant or independent contractor as a result of the
transactions contemplated by this Agreement. To the Knowledge of the Seller,
all Group Employees (other than leased employees, temporary employees, and part-time
employees) that were hired to devote all or substantially all of their business
time to the conduct of the Business are so devoting all or substantially all of
their business time to the conduct of the Business.  Except as set forth on Schedule 2.19(a)(2),
no Group Employee is on leave for any reason. 
All Group Employees, consultants and independent contractors are
properly classified in accordance with applicable Legal Requirements and have
had appropriate withholdings from income reported and severance indemnity
amounts accrued as required by applicable Legal Requirements.  To the Knowledge of the Seller, no Group
Employee with the title of manager or higher, or with a position comparable
thereto, has, within the past 3 months, expressed an intent to terminate his or
her employment within the next 3 months. 
Except as set forth on Schedule 2.19(a)(2)(3), neither Seller nor
any Company has, within the past 3 months, terminated or given notice of
termination to any Group Employee with a title of manager or higher, or with a
position comparable thereto.

(b)                                 Labor Relations. 
Except as set forth in Schedule 2.19(b), (i) no collective
bargaining agent has been certified as a representative of any of the Group
Employees, (ii) there is no request before Seller or any Company for union
representation with respect to any Group Employee, and there are no pending
labor negotiations with respect to the Group or the Business, and (iii) to the
Knowledge of Seller, no organizing activity or representation campaign or election
is now in progress with respect to any Group Employee. There are no unfair
labor practice complaints, or to the Knowledge of Seller, threatened, relating
to or affecting the Group or the Business, except as would not reasonably be
expected to result in any material liability. 
Since June 30, 2004, there has not been any material labor strike, labor
slowdown, work stoppage, labor picketing or lockout involving employees of the
Group or the Business.

(c)                                  Complaints.  Except as set forth in Schedule
2.19(c), (i) there are no Legal Proceedings, pending or, to the Knowledge
of Seller, threatened, (ii) there have been no written
claims given to Seller or any Company since January 1, 2006, and (iii) there are no internal
investigations currently pending, in any case regarding harassment, discrimination, wages, hours, equal opportunity,

 21
 

 

occupational safety and
health, or the payment of social security and other taxes, in any case relating
to or affecting the Group or the Business. Seller (as relates to the Group or
the Business) and each Company have complied with all applicable Legal
Requirements relating to the hiring and retention of all Group Employees
relating to wages, hours, equal opportunity, collective bargaining, immigration
and naturalization, the payment of social security and other taxes, and any
other employment-related Legal Requirements.

(d)                                 Compensation. 
Neither Seller nor any Company is delinquent in any payment to any Group
Employee for any wages, salaries, commissions, bonuses or other direct
compensation for any services performed by them or amounts required to be
reimbursed to such employees including but not limited to amounts for regular
time and overtime and compensatory time. Any accruals for incentive bonuses to
Group Employees for the current fiscal year are accurately reflected on the
Balance Sheet.

2.20                           Product Warranty
and Product Liability.

(a)                                  Schedule 2.20(a) lists the standard forms of terms and
conditions regarding Warranties that have not lapsed or expired.  No Product has been manufactured, leased or
sold by or on behalf of Seller or any Company with any Warranty that is
materially less favorable to Seller or any Company than the terms and
conditions described on Schedule 2.20(a).

(b)                                 Schedule 2.20(b) describes in reasonable detail all Product
recalls since January 1, 2004. No recall or post-sale notice or warning is
pending or, to the Knowledge of Seller, threatened in connection with any
Product and, to the Knowledge of Seller, no basis exists for any such recall,
notice or warning.

(c)                                  Each Product is free of any design defect
(including bugs, errors, viruses, “Trojan horses” or other disabling software
code) or failure to warn and complies in all material respects with all
applicable (i) Legal Requirement and (ii) binding customer-mandated
specifications and Contract commitments therefor as agreed to and accepted by
Seller or any Company (including but not limited to those customer-mandated
specifications or requirements that explicitly require or specify that a
Product be designed, developed, manufactured, or sold in compliance with the
Restriction of Hazardous Substances Directive (RoHS) 2002/95/EC (the “RoHS Directive”).  Schedule 2.20(c) lists, to the
Knowledge of Seller, any claims for any injury, damage, loss or failure arising
in connection with a Product that, since January 1, 2004, have been alleged in
writing in amounts exceeding $100,000, other than claims arising solely out of
any warranty.

(d)                                 Except as set forth on Schedule 2.20(d),
there are no pending material disputes with respect to the Warranties.

(e)                                  Except as set forth on Schedule 2.20(e),
(i) no aggregate returns of any Product during any 12-month period since
January 1, 2004 have exceeded 1% of the aggregate unit sales of such Product
during such 12-month period, (ii) to the Knowledge of the Seller, no customer
of the Business experienced failures or serious product performance defects in
greater than 1% of the units purchased by such customer during any 12-month
period since January 1, 2004, (iii) to the Knowledge of the Seller, there has
been no Liability as a result of, or based upon or arising from or out of, or
in connection with any injury to any individual or property as a result of the
ownership, possession or use of the Products, and (iv) to the Knowledge of
Seller, there have been no investigations by any Governmental Entity into any
defects or alleged defects of the Products. 
To the Knowledge of the Seller, none of the foregoing has occurred with
respect to components, products, parts or other supplies provided to the Group
by suppliers of the Business.

 22

 

(f)                                    Except as set forth in Schedule 2.20(f), or
unless otherwise directed by customer specifications, contractual
understandings or customer acknowledgements regarding the acceptability to said
customer of RoHS Directive non-compliance for a particular product, each
product of the Business for which development commenced after January 1, 2006
has been designed and developed to be compliant with the RoHS Directive, as of
the time when such product is or will be released for production and offered
for sale.

2.21                           Brokers.  Except for commissions, fees
and costs payable to Stephens Inc. in connection with the Acquisition (which
commissions, fees and costs shall be borne exclusively by Seller), no broker,
finder or investment banker is entitled to any brokerage, finder’s or other
cost, fee or commission in connection with the Acquisition based upon
arrangements made by or on behalf of Seller or any Company.  Notwithstanding anything to the contrary
contained in this Agreement, Seller is not responsible for any fees or costs
incurred by Buyer in obtaining financing in connection with the Acquisition,
including any financing fees and costs payable by Buyer to Stephens Inc. (which
fees and costs shall be borne exclusively by Buyer).

2.22                           Insurance.  Schedule 2.22 lists all insurance
policies relating primarily to the Group (the “Insurance Policies”). 
Neither Seller nor any Company is in material default under any
Insurance Policy, and none has received any notice or other indication from any
insurer or agent of any intent to cancel or not renew any of such Insurance
Policy.

2.23                           Bank Accounts;
Powers of Attorney.  Schedule 2.23 sets forth
a true and complete list of all bank accounts, safe deposit boxes and lock
boxes of the Group, including, with respect to each such account and lock box,
the names in which such accounts or boxes are held and identification of all
Persons authorized to draw thereon or have access thereto.  Schedule 2.23 also sets forth the name
of each Person holding a general or special power of attorney from the Group
and a description of the terms of such power.

2.24                           Sarbanes Oxley
Certifications.  Each Company has executed and
delivered to Seller a compliance checklist in the form attached hereto as Schedule
2.24(a) in connection with the Sarbanes-Oxley Act for each fiscal quarter
of Seller during the past three fiscal years. 
Attached hereto as Schedule 2.24(b) is a list of each signatory
to each such executed checklist. 
Attached hereto as Schedule 2.24(c) is a list of all exceptions
identified in each such executed checklist. 
Seller hereby confirms that the certifications contained in its filings
under the Securities Exchange Act of 1934, as amended, pursuant to Sections
302, 404 and 906 of the Sarbanes-Oxley Act, are true and correct as of the date
hereof.  None of Seller (in respect of
the Business) or any Company has identified or been made aware of (i) any
significant deficiency or material weakness in its system of internal
accounting controls, policies or procedures, (ii) any fraud, whether or not
material, that involves the management or other employees, contractors or
consultants who have a role in the preparation of financial statements or the
internal accounting controls utilized by it or (iii) to the Knowledge or
Seller, any claim or allegation regarding any of the foregoing.

2.25                           Export Control. 
Seller (in respect of the Business) and each Company has complied in all
material respects with the export control laws of the United States, including
but not limited to the export control laws administered by the Bureau of
Industry and Security of the U.S. Department of Commerce and the International
Traffic in Arms Regulations administered by the U.S. Department of State, with
respect to the export of goods, services and technology from the United States
and the re-export of U.S. origin goods, services and technology from third
countries, as well as with the export control laws of any other jurisdiction,
to the extent such U.S. and other laws were or are applicable to the Seller (in
respect of the Business or the Group) and each of the Companies.  The Group has no Liability for material
non-compliance with Legal Requirements imposing economic sanctions upon
countries, Governmental

 23
 

 

Entities or other Persons,
including, without limitation, any Legal Requirement administered by the U.S.
Department of the Treasury’s Office of Foreign Assets Control.

2.26                           HSR Act; Turnover in Italy.  The
Companies (a) do not, in the aggregate, hold assets located in the United
States with a fair market value of $56.7 million or more and (b) did not, in
the aggregate, make sales in or into the United States of $56.7 million or more
in the most recent fiscal year, as calculated under the rules and regulations
of the HSR Act. Seller’s aggregate turnover in Italy did not exceed Euro
40,000,000 for its fiscal year ending July 2, 2006.

2.27                           Disclaimer of Representations and Warranties. 
EXCEPT AS EXPRESSLY SET FORTH HEREIN, SELLER DOES NOT MAKE, AND SELLER
EXPRESSLY DISCLAIMS, ANY REPRESENTATION OR WARRANTY, WHETHER EXPRESS OR
IMPLIED, AND WHETHER BY COMMON LAW, STATUTE, FOREIGN LAW OR OTHERWISE,
REGARDING ANY EXPECTED YIELD OR RETURN FROM ANY INVESTMENT HEREUNDER, INCLUDING
THE QUALITY, CONDITION, OR OPERABILITY OF THE BUSINESS, THE GROUP, THE ACQUIRED
SHARES, THE PURCHASE ASSETS OR THE GROUP ASSETS, INCLUDING, WITHOUT LIMITATION,
ANY BUSINESS, ASSETS, IMPROVEMENTS, PERSONAL PROPERTY, EQUIPMENT, OR FIXTURES
OF THE PURCHASE ASSETS OR GROUP ASSETS.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and
warrants to Seller that the statements contained in this Article III are
true, correct and complete as of the date of this Agreement (or, if made as of
a specified date, as of such date).

3.1                                 Due Organization.                                                Buyer is a corporation duly organized, validly
existing and in good standing under the laws of State of Delaware and has the
necessary corporate power and authority to own or lease its properties and
conduct its business as currently conducted.

3.2                                 Authority; Binding
Nature.  Buyer has the corporate power and authority to execute, deliver and perform
its obligations under this Agreement and each of the Transaction Documents
required to be delivered by Buyer pursuant to the terms of this Agreement and
to consummate the transactions contemplated hereby and thereby.  The execution, delivery and performance of
this Agreement by Buyer and the Transaction Documents to which Buyer is a
party, and the consummation of the Acquisition and the transactions
contemplated by this Agreement and the Transaction Documents to which Buyer is
a party, have been duly authorized and approved by all necessary corporate
action on the part of Buyer.  This
Agreement and the Transaction Documents to which Buyer is a party have been
duly and validly executed and delivered by Buyer and constitute the legal,
valid and binding obligations of Buyer, enforceable against it in accordance
with their terms, subject to the effect, if any, of (a) applicable bankruptcy
and other similar laws affecting the rights of creditors generally and (b)
rules of law and equity governing specific performance, injunctive relief and
other equitable remedies.

3.3                                 Non-Contravention;
Consents.  The execution and delivery of this Agreement by Buyer and each of the
Transaction Documents to which Buyer is a party, and the consummation of the
Acquisition and the transactions contemplated by this Agreement and the
Transaction Documents to which Buyer is a party, will not (a) conflict with or
violate any provisions of the Certificate of Incorporation or Bylaws (or
similar governing documents) of Buyer, (b) violate any Legal Requirement
applicable to Buyer; or (c) require any Approval, except for (i) any filings or
notifications that may be required under the HSR Act or the competition law of
any applicable jurisdiction and (ii) third party Approvals set forth on Schedule
3.3.

 24
 

 

3.4                                 Brokers.  Except for commissions, fees and costs
payable to Needham & Company in connection with the Acquisition (which
commissions, fees and costs shall be borne exclusively by Buyer), no broker,
finder or investment banker is entitled to any brokerage, finder’s or other
cost, fee or commission in connection with the Acquisition based upon
arrangements made by or on behalf of Buyer. 
Buyer is responsible for all fees or costs incurred by Buyer in connection
with obtaining financing for the Acquisition, including any fees or costs
payable by Buyer to Stephens Inc. (which fees and costs shall be borne
exclusively by Buyer).

3.5                                 Litigation.  There is no litigation pending
or threatened in writing against Buyer in any court or any proceeding before
any Governmental Entity that would prevent or materially hinder the
consummation of the Transactions by Buyer.

3.6                                 Sufficient Funds. 
Immediately prior to the Closing Buyer will have sufficient funds to
enable Buyer to pay the Closing Payment and all other fees and expenses payable
by it at the Closing related to the Acquisition.

3.7                                 Turnover in Italy. 
Buyer’s aggregate turnover in Italy did not exceed Euro 100,000,000 for
its fiscal year ending December 31, 2005.

3.8                                 Acknowledgment Regarding Transaction. 
Buyer represents that in making the decision to enter into this
Agreement, it has relied solely on its own independent investigation, the
express, representations, warranties, and covenants set forth in this Agreement,
and Buyer’s own assessment of the past, current, and future business
requirements of the Group.  Accordingly,
Buyer acknowledges, represents and warrants that, except as expressly set forth
in this Agreement, neither Seller nor any Company nor any Representative has
made, and Buyer has not relied upon, any representations and warranties of any
nature whatsoever.  Specifically (but without limitation) Buyer
acknowledges that Seller makes no representation or warranty with respect to
any projections or forecasts Made Available To Buyer or any of its Representatives.

ARTICLE IV

CERTAIN COVENANTS OF THE PARTIES

4.1                                 Access to
Information.  During the period from the date of this Agreement through the Closing
Date, Seller shall, and shall cause the Companies and their respective
Representatives to, provide Buyer and Buyer’s Representatives with reasonable
access to Representatives of such party, and to all personnel, properties,
Contracts, assets, Business Records, Tax Returns, work papers and other documents
and information relating to the Group or the Business.  Following the Closing, Buyer and Seller agree
to use commercially reasonable efforts to promptly furnish to the other party
information in its possession to enable the other party to properly prepare
financial statements and tax and other documents required to be filed with any
Governmental Entity, regulatory authority or stock exchange.  Buyer will maintain copies of all material
Business Records of the Group delivered to Buyer at the Closing (which shall be
deemed to include such records as are at offices of any Company as of the
Closing), in particular those pertaining to Taxes, for such period as is
consistent with Buyer’s record-retention policies and practices (but in any
event, with respect to Taxes, for the period specified in Section 4.9(a))
and will permit the Seller to have reasonable access (at Seller’s expense)
thereto to enable Seller to prepare financial statements or Tax Returns or
defend any Tax Proceedings.

4.2                                 Operation of the
Group.  Except as contemplated or permitted by this Agreement, or approved in writing
by Buyer, and save as otherwise required by applicable Legal Requirements, at
all times from and after the date of this Agreement until the Closing Date,
Seller will conduct, and shall cause the Companies to conduct, the operations
of the Group in the ordinary course consistent with past

 25
 

 

practices and will use
commercially reasonable efforts to preserve intact the Group’s business
organization, to keep available the services of the Group’s current officers
and employees, to maintain insurance with respect to the Business consistent
with past practice and to preserve the goodwill of and maintain satisfactory
relationships with those Persons and entities having business relationships
with the Group. Without limiting the generality of the foregoing, at all times
from and after the date of this Agreement until the Closing Date, Seller shall
not, and shall not permit any Company to (without Buyer’s prior written
consent, which consent will not be unreasonably withheld or delayed):

(a)                                  sell, dispose of, grant, assign, lease, or
transfer an interest in any Group Asset (including Real Property and Group
Intellectual Property), or subject any Group Asset (including Real Property and
Group Intellectual Property) to any Encumbrance, other than (i) a Permitted
Encumbrance, (ii) non-exclusive licenses of Group Intellectual Property in the
ordinary course of business consistent with past practice, and (iii) inventory in the ordinary course of business consistent with past practice;

(b)
                              acquire or purchase assets, properties or
rights (other than inventory in the ordinary
course of business consistent
with past practice) with a book or fair market value in excess of $50,000
individually or in the aggregate;

(c)                                  amend or terminate any Material Contract, or
enter into any new Contract that would be a Material Contract if it had been
effect on the date hereof, except for purchase orders in the ordinary course of business consistent with past practice; provided
that without limiting the foregoing, in no event shall the Company enter into
any real property lease;

(d)                                 adopt, or amend or modify in an material respect, an
Employee Benefit Plan, or make any material change with respect to the
compensation or other benefits payable to any Group Employee except, in each
case, in the ordinary course of business consistent with past practice;

(e)                                  terminate, amend, or fail to renew any
material Governmental Authorization;

(f)                                    materially change the nature or operation of
the Business;

(g)                                 grant, issue, or sell any securities of any
Company or any option, warrant or other right to acquire any securities of any
Company;

(h)                                 engage in channel loading (e.g. pre-selling
to customers or distributors) or otherwise accelerate sales or collections of
receivables (but excluding factoring of receivables), or delay the payment of
payables (other than in the ordinary course of business consistent with past
practice);

(i)                                     incur any Liabilities other than in the ordinary course of business consistent with past practice;

(j)                                     initiate, settle or compromise any material
Legal Proceeding or waive or compromise any material right, claim or debt
(including account receivables), other than any Pending Claim if such waiver,
settlement or compromise does not impose any injunction, order or other
equitable remedy on the Business or any Company;

(k)                                  fire any Group Employee with the title of
manager or higher, or with a position comparable thereto, or otherwise
materially decrease the workforce of the Business;

(l)                                     hire any Group Employee with the title of
manager or higher, or with a position comparable thereto, or otherwise
materially increase the workforce of the Business;

 26
 

 

(m)                             incur any Indebtedness except under existing
credit facilities as currently in effect, or guaranty any obligation of any
Person other than a Company;

(n)                                 make any capital contributions to any Company
if such contributions have the effect of reducing the outstanding Indebtedness
of the Group;

(o)                                 take any action that could reasonably be
expected to cause the conditions set forth in Article V not to be
satisfied as of the Closing Date; or

(p)                                 authorize, agree to or commit to any of the
foregoing.

4.3                                 No Solicitation.  Prior
to the Closing or termination of this Agreement, Seller will not, directly or
indirectly, and will not authorize, encourage, permit or instruct any of its
Representatives or any of the Companies to, directly or indirectly:

(a)                                  solicit, initiate or encourage the making,
submission or announcement of, or take any action that could reasonably be
expected to lead to any proposal by a third party (other than Buyer) to
directly or indirectly (i) acquire the Group, the Business or any material
portion thereof through a merger or consolidation or otherwise, (ii) acquire a
material portion of the Group Assets, (iii) acquire any shares of Magnetek
Italy or any Company; or (iv) engage in any other transaction designed to
acquire the Group or the Business (each, an “Acquisition Proposal”);

(b)                                 participate in any discussions or
negotiations or provide any information regarding any Acquisition Proposal by
any Person; or

(c)                                  authorize, approve, adopt, execute, enter
into or become bound by any letter of intent or other Contract or understanding
that is related to or provides for any Acquisition Proposal.

Seller shall, and shall cause its Representatives and the Companies to,
immediately discontinue and not resume or otherwise continue any discussions
with respect to any Acquisition Proposal (other than with the Buyer and its
Representatives).  Seller agrees to
promptly inform Buyer of the nature and terms and offeror of any proposal or
inquiry received by Seller or by any Company or any Representative of any of
them regarding any Acquisition Proposal.

4.4                                 Confidentiality. 
Subject to any obligation to comply with (a) any Legal Requirement, (b)
any rule or regulation of any Governmental Entity, (c) obligations under any
listing agreement with or rules of any security exchange applicable to Buyer
(including financial reporting obligations), or (d) any subpoena or other legal
process to make information available to the Persons entitled thereto, whether
or not the transactions contemplated hereby are consummated, all non-public
information obtained by any party about any other party, and all of the terms
and conditions of this Agreement, shall be kept in confidence by each party,
and each party shall cause its Representatives to hold such information
confidential.  Each party shall maintain
such confidentiality to the same degree as it maintains its own confidential
information until such time, if any, as any such data or information either is,
or becomes, published or a matter of public knowledge; provided, however, that the foregoing will
not apply to any information received by a party from a third party not under
any obligation to keep such information confidential, nor to any information
obtained by a party that is generally known to the public, nor to any
disclosure by any party to its Representatives. 
If this Agreement is terminated for any reason, each party must return
or cause to be returned to the other, or certify as to the destruction of, all
written data, information, files, records and copies of documents, worksheets
and other materials obtained by that party in connection herewith, except as
required by applicable Legal Requirements. 
The provisions of this Section 4.4 shall supersede the
obligations of the parties pursuant to the confidentiality agreement, dated

 27
 

 

February 8, 2006, between
Buyer and Seller (through Stephens Inc., as representative of Seller).  Notwithstanding any provision of this Section
4.4, from and after the Closing, neither this Section nor the
Confidentiality Agreement shall apply to or restrict in any manner (i) Buyer’s
use or disclosure of any such information relating to the Group or the Business
(ii) Seller’s use or disclosure of any such information as permitted under Section
4.11(b), or (iii) the inclusion of such confidential information in a court
filing in connection with the prosecution or defense of any Pending Claim so
long as such filing is maintained under court-ordered seal.  Except for the foregoing, Seller shall keep
strictly confidential all confidential or proprietary information relating to
the Purchase Assets and the Business, except as otherwise agreed by Buyer or as
permitted in clauses (a), (b), (c) or (d) of this Section
4.4 or as necessary to perform its obligations under this Agreement
(including under Article VII).

4.5                                 Filings; Consents.

(a)                                  Seller and Buyer will: (i) promptly make and
effect all registrations, filings and submissions required to be made or
effected by them under the HSR Act and other applicable Legal Requirements with
respect to this Agreement and the transactions contemplated under this
Agreement; and (ii) use reasonable efforts to cause to be taken on a timely
basis, all other actions necessary or appropriate for the purpose of
consummating and effectuating the Acquisition, including the obtaining before
the Closing of all necessary Approvals from third parties including, without
limitation, all Required Consents (notwithstanding that fewer than all Required
Consents are set forth on Schedule 5.2(d)).  Buyer will reasonably cooperate in efforts to
obtain such consents, waivers and approvals.

(b)                                 Seller shall (and shall cause the Companies
to) and Buyer shall (i) promptly provide all information requested by any
Governmental Entity in connection with this Agreement or the Acquisition, and
(ii) promptly take, and cause its Representatives to take, all actions and
steps reasonably necessary to obtain (1) any merger or other competition or
regulatory notification required by law or any Governmental Entity and (2) any
antitrust or similar clearance or approval required by applicable Legal
Requirements, if any, on terms reasonably satisfactory to Buyer and Seller.

(c)                                  Seller and Buyer shall: (i) give the other
party prompt notice of the commencement of any investigation, action or Legal
Proceeding by or before any Governmental Entity with respect to this Agreement
or the Acquisition, (ii) keep the other party informed as to the status of any
such investigation, action or Legal Proceeding, and (iii) promptly inform the
other party of any communication to or from the Federal Trade Commission, the
Antitrust Group of the Department of Justice or any other Governmental Entity
regarding this Agreement or the Acquisition. The parties agree to use their
reasonable efforts to defend any Legal Proceedings challenging this Agreement
or the consummation of the transactions contemplated hereby, including seeking
to have any stay or temporary restraining order entered by any court or other
Governmental Entity vacated or reversed.

4.6                                 Further Assurances. 
Subject to the terms and conditions of this Agreement, each of the
parties agrees to use commercially reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary, proper
or advisable under applicable Legal Requirements to cause the conditions
precedent set forth in Article V to be satisfied and to consummate and
make effective the Acquisition.  The
parties shall from time to time after the Closing, at the request of the other
and without further consideration, execute and deliver further instruments and
documents as may be reasonably necessary to effectuate the provisions hereof,
including such instruments of transfer and assignment and take such other
action as Buyer may reasonably require to more effectively transfer and assign
to Buyer the Acquired Shares and the Purchase Assets.

4.7                                 Public Disclosure. 
Buyer and Seller shall
consult with each other before issuing, and give each other a reasonable
opportunity to review and comment upon, any press release or other public

 28
 

 

statements with respect to
the Acquisition and shall not issue any such press release or make any such
public statement prior to such consultation, except as may be required by
applicable Legal Requirements or obligations under any listing agreement with
any securities exchange, in which case the disclosing party shall use its
commercially reasonable efforts to limit the disclosure and to provide a copy
of the disclosure to the other party in advance of such disclosure and to
confer with such other party with respect thereto.  The parties agree that the initial press
release to be issued with respect to the Acquisition will be in a form agreed
upon by the parties.

4.8                                 Notification of
Certain Matters; Effect of Notification. 
Between the date hereof and the Closing, each party (as such, the “Disclosing Party”) shall give prompt notice to the other party
of the discovery by the Disclosing Party of (a) any material inaccuracy in any
representation or warranty of the Disclosing Party, (b) any material failure by
the Disclosing Party to comply with any of such party’s covenants contained in
this Agreement, or (c) the occurrence of any event or the existence of any
circumstances that would make satisfaction of any of the conditions to the
other party’s obligation to consummate the Closing set forth in Article V
impossible or unlikely.  Regardless of
the foregoing and regardless of Section 4.1, all information or
knowledge obtained by either party under Article IV is informational
only and shall not in any manner constitute or cause a waiver by such party of
any of the conditions precedent to the Closing hereunder or an amendment to any
representation, warranty or covenant contained herein, unless they are
incorporated into this Agreement by a written amendment signed by the parties
hereto or as otherwise provided in Section 4.17.  After the Closing, Seller shall hold in trust
for the Buyer and promptly deliver to Buyer all payments received by Seller
with respect to the Purchase Assets or the Business, and shall use its
commercially reasonable efforts to promptly deliver to Buyer all mail, faxes,
e-mails, deliveries and correspondence received by Seller with respect to the
Purchase Assets or the Business.

4.9                                 Tax Returns.

(a)                                  Cooperation as to Tax Matters.  From
and after the Closing, Seller and Buyer will cooperate with each other in
connection with the preparation and filing of all Tax Returns required to be
filed by the Companies and Seller with respect to taxable periods ending on or
before the Closing Date, and for periods beginning before and ending after the
Closing Date (“Straddle Period”), and in the
conduct of any audit, examination of other proceeding with respect to Taxes (“Tax Proceedings”).  Seller shall control any and all Tax
Proceedings pertaining to the Companies for all periods ending on or before the
Closing Date.  With respect to any
Straddle Period, the party that owned (directly or indirectly) the Company for
the greatest number of days during such Straddle Period shall control the Tax
Proceedings with respect to such Straddle Period.  Buyer shall control all other Tax
Proceedings.  Buyer may assume control
over any Tax Proceedings that otherwise would be controlled by Seller if Seller
fails, upon written request from Buyer, to (i) affirm its obligation to
indemnify Buyer for pre-Closing Taxes arising from such Tax Proceeding, to the
extent such Taxes are within the indemnification obligations of Seller pursuant
to this Agreement, and (ii) demonstrate to Buyer’s reasonable satisfaction that
it has the wherewithal to satisfy such indemnification obligation (and if
Seller fails to satisfy clause (i) or (ii) and Buyer assumes control over a Tax
Proceeding, Seller shall reimburse Buyer for its reasonable out-of-pocket costs
incurred as a result of assuming such control). 
The party in control of a Tax Proceeding shall keep the other party
informed and cooperate with such other party with respect thereto if such other
party could be adversely affected thereby. 
Notwithstanding the foregoing, if the results of a Tax Proceeding
controlled by either party could reasonably be expected to have a material
adverse effect on the other party, then there shall be no settlement or closing
or other agreement with respect thereto without the consent of the other party,
which consent shall not be unreasonably withheld or delayed.  Furthermore, if the results of a Tax
Proceeding controlled either party could reasonably be expected to have a
material adverse effect on the other party, then at the request of the party
not in control of such Tax Proceeding, such party shall be given reasonable
notice of and an opportunity to participate at its expense in any

 29
 

 

meetings or telephone calls
with Tax authorities pertaining to such Tax Proceeding, and shall be given a
reasonable opportunity to review and provide input on material correspondence
submitted to such Tax authority prior to submission thereof to such Tax
authority.  Each party shall reasonably
promptly provide to the other party notice of any Tax Proceeding with respect
to Taxes for which such other party could be liable as well as copies of all
written correspondence with the Tax authority with respect thereto.  Buyer shall
retain in its possession or cause the Companies to retain in their possession,
and shall provide Seller reasonable access to (including the right to make copies
of), such Business Records and any other materials that Seller may reasonably
specify with respect to matters relating to Taxes for any taxable period ending
on or prior to or which includes the Closing Date until the expiration of the
relevant statute of limitations.  After
such time, Buyer may dispose of such material unless Seller has made a request
therefor.

(b)                                 Preparation of Tax Returns.  From
and after the Closing, Buyer shall prepare or cause to be prepared all Tax
Returns for the Companies for all periods required to be filed following the Closing
Date, including such Tax Returns for periods ending on or prior to the Closing
Date and for the Straddle Period.  All
Tax Returns described in this Section 4.9(b), with respect to periods
ending prior to the Closing Date, shall be prepared in a manner consistent with
past practices, unless such past practices are not in accordance with
applicable law.  With respect to each income
Tax Return or other material Tax Return described in Section 4.9(b),
Buyer will provide to Seller a draft of such Tax Return at least thirty (30) Business Days prior to the filing date (taking into account extensions of time to
file).  Seller shall be provided an
opportunity to review such Tax Returns and all supporting workpapers, schedules
and information, and to propose changes, not later than fifteen (15) Business
Days prior to the filing date of such Tax Returns.  If Seller fails to propose changes to Buyer
with respect to such Tax Returns before five (5) Business Days prior to filing
date of such Tax Returns, Seller shall be deemed to have approved such Tax
Returns. Seller and Buyer shall attempt
in good faith mutually to resolve any disagreements regarding Tax Returns
described in Section 4.9(b) prior to the due date for filing
thereof.  If the parties are unable to
resolve such dispute within such fifteen (15) day period, the dispute shall be resolved by independent
accountants acceptable to the Buyer and Seller, and the filing date shall be
extended to the extent any such extension is available under applicable
law.  The independent accountants shall
finally and conclusively resolve any dispute relating to matters set forth in
this Section 4.9(b) within thirty (30) days of receipt of the submission.  The
independent accountants shall determine, only with respect to the specific
disagreements submitted in writing by Seller and Buyer, the manner in which
such item or items in dispute should be resolved; provided, however,
that the dollar amount of any such item or items shall be determined within the
range of dollar amounts proposed by Seller and Buyer.  Any finding by the independent accountants
shall be a reasoned award stating the findings of fact and conclusions of law
(if any) on which it is based, shall be final and binding upon the parties
absent manifest error and shall be the sole and exclusive remedy between the
parties regarding the disputed items so presented.  The fees and expenses of the independent
accountants shall be shared 50% by Buyer and 50% by Seller, unless the
independent account determines that based on the positions taken by the parties
another method for allocating its fees and expenses would be more equitable,
and the parties shall otherwise bear their own expenses incurred in any dispute
resolution pursuant to this Section 4.9(a).

(c)                                  Payment of Taxes.  Seller shall pay all
Taxes with respect to any taxable periods ending prior to the Closing Date
unless and to the extent such Taxes appear as an accrual on the Final Closing
Balance Sheet, in which case Buyer shall be responsible entirely for and shall
promptly pay any such Taxes up to the amount of such accrual.  Taxes
attributable to Straddle Periods (including any Taxes resulting from a Tax
audit or administrative or court proceeding) shall be apportioned to the period
ending on the Closing Date and to the period beginning on the day after the
Closing Date by means of a closing of the books and records of the Companies as
of the close of business on the Closing Date and, to the extent not susceptible
to such allocation, by apportionment on the basis of elapsed days.  Seller shall pay that portion of such
Straddle Period Taxes attributable to the portion of the Straddle Period ending
on the

 30
 

 

Closing Date, other than (i)
such Taxes that arise on the Closing Date outside of the ordinary course of
business of the Companies and at the request of Buyer, and (ii) Taxes that appear as
an accrual on the Final Closing Balance Sheet, in which case Buyer shall be
responsible entirely for and shall promptly pay any such Taxes up to the amount
of such accrual.  Taxes that are the
responsibility of Seller shall be paid by Seller to Buyer no later than three
(3) days before the later of (i) the date such Taxes are payable by the Companies,
or (ii) written notice from Buyer as to the amount due from Seller, and shall
be paid by Buyer to the applicable Tax authority promptly following receipt
from Seller except to the extent such Taxes already were paid by Buyer.  Notwithstanding
the foregoing, (i) Seller’s liability for any Taxes with respect to periods
ending prior to the Closing Date, and with respect to Taxes for the pre-Closing
portion of any Straddle Period, shall be reduced as provided in Section
7.3(d); and (ii) Seller shall not be liable for any penalties or interest attributable to
(A) the late payment of Taxes if Seller pays such Taxes within the time periods
specified in this Section 4.9(c), or (B) the late filing of Tax Returns
or late payments of Taxes resulting from a failure of Buyer to follow the
procedures specified in Section 4.9(b) with respect to the related Tax
Return.

(d)
                              Amended Tax Returns.  Neither Buyer nor Seller nor any of their respective
Affiliates or successors shall (or shall cause or permit the Companies to)
amend, refile or otherwise modify any Tax Return relating in whole or in part
to the Companies with respect to any taxable year or period ending on or before
or including the Closing Date, without the prior written consent of the Seller,
or Buyer, as applicable, not to be unreasonably withheld or delayed.

(e)                                  Refunds or Credits of
Taxes.  Any refunds or credits of Taxes of
the Companies paid with respect to periods ending before the Closing Date that
are not otherwise accrued as assets on the Final Closing Balance Sheet shall be
for the account of Seller and shall be promptly paid to Seller upon
receipt.  Any refunds or credits of Taxes
of the Companies paid with respect to any Straddle Period shall be apportioned
to the period ending on the Closing Date and to the period beginning on the day
after the Closing Date by means of a closing of the books and records of the
Companies as of the close of business on the Closing Date, and Buyer will
promptly remit to Seller the portion due to it. 
Buyer and Seller shall cooperate to effect the purposes of the foregoing
provisions.

(f)                                    Buyer shall have the right to cause the
Companies to make an election under Section 338 with respect to the Companies,
provided that no such election shall be made unless (i) Buyer notifies Seller
of such election on or prior to June 30, 2007, and (ii) Buyer makes such an
election for all of the Companies. 
Except as otherwise required by law, Buyer shall not make or permit to
be made any other election with respect to the Companies that would increase
the liability of Seller for Taxes under Section 4.9(c) above the
liability that would have been incurred by Seller but for such election.

(g)                                 In the event of an inconsistency between the
provisions of this Section 4.9 and the provisions of Article VII
(other than Sections 7.3(d) and 7.3(e)), this Section 4.9
shall control, and in no event shall any indemnification for Taxes under Section
4.9(c) be subject to the limitations of Section 7.3(a), Section
7.3(b) or Section 7.3(c).  The
obligations of the parties set forth in this Section 4.9 shall remain in effect
until the expiration of the applicable statute of limitations, including any
extensions of the statute, plus 60 days.

4.10                           Expenses.

(a)                                  Each party will pay the out-of-pocket fees, expenses
and disbursements it incurs in connection with the execution, delivery and
performance of this Agreement and the transactions contemplated by the
Agreement, except that Seller shall bear all such out-of-pocket fees and
expenses incurred by the Companies before the Closing.  Buyer and Seller shall share equally all of
the filing fees in connection with any filings required under the HSR Act or
other competition or investment laws, if

 31
 

 

any.  Except as aforesaid or in Section 4.10(b),
the parties shall pay their own fees and expenses incurred in connection with
the Acquisition.

(b)                                 All sales and use, stamp, documentary,
filing, recording, transfer, real estate transfer, stock transfer, gross
receipts, registration, duty, securities, transactions or similar fees or Taxes
(together with any interest or penalty, addition to tax or additional amount
imposed), if any, due under applicable laws as a result of the purchase and
sale of the Purchase Assets and the Acquired Shares (collectively, “Transfer Taxes”) shall be borne 50%
by Seller and 50% by Buyer, until the aggregate of such Transfer Taxes paid by
each party is $200,000 ($400,000 total), and thereafter shall be borne by
Seller.  The parties shall cooperate and
use reasonable efforts to pay any such Taxes, and file any such forms or
reports related thereto, in a timely manner. 
The fees and expenses incurred by Seller and the Companies in connection
with the completion of the audit contemplated by Section 5.2(j) shall be borne
50% by Seller and 50% by Buyer, until the aggregate of such fees and expenses
paid by each party is $50,000 ($100,000 total), and thereafter shall be borne
by Seller.

4.11                           Pending Litigation.  From
and after the Closing:

(a)                                  Payments. Any monetary Damages awarded to a Company after the final resolution
of any Pending Claim, after deducting therefrom all Damages reasonably incurred
by Buyer, the Companies, or their Affiliates in connection with the
prosecution, defense, settlement, or final judgment of the Pending Claims or
any counterclaims arising in connection therewith, will be paid over to Seller
promptly after receipt thereof by Buyer or such Company, and will be considered
Retained Assets for purposes of this Agreement.

(b)                                 Cooperation.  At Seller’s expense (limited,
however, to Buyer’s reasonable out-of-pocket expenditures), Buyer shall
reasonably cooperate with Seller in Seller’s defense and prosecution of the
Pending Claims and will provide or make available to Seller, during normal
business hours, with reasonable prior notice, in a manner so as not to
interfere with the normal operations of Buyer and the Companies, subject to
customary confidentiality obligations reasonably satisfactory to Buyer, (i) any
Business Records existing as of the Closing to the extent related to the
Pending Claims, subject to execution and delivery to Buyer by Seller of a
reasonable and appropriate confidentiality agreement, and (ii) such employees
of the Companies employed by the Business as of the Closing who have material
information related to the Pending Claims. At Seller’s expense (limited,
however, to Buyer’s reasonable out-of-pocket expenditures), Buyer shall make
reasonably available to Seller with reasonable prior notice, in a manner so as
not to interfere with the normal operations of Buyer and the Companies, subject
to customary confidentiality obligations reasonably satisfactory to Buyer, the
individuals set forth on Schedule 4.11(b) (collectively, the “Key Witnesses”) to
testify as witnesses in the Pending Litigation (with all of Buyer’s reasonable
out-of-pocket expenditures in connection therewith to be borne by Seller).  Buyer will have the right to receive from
Seller copies of all pleadings, notices and communications with respect to the
Pending Claims, shall have the right to participate in, but not control (except
as otherwise provided herein), settlement negotiations with respect to the
Pending Claims, and shall otherwise be entitled to receive from Seller such
information related to the Pending Claims as it may reasonable request.  Seller shall coordinate all requests under this
Section 4.11(b) only through Buyer’s General Counsel.

4.12                           [Intentionally Omitted]

4.13                           Limitations.

(a)                                  From and after the
Closing, Seller agrees not to
directly or indirectly use (or permit, agree to or cause any Person to use) for
commercial purposes the name of any product of the

 32
 

 

Business, or any variation
thereof, or any trade name, trade mark, service mark, slogan, logo or like
property of the Buyer other than “Magnetek”. Buyer will change the legal name
of each Company as soon as reasonably practical after the Closing so as not to
contain the name “Magnetek”. Except as provided in the preceding sentence, from
and after the Closing, Buyer agrees not to use, and to cause the Companies not
to use, the name “Magnetek” and related trade names, trade marks, service marks
and corporate names incorporating “Magnetek” and the stylized “Magnetek” logos;
provided, however, Buyer may continue to use such names, marks
and logos (i) in displays, signage and postings for a period of not more than
four (4) months after the Closing Date or such shorter time as may be required
to permit the reasonably prompt removal of such name and logos, but only to the
extent such displays, signage or postings exist on the Closing Date; (ii) for a
period of six (6) months after the Closing Date, to state the Companies’ former
affiliation with Seller (e.g., “formerly a division of Magnetek, Inc.”); and
(iii) to the extent any such trade names, trade marks, service marks or logos
appear on stationary, packaging materials, or supplies on hand as of the
Closing Date or on order at the time of the Closing, until such is exhausted; provided,
however, that in respect of all such items in this clause (iii),
such continued use will cease on the first anniversary of the Closing Date.
Regardless, the preceding sentence shall not apply with respect to, or limit in
any way the disposition of (including by incorporation of components in a
Product) inventory of the Business existing as of the Closing, except
that Buyer shall use its commercially reasonable efforts to deplete first any
such inventory that contains external markings with any such trade names, trade
marks, service marks or logos.

(b)                                 For a period of three (3) years after the
Closing Date (the “Restriction
Period”), Seller will not (and will not permit, agree to or
cause any Controlled Affiliate to), directly or indirectly, whether for its own
benefit or as an owner, proprietor, shareholder, partner, employee, officer,
director, advisor, creditor, or otherwise as agent for another, engage in any
Competing Business.  “Competing Business” means
designing, manufacturing, developing, marketing, promoting, distributing or
selling (i) digital or analog power electronic products for use in AC/DC or
Board Mounted DC/DC embedded power supplies, railway applications, streetlight
monitoring systems, or consumer products, including but not limited to washing
machines, heating, ventilating and air-conditioning products (HVAC),
refrigerators and high-powered tools, anywhere in the world or (ii) alternative energy power
conversion products under 10 kW anywhere in the world.

(c)                                  Regardless of Section 4.13(b), Seller may engage in a Competing Business
after the Closing only if such Competing Business is acquired by Seller after
the Closing as part of the acquisition of a larger business by Seller if (i)
the total revenues from the Competing Business so acquired by Seller in each of
the two fiscal years immediately prior to the closing of such acquisition are
less than 10% of the total revenues attributable to the larger business so
acquired in each such fiscal year and (ii) Seller uses reasonable efforts to
exit such acquired Competing Business as soon as commercially practicable
following the closing of such acquisition of such Competing Business and, in connection
therewith, in good faith reasonably provides Buyer with the first opportunity
to negotiate in good-faith for the purchase of such Competing Business.

(d)                                 To protect Buyer against interference with
the Business, for a period of three (3) years after the Closing Date, Seller
will not (and will not permit, agree to or cause any Controlled Affiliate to),
directly or indirectly, whether for its own benefit or as an owner, proprietor,
shareholder, partner, employee, officer, director, advisor, creditor, or
otherwise as agent for another, (i) divert or attempt to divert from the
Business any Competing Business of any customer, supplier, or business partner
of the Business or (ii) solicit the employment or consulting services of any
employee or consultant of the Business. 
Nothing herein shall be deemed to prevent Seller from hiring any Person
solely in response to the general announcement, advertisement or solicitation
of an employment opportunity that are not specifically targeted to the
Business, Buyer, or any Company.

 33
 

 

(e)                                  The parties agree that a breach of any
covenant set forth in this Section
would cause irreparable harm to Buyer, that Buyer’s remedies at law upon any
such breach would be inadequate, and that, accordingly, to the extent such a
remedy is available under applicable law, upon any such breach a restraining
order or injunction or both may be issued, in addition to any other rights and
remedies which are available to Buyer. 
The parties agree that the restrictions set forth in this Section are reasonable and appropriate
but that if a court of competent jurisdiction finds this Section more restrictive than
permitted by applicable Legal Requirements of any jurisdiction in which Buyer
seeks enforcement hereof, this Section
will be limited to the extent required to permit enforcement under such Legal
Requirements. In particular, the parties intend that the covenants contained in
this Section will be construed
as a series of separate covenants, including one for each county in each state
in each country. Except for geographic coverage, each such separate covenant
will be deemed identical in terms. If, in any judicial proceeding, a court
refuses to enforce any of the separate covenants deemed included in this Section, then only such unenforceable
covenant will be deemed eliminated from these provisions for the purpose of
those proceedings to the extent necessary to permit the remaining separate
covenants to be enforced.  In addition,
if a court refuses to enforce any of the covenants throughout the full length
of the Restriction Period, the parties agree that the Restriction Period will
be deemed amended to the longest period (not to exceed three (3) years) that is
permissible.

4.14                           Approvals.  To the extent that the Approval with respect
to any Contract or Governmental Authorization included within the Purchase
Assets is required in connection with the Transactions, the parties will use
their reasonable efforts to obtain such Approval between the date hereof and
the Closing, and if any such Approval is not obtained before the Closing (but
without limiting Buyer’s rights under Article V), (a) the parties hereto acknowledge and agree that
at the Closing Seller will not assign to Buyer any such Contract or
Governmental Authorization that by its terms requires, before such assignment,
the Approval of any third Person, unless such Approval is obtained, (b) Seller
will cooperate with Buyer to maintain each such Contract or Governmental
Authorization in full force and effect for the benefit of Buyer until such Approval
is obtained, and (c) Seller will use reasonable efforts to obtain each such
Approval as promptly as practicable and will assign such Contract or
Governmental Authorization to Buyer as soon as such Approval is obtained.

4.15                           Notices and Cooperation.  During the period from the date of this
Agreement through the Closing Date, each party
will (a) promptly provide the other parties with copies of all correspondence
and inquiries to and from, and all filings made with, any Governmental Entity
(including any Governmental Entity with responsibility, oversight or regulatory
authority with respect to Environmental Laws) or any union and to review any
and all filings or written correspondence before they are made or sent, (b)
keep the other party apprised as to all discussions or negotiations with any
Governmental Entity and with any union and permit such other party to
participate therein and (c) reasonably cooperate with such other party with
respect to the foregoing.

4.16                           Accounts Receivable.  From and after the Closing, Seller agrees to
forward to Buyer, within three Business Days after receipt thereof, any and all
proceeds from accounts receivable that are received by Seller after the Closing
Date.  Notwithstanding the foregoing, if,
after the Closing Date, Seller receives any payment from any Person who at the
time of such payment has outstanding accounts payable to Seller, on the one
hand (“Seller Accounts Receivable”)
and to Buyer, the Business or a Company, on the other hand (“Buyer Accounts Receivable”), and the
payment (a) does not indicate whether it is in respect of Seller Accounts
Receivable or Buyer Accounts Receivable or (b) indicates that it is in payment
of both Seller Accounts Receivable and Buyer Accounts Receivable without
specifying the portion to be allocated to each, Seller will first contact the
payor to determine the payor’s intended allocation of the payment and such
allocation will govern, and if the payor does not provide the intended
allocation, then Seller and Buyer shall consult with one another to determine
the proper allocation of such payment; and, if they are unable to reach
agreement on the proper allocation, such payment shall be 

 34
 

 

applied so as to retire Seller Accounts Receivable and
Buyer Accounts Receivable in chronological order based upon the period of time
such accounts receivable have existed.

4.17                           Disclosure
Schedule Updates.  Seller
shall have the right to deliver to the Buyer, at any time prior to the 3rd Business Day prior to the Closing Date,
updated Disclosure Schedules that are revised only (i) to reflect any event
that occurs after the date hereof outside of the reasonable control of the
Seller or (ii) to reflect the listing of additional Contracts on Schedule 2.13
and that in each case causes Section 2.13(a) to be untrue or inaccurate as of
the date hereof.  If Seller updates the
Disclosure Schedule pursuant to clause (i) of the immediately preceding
sentence, Buyer will have the right, in its sole discretion, to terminate this
Agreement at any time prior to the Closing if the condition set forth in Section
5.2(a) would not be satisfied if Seller had not made any updates to the
Disclosure Schedule.  If Seller updates
the Disclosure Schedule pursuant to clause (ii) of the first sentence of
this Section 4.17, Buyer will have the right, in its reasonable
discretion, to terminate this Agreement if the Buyer determines in good faith
that such disclosure adversely affects the Business in a material manner.  If Buyer elects to close the transactions
contemplated hereby notwithstanding such updates to the Disclosure Schedule,
absent fraud by Seller or any of its Representatives, Buyer shall not have any
claim under Section 7.2(a)(i) as a result of such updates to the
Disclosure Schedule except for a
breach of the representation and warranty as so revised.

4.18                           Delivery of
Monthly Financial Statements. Seller
shall deliver to Buyer, within 21 calendar days of the end of each month during
the period between the date hereof and Closing, unaudited financial statements
(including balance sheet and statements of income and cash flows) for such
month in a form consistent with the Financial Statements, which monthly
financial statements shall be prepared in accordance with GAAP applied on a
consistent basis with past practice and presenting fairly the financial
position and the results of operations of the Group for the month then ended.

4.19                           Employees.

(a)                                  At the Closing, Buyer shall offer employment to
commence as of the Closing Date to all employees of Seller primarily employed
in the Business as of the Closing at the same initial base salaries and wages
(but excluding any bonus and incentive programs) as those in effect on or
immediately prior to the Closing Date and shall offer such employees the same
initial benefits as Buyer offers its own similarly-situated employees.  Seller
will (i) use commercially reasonable efforts to assist Buyer in hiring such
employees, (ii) consult with Buyer on all material oral or written
communications or meetings regarding future employment with Buyer of any such
employees, (iii) release from employment, effective no later than the Closing
Date, each such employee who accepts such offer (each a “Transferred
Employee”) and shall not enforce against any such employee any
non-compete or similar contractual obligations or otherwise assert with respect
to any such employee claims that would otherwise prohibit, restrict or place
conditions on such employee’s acceptance of the Buyer’s offer or thereafter
such employee’s continuing employment by the Buyer, and (iv) pay to such
Transferred Employees on the date of such termination all salaries, wages,
accrued vacation and other compensation required to be paid by applicable Legal
Requirements. Regardless of anything else contained in this Agreement, the
parties do not intend to, and no provision of this Agreement shall, create or
confer any rights or obligations except as between the parties, and no past,
present or future employee or consultant of Seller or Buyer will be treated as
third-party beneficiaries of this Agreement.

(b)                                 With respect to participation in Buyer’s
401(k) plan and with respect to the rate of accrual under Buyer’s vacation
policy, Buyer shall grant all Transferred Employees from and after the Closing
Date credit for all service with Seller and its Affiliates and their respective
predecessors prior to the Closing Date for all purposes for which such service
was recognized by Seller and its Affiliates.

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(c)                                  Buyer shall cause its 401(k) plan to accept
direct rollovers of cash from Seller’s 401(k) plans for those Transferred
Employees who elect such direct rollovers.

4.20                           Intellectual Property Licenses.  Prior to the Closing, Seller shall use
commercially reasonable efforts to obtain licenses and pay all license fees
owed to any third party with respect to the use by the Group on or before the
Closing of any software or other Intellectual Property Rights of such third
party without a fully-paid license therefor. After the Closing, Buyer and
Seller shall cooperate to obtain, for the benefit of the Business, licenses
from third parties with respect to all software or other Intellectual Property
Rights used by the Group on or before the Closing without a fully-paid license
therefor; provided that Buyer shall control the negotiations with
respect thereto and Seller shall pay all of the license fees and related
expenses (including interest and penalties with respect thereto, if any) to
such third parties in connection therewith; provided further that if any such
license is time-bound, Seller shall only be obligated to pay the portion of the
license fee (including interest and penalties with respect thereto, if any)
applicable to the period of time before the Closing. Seller shall indemnify and
hold harmless the Buyer Indemnitees from (a) the failure to make any such
payment described in the preceding sentence and (b) any and all Damages
resulting from third party claims related to the use before the Closing by the
Group of software or other Intellectual Property Rights without a fully-paid
license therefor. In connection with Seller’s obligation under this Section
4.20, at Closing, Buyer will subtract from the Purchase Price and deposit
in escrow, pursuant to an escrow agreement reasonably acceptable to Buyer,
Seller and the Escrow Agent to be entered into at the Closing (the “Escrow Agreement”),
by wire transfer of immediately available funds to an account established at
the escrow agent identified in the Escrow Agreement (the “Escrow Agent”), an
amount equal to $500,000 (the “Escrow Amount”). 
Any amounts owed to the Buyer Indemnitees under this Section 4.20
shall first be satisfied out of the escrow account to the extent of the Escrow
Amount and thereafter by Seller. Any portion of the Escrow Amount remaining in
the escrow account on the twelve-month anniversary of the Closing shall be paid
to the Seller; provided, however, that if any claims are then
pending under this Section 4.20, then an amount equal to the aggregate
dollar amount of such claims shall remain in the escrow account pending
resolution of such claims.

ARTICLE V

CLOSING CONDITIONS

5.1                                 Conditions to Each Party’s Obligations.  Each
party’s obligation to consummate the Acquisition is subject to the satisfaction
or waiver at or prior to the Closing, of each of the following conditions:

(a)                                  HSR Act and Other
Regulatory Compliance.  To the extent that a filing or Approval is
required under the HSR Act or the antitrust or competition laws of another
jurisdiction outside the United States of America, all waiting periods (and any extensions thereof)
applicable to the Acquisition under the HSR Act, or the antitrust or
competition laws of another jurisdiction outside of the United States of
America, shall have expired or early termination of such waiting periods shall
have been granted by the Federal Trade Commission or the Antitrust Group of the
Department of Justice, or other competent authorities of another jurisdiction
outside of the United States of America, and all such Approvals shall have been
granted, received or satisfied, in each case without condition or requirement
for the disposition or divestiture of any product or other asset of Seller or
Buyer.

(b)                                 No Injunctions or
Restraints.  No temporary restraining order, preliminary or permanent injunction
(nor any equivalent under applicable foreign Legal Requirements) or other order
issued by any Governmental Entity or other material legal restraint or
prohibition issued or promulgated by a Governmental Entity preventing the
consummation of the Acquisition shall be in effect or shall be

 36
 

 

threatened, and there shall
not be any Legal Requirement enacted or deemed applicable by such a
Governmental Authority to the Acquisition that makes consummation of such
transaction illegal.

5.2                                 Conditions to Buyer’s Obligations.  The
obligation of Buyer to consummate the Acquisition and complete the Closing are
subject to the satisfaction or waiver by Buyer in its sole discretion, at or
prior to the Closing, of each of the following conditions:

(a)                                  Accuracy of
Representations and Warranties; Closing Certificate. 
Each of the representations
and warranties of Seller set forth in this Agreement (i) that are not qualified
by materiality must be true and correct in all material respects as of the
Closing Date, and (ii) that are qualified by materiality must be true and correct
in all respects as of the Closing Date.

(b)                                 Performance.  All
of the obligations, covenants and agreements of Seller to be performed under
this Agreement at or prior to the Closing shall have been complied with and
performed in all material respects as of the Closing Date.

(c)                                  Corporate
Certificate.  Seller shall have delivered to Buyer an attestation certifying that the
conditions set forth in clauses (a), (b), (d), (e) and (f) of this Section
5.2 have been satisfied at the Closing, certified in each case as of the
Closing Date by the President and Chief Financial Officer of Seller as being
correct and complete, and attaching thereto copies of all resolutions approved
by Seller’s Board of Directors related to the transactions contemplated hereby
(or an attestation by such individuals regarding the substance of same).

(d)                                 Consents.  Seller
shall have received and furnished to Buyer all Required Consents listed on Schedule
5.2(d) in form and substance reasonably acceptable to Buyer, and each such Required Consent will be in effect as of the Closing Date.

(e)                                  Material Adverse Effect. 
There shall not have been a Material Adverse Effect since the date of
this Agreement.

(f)                                    Encumbrances. 
Provision reasonably satisfactory to Buyer shall have been made for the release
as of the Closing Date of any and all Encumbrances on any and all of the
Purchase Assets, Owned Properties and Acquired Shares (except, in the case of
Purchase Assets and Owned Properties, for Encumbrances described in clauses
(i) — (iv) of the definition of Permitted Encumbrances and, in the
case of Owned Properties, for the Encumbrances identified as remaining
post-Closing on Schedule 2.11(a)).

(g)                                 Shareholders Meetings of Magnetek Italy. Seller shall have caused to have occurred
as of the Closing Date (i) an extraordinary shareholders’ meeting of Magnetek
Italy to resolve to modify the current by-laws of Magnetek Italy in the form of
Exhibit F hereto or as otherwise
requested in writing by Buyer and (ii) an ordinary shareholders’ meeting of
Magnetek Italy to resolve upon the appointment as members of the board of
director of Magnetek Italy the individuals set forth on Schedule 5.2(g)(i),
as members of the panel of statutory auditors of Magnetek Italy the individuals
set forth on Schedule 5.2(g)(ii), and as statutory auditing company (“società di revisione addetta al controllo contabile”) of
Magnetek Italy, Deloitte & Touche or an Affiliate thereof designated by
Buyer, or in each case as otherwise requested in writing by Buyer.

(h)                                 Audited Financial Statements.  By no later than five (5) Business Days prior to the
Closing Date, the Buyer shall have received the combined audited balance sheet
of the Group for each of the fiscal years ended July 3, 2005 and July 2, 2006,
together with the combined audited related statements of income and of cash
flows for each of the three fiscal years ended June 27, 2004, July 3,

 37
 

 

2005 and July 2, 2006, including notes thereto,
together with the report thereon of Ernst & Young LLP, independent
certified public accountants of the Seller.

(i)                                     Withdrawal from Consortium.  As of the Closing, Seller and each Company
shall have withdrawn its membership with the PMBus consortium without any
post-Closing liability on behalf of Buyer or any Company, and Seller shall have
provided Buyer evidence thereof.

(j)                                     Transitional Agreement. 
Seller shall have executed and delivered to Buyer a transition services
agreement in substantially the form as set forth in Exhibit I
attached hereto.

5.3                                 Conditions to Obligations of Seller.  The
obligation of Seller to consummate the Acquisition and complete the Closing is
subject to the satisfaction or waiver by Seller in its sole discretion, at or
prior to the Closing, of the following conditions:

(a)                                  Closing Certificate.  Each of the representations and
warranties of Buyer set forth in this Agreement shall be true and correct in
all material respects as of the Closing Date. 
At the Closing, Buyer shall have delivered to Seller an attestation
certifying that the conditions set forth in this clause (a) and in clause
(b) of this Section 5.3 have been satisfied at the Closing,
certified in each case as of the Closing Date by an officer of Buyer as being
correct and complete.

(b)                                 Performance of
Covenants.  All of the obligations, covenants and agreements of Buyer to be
performed under this Agreement at or prior to the Closing shall have been
complied with and performed in all material respects.

(c)                                  Alternative Energy Agreement. 
Buyer shall have executed and delivered to Seller the Alternative Energy
Agreement in substantially the form as set forth in Exhibit G
attached hereto.

(d)                                 Supply Agreement. 
Buyer shall have executed and delivered to Seller the Supply Agreement
in substantially the form as set forth in Exhibit H.

(e)                                  Transitional Agreement. 
Buyer shall have executed and delivered to Seller a transition services
agreement in substantially the form as set forth in Exhibit I
attached hereto.

ARTICLE VI

TERMINATION

6.1                                 Termination.  This Agreement may be terminated prior to the Closing Date:

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

(b)                                 by either Buyer or Seller, if the Acquisition
has not been consummated by December 31, 2006 (the “Termination Date”),
provided that the right so to terminate shall not be available to either party
if it is then in material breach of this Agreement;

(c)
                               by Buyer or Seller, if a final,
non-appealable injunction, restraining order or decree of any nature of any
Governmental Authority of competent jurisdiction is issued that prohibits the
consummation of the Acquisition; provided,
however, that the party
seeking to terminate this Agreement pursuant to this clause (c) shall
have used its commercially reasonable efforts to have such injunction, order or
decree vacated or denied; or

 38

 

(d)                                 by either Buyer or Seller by written notice
to the other party if there has been a material misrepresentation or material
breach of a covenant or agreement contained in this Agreement on the part of
the other and such breach, if curable, has not been cured within 30 days of
such notice and the terminating party is not on the date of termination in
material breach of any material provision of this Agreement.

6.2                                 Effect of
Termination.  If this Agreement is terminated as provided in Section 6.1, this
Agreement will be of no further force or effect; provided, however, that:

(a)                                  Sections 4.4 (Confidentiality) and 4.7 (Public
Disclosure), this Section 6.2 (Effect of Termination) and Article
VIII (Miscellaneous) will survive the termination of this Agreement and
remain in full force and effect, and

(b)                                 the termination of this Agreement will not
relieve any party from any liability for any breach of this Agreement; provided, however, in the event that this
Agreement is terminated prior to Closing, no party will have any liability to
another party under Article VII of this Agreement or otherwise as a
result of any breach or inaccuracy of any representation or warranty contained
in this Agreement, other than in the case of fraud.

6.3                                 Procedure Upon Termination.  Subject
to the provisions of Section 6.2 above, in the event of the termination
and abandonment of this Agreement, written notice thereof shall promptly be
given by the terminating party to the other party, and this Agreement shall
terminate and the transactions contemplated hereby shall be abandoned without
further action by any of the parties hereto.

ARTICLE VII

INDEMNIFICATION

7.1                                 Survival of Representations, Warranties and
Covenants. Subject to Section
7.3(c):

(a)                                  Representations and Warranties of Seller. The representations and warranties of
Seller in Article II will survive the Closing and will terminate upon
the 18-month anniversary of the Closing Date, except for (i) the
representations and warranties in Sections 2.3(d), 2.4, 2.6(a),
and 2.11(g), each of which shall have no expiration, (ii) the
representations and warranties in Sections 2.16, 2.18, 2.21,
and 2.25, each of which will survive until the expiration of the
applicable statute of limitations with respect to the subject matter thereof,
and (iii) the representations and warranties in Section 2.17 to the
extent the underlying claim arising from a breach thereof is for Taxes, each of
which will survive until the expiration of the applicable statute of
limitations with respect to the subject matter thereof.

(b)                                 Buyer’s Representations and Warranties.  The
representations and warranties of Buyer in Article III will survive
the Closing and will terminate upon the 18-month anniversary of the Closing
Date, except for the representations and warranties contained in Section 3.2,
which shall have no expiration, and the representations and warranties
contained in Section 3.4, which will survive until the expiration of the
applicable statute of limitations with respect to the subject matter thereof.

(c)                                  Covenants.  All covenants of the parties
will survive according to their respective terms.

(d)                                 Certain Definitions. 
Subject to reduction in accordance with Section 7.10 below, the
term “Damages”
means any and all Liabilities, losses, claims, expenses, costs, fines, fees,
penalties, settlement payments, obligations or injuries, including those
resulting from claims, actions, suits, 

 39
 

 

demands, assessments,
investigations, judgments, penalties, fines, awards, arbitrations or other
proceedings, together with reasonable costs and expenses, including the
reasonable attorneys’ fees and expenses (including those incurred in the
investigation, prosecution and defense of third party Claims).  The term “Claim”
means a claim for indemnification for Damages brought by a Buyer Indemnitee or
Seller Indemnitee under Article VII. 
The term “Buyer
Indemnitees” means Buyer and any present or future officer,
director, employee, Representative, Affiliate, subsidiary, successor or
permitted assign of Buyer.  The term “Seller Indemnitees”
means Seller, and any present or future officer, director, Representative,
employee, successor or permitted assign of Seller.  “Indemnified Party” means any Buyer Indemnitee
or Seller Indemnitee, as applicable.  “Indemnifying Party”
means Seller, with respect to any Claim brought by a Buyer Indemnitee, or
Buyer, with respect to any Claim brought by a Seller Indemnitee.

7.2                                 Indemnification by Seller.

(a)                                  Subject to the provisions of Section 7.3
below, Seller will indemnify, defend and hold harmless the Buyer Indemnitees
from and against any and all Damages directly or indirectly incurred, paid or
accrued in connection with or resulting from or arising out of:

(i)                                     the breach or inaccuracy of any
representation or warranty of Seller contained in Article II of this
Agreement;

(ii)                                  the breach or violation of any covenant or
other obligation of Seller under this Agreement; and

(iii)                               each Indemnified Liability.

(b)
                              Notwithstanding anything to the contrary
contained in this Section 7.2 or elsewhere in this Agreement, Seller
shall not be obligated under this Agreement to indemnify, defend and hold
harmless any Buyer Indemnitee against any Damage resulting from a breach or
inaccuracy of any representation or warranty, covenant or agreement to the
extent an adjustment reducing the Purchase Price is made in respect thereof in
accordance with the provisions of Section 1.6 or Section 1.7 of
this Agreement.

7.3                                 Limitations on Seller’s Indemnification
Liability.

(a)                                  Threshold for Bringing Claims Against Seller.  If a
Buyer Indemnitee seeks indemnification for matters identified in Section
7.2(a)(i), Seller will not have any obligation to indemnify the Buyer
Indemnitee unless and until the aggregate Damages for all Claims giving rise to
Damages under Section 7.2(a)(i) exceeds $500,000 (the “Indemnification Threshold”)
at which time (and subject to the limitation set forth in Section 7.3(b)
below) Seller must indemnify the Buyer Indemnitee for the full amount of
Damages incurred to date, including the Damages included in determining that
the Indemnification Threshold has been met. 
The foregoing threshold shall not apply to any Claim for Damages arising
from fraud by Seller or its Representatives.

(b)                                 Limitation of Aggregate Amount of Seller
Liability.  Except in the case of fraud by Seller or its
Representatives, in no event will the total cumulative amount of Damages for
which Seller may be liable to Buyer Indemnitees under Section 7.2(a)(i)
exceed $5,744,375 (the “Cap”),
except in respect of Claims for the breach by Seller of the representations and
warranties described in Section 7.1(a)(i) and (ii) and (iii)
(collectively, the “Fundamental Representations”).
Regardless of the foregoing, Damages owing under Section 7.2(a)(ii), 7.2(a)(iii)
and under Section 7.2(a)(i) with respect to the Fundamental
Representations shall not count towards the Cap.

 40
 

 

(c)                                  Time Limit for Claims against Seller. 
Except in the case of fraud by Seller or its Representatives, no Claims
for Damages arising from or relating to a breach of the representations and
warranties of Seller referred to in Section 7.1 of this Agreement may be
brought at any time after the expiration of such representations and
warranties. Regardless of the foregoing, any Claim for Damages that is brought
at any time prior to the expiration of the applicable expiration date set forth
in Section 7.1 will not expire on such expiration date and instead may
be prosecuted by the Buyer Indemnitee until its conclusion (which may be after
such expiration date).

(d)                                 No Liability for Post-Closing Taxes. 
Notwithstanding anything in this Article VII or elsewhere in this
Agreement to the contrary, Seller shall not be liable for and shall not
indemnify Buyer for any Taxes of or relating to the Companies for taxable
periods ending after the Closing Date, other than (i) for Seller’s obligation
with respect to the pre-Closing portion of a Straddle Period as and to the
extent provided in Section 4.9(c), (ii) any Tax liability incurred by
any Buyer Indemnitee resulting from receipt of any indemnification payment
hereunder that is not treated as an adjustment to Purchase Price, net of the
Tax benefit of the underlying claim giving rise to such payment and only to the
extent such liability exceeds the additional Tax liability that would have
resulted from treating the indemnification payment as a reduction in Purchase
Price and only to the extent Buyer and its Affiliates complied with Section
7.8, and (iii) as provided in Section 7.3(e).

(e)                                  Credit for Tax Attributes. 
Subject to Section 7.3(f), the amount of Taxes for which Seller
is responsible with respect to any taxable period ending prior to the Closing
Date, and with respect to any pre-Closing portion of a Straddle Period, shall
be determined by providing Seller with the benefit of any net operating losses
or other deferred tax assets of the Companies as of the Closing Date as
determined as of the Closing Date prior to any adjustments resulting thereto by
any taxing authority following the Closing Date (collectively, “Deferred Tax
Assets”), without any reduction for income accruing or other events
occurring following the Closing.  By way
of example and not limitation, if there is an adjustment increasing the taxable
income of Magnetek Italy for a pre-Closing period and a net operating loss
arising in a pre-Closing period would have been available to offset such income
but for taxable income earned in a post-Closing period, Seller’s obligation for
such pre-Closing Taxes shall be determined as if such net operating loss were
not reduced by such post-Closing income and were fully available to offset such
income and, to the extent of such offset, Seller’s obligation shall be reduced,
except to the extent provided in the last sentence in this Section 7.3(e)
and in Section 7.3(f).  In
addition, if there is an adjustment increasing the taxable income of Magnetek
Italy for a pre-Closing period but such adjustment has the effect of reducing a
previously reported net operating loss and does not giving rise to a tax
liability with respect to a pre-Closing period, Seller shall not be liable for
the utilization of such net operating loss, except to the extent provided in
the last sentence in this Section 7.3(e) and in Section 7.3(f).  Notwithstanding the foregoing, if Seller’s
indemnity obligation was reduced by reason of this Section 7.3(e) on the
assumption that a Deferred Tax Asset was available, and it later is determined
by a final decision that such Deferred Tax Asset was not available, and if
Buyer complied in all material respects with the provisions of Section 4.9
that pertain to such Deferred Tax Asset, then Seller shall be required to pay
to Buyer the amount of any indemnity payment that would have been payable by
Seller had such final determination occurred prior to the time the initial
indemnity claim was resolved.  For
purposes of the preceding sentence, “final determination” shall mean a Tax
Proceeding concluded, with no further right to appeal to a Tax authority or a
court of competent jurisdiction, in accordance with Section 4.9(a)
hereof.

(f)                                    Limitation on Credit for Tax Attributes. 
Notwithstanding Section 7.3(d) or Section 7.3(e), the
maximum benefit of the Deferred Tax Asset (which Deferred Tax Asset, in the
case of a net operating or other loss or deduction, shall equal the amount of
such loss or deduction multiplied by the tax rate applicable in the
jurisdiction in which such loss is available as a tax benefit) that may be used
to offset Seller’s indemnity obligations hereunder for Taxes attributable to
periods prior to the Closing Date 

 41
 

 

as provided in Section
7.3(e) shall be 3 Million Euros.  If,
as a result of an audit or other action by a taxing authority, an adjustment to
taxable income of the Companies during any Tax period ending prior to the
Closing Date, or the Straddle Period prior to the Closing Date, results in the
utilization of more than 3 Million Euros of Deferred Tax Assets against
liabilities for Taxes arising in periods prior to the Closing (the excess of
such Deferred Tax Assets utilized to offset such pre-Closing Taxes in excess of
3 Million Euros, the “Excess Utilization”), then Seller shall pay (or
reimburse Buyer for) any Taxes paid or accrued by Buyer or the Companies that
the Buyer or the Companies would not have paid or accrued had the Excess
Utilization not occurred.  By way of clarification,
the parties agree that the utilization of Deferred Tax Assets to offset income
in periods following the Closing Date shall not be taken into account in
determining the Excess Utilization.  In
no event shall Seller’s liability under this Article VII be increased by reason
of this Section 7.3(f) in an amount greater than the Excess Utilization,
and there shall be no duplicate recovery by Buyer of amounts described in the
penultimate sentence of Section 7.3(e) and amounts described in this Section
7.3(f).

7.4                                 Indemnification by Buyer.

(a)                                  Subject to the provisions of this Section
7.4 below, Buyer will indemnify, defend and hold harmless the Seller
Indemnitees from and against any and all Damages directly or indirectly
incurred, paid or accrued in connection with or resulting from or arising out
of:

(i)                                     the breach or inaccuracy of any
representation or warranty of Buyer contained in Article III of this
Agreement;

(ii)                                  the breach or violation of any covenant or
other obligation of Buyer under this Agreement; and

(iii)                               each Assumed Liability, except to the extent
that the Buyer Indemnitees are entitled to indemnification pursuant to Section
7.2 by virtue of the circumstances relating to or giving rise to the matter
resulting in such Damages.

(b)                                 Time Limit for Claims against Buyer. 
Except in the case of fraud by Buyer or its Representatives, no Claims
for Damages arising from or relating to a breach of the representations and
warranties of Buyer referred to in Section 7.1 of this Agreement may be
brought at any time after the expiration of such representations and
warranties; provided, however, that any Claim for Damages that is
brought at any time prior to the expiration of the applicable expiration date
set forth in Section 7.1 will not expire on such expiration date and
instead may be prosecuted by the Seller Indemnitee until its conclusion (which
may be after such expiration date).

(c)
                               Threshold for Bringing Claims Against Buyer.  If a
Seller Indemnitee seeks indemnification for matters identified in Section
7.4(a)(i), Buyer will not have any obligation to indemnify the Seller
Indemnitee unless and until the aggregate Damages for all Claims giving rise to
Damages under Section 7.4(a)(i) exceeds $500,000 (the “Buyer Indemnification Threshold’”)
at which time (and subject to the limitation set forth in Section 7.4(d)
below) Buyer must indemnify the Seller Indemnitee for the full amount of
Damages incurred to date, including the Damages included in determining that
the Buyer Indemnification Threshold has been met.  The foregoing threshold shall not apply to
any Claim for Damages arising from fraud by Buyer or its Representatives.

(d)
                              Limitation of Aggregate Amount of Buyer
Liability.  Except in the case of fraud by Buyer or its
Representatives, in no event will the total cumulative amount of Damages for
which Buyer may be liable to Seller Indemnitees under Section 7.4(a)(i)
exceed $5,744,375 (the “Buyer Cap”),
except in respect of Claims for the breach by Buyer of the representations and
warranties described in 

 42
 

 

Section 3.2 or Section 3.4. Regardless of the
foregoing, Damages owing under Section 7.4(a)(ii), 7.4(a)(iii)
and under Section 7.4(a)(i) with respect to the representations and
warranties described in Section 3.2 or Section 3.4 shall not
count towards the Buyer Cap.

7.5                                 Notice of Claim.

(a)                                  Notice Requirement. 
Promptly after becoming aware of the existence of a potential Claim, the
Indemnified Party will give to the Indemnifying Party a written notice of the
Claim executed by an officer of such Indemnified Party (a “Notice
of Claim”).  No delay on
the part of the Indemnified Party in giving a Notice of Claim will relieve the
Indemnifying Party from any of its obligations unless and only to the extent
that the Indemnifying Party is materially prejudiced by the delay.  The written assertion of a claim, demand,
suit, action, arbitration, investigation, inquiry or proceeding brought by a
third party against an Indemnified Party that is based upon, or includes assertions
relating to any item listed in Section 7.2 or Section 7.4, as
applicable, is referred to in this Agreement as a “Third
Party Claim.”

(b)                                 Contents of Notice of Claim.  Each
Notice of Claim will contain (i) the good faith estimate (if an estimate can
reasonably be made) of the Indemnified Party of the reasonably foreseeable
amount of the alleged Damages arising from the Claim, and (ii) a brief
description of the material facts, circumstances or events giving rise to the
alleged Damages based on information reasonably available to the Indemnified
Party, and copies of any formal demand or complaint.

7.6                                 Defense of Third Party Claims.  The
Indemnifying Party will have 14 days after receipt of a Notice of Claim related
to a Third Party Claim to notify the Indemnified Party whether or not it desires
to defend the Indemnified Party (with counsel reasonably acceptable to the
Indemnified Party) against such Third-Party Claim.  If the Indemnifying Party so elects to defend
such claim, the Indemnifying Party shall not be liable to the Indemnified Party
for legal expenses subsequently incurred by the Indemnified Party in connection
with the defense thereof unless (a) the Indemnifying Party does not promptly
defend or settle any such claims, in which case the Indemnified Party will have
the right to control any defense or settlement, at the expense of the
Indemnifying Party, or (b) a conflict of interest prevents the counsel
appointed by the Indemnifying Party from representing the Indemnified
Party.  The Indemnifying Party shall
obtain the prior written consent of the Indemnified Party (which consent shall
not be unreasonably withheld or delayed) before entering into any settlement of
a claim or ceasing to defend such claim if, pursuant to or as a result of such
settlement or cessation, injunctive or other equitable relief will be imposed
against the Indemnified Party or if such settlement does not expressly and
unconditionally release the Indemnified Party from all liabilities and
obligations with respect to such claim, except for payments that would be required
to be paid by the Indemnifying Party hereunder. 
The Indemnified Party will at all times also have the right to
participate in, but not control (except as otherwise provided herein), the
defense at its own expense.  The parties
will cooperate in the defense of all Third-Party Claims that may give rise to
Indemnifiable Claims hereunder.  In
connection with the defense of any claim, each party will make available to the
party controlling such defense any books, records or other documents within its
control that are reasonably requested in the course of such defense during
normal business hours and in such a manner so as not to interfere with the
Indemnified Party’s operations.

7.7                                 Claims Between the
Parties.  If the Indemnified Party has a claim against
the Indemnifying Party that does not involve a Third Party Claim, then the
terms of Section 8.4 will apply.

7.8                                 Purchase Price Adjustment.  Any
payment made by Seller under this Article VII will be paid to Buyer and
treated by the parties and their Affiliates as a reduction of the Purchase
Price.

 43
 

 

7.9                                 Exclusive Remedy; Limitation on Damages. From and after the Closing, other than as
provided in Section 1.7, Section 8.12 and except for fraud by the
other party or its Representatives, this Article VII shall be the sole
and exclusive remedy for any claim or controversy arising out of or relating to
(i) any breach or inaccuracy of any representation or warranty made by Buyer or
Seller in connection with the Acquisition (including, without limitation, any
claims based upon any violation of state or federal securities laws in
connection with the sale of the Acquired Shares to Buyer), or (ii) any breach
or violation of any covenant (including all covenants for indemnification,
wherever set forth in this Agreement) or other obligation of Buyer or Seller or
(iii) any claim of Buyer or Seller arising under this Agreement.  Without limiting the foregoing, the parties
acknowledge and agree that no Buyer Indemnitee or Seller Indemnitee shall be
entitled to indemnification for punitive, special, or consequential Damages,
including, but not limited to, loss of revenue or income, cost of capital,
diminution in value or loss of business reputation or opportunity (other than
any of the foregoing representing Damages payable by an Indemnified Party
pursuant to a Third Party Claim).  From
and after the Closing, other than as provided in Section 1.7, this Article
VII, Section 8.12 and except for fraud by the other party or its
Representatives, Buyer and Seller, on their own behalf and on behalf of all
Buyer Indemnitees and Seller Indemnitees, respectively, waive any and all
additional rights they may have by operation of applicable law arising from the
Acquisition including, without limitation, any such rights in respect of CERCLA
and other Environmental Law, under Italian law in respect of affiliated
Persons, and under any other law which may give rise to any recourse against
any director, officer, shareholder, employee or agent of the other party.

7.10                           Damages Net of Insurance; Taxes.

(a)                                  The amount of any Damages for which
indemnification is provided under this Article VII with respect to a
particular Claim for Damages shall be net of (i) any amounts actually recovered
by the Person entitled to indemnification under insurance policies (but without
any obligation of such Person to actually seek recovery under such insurance
policy) with respect to such Claim and (ii) the amount of any reduction or
refund of Taxes actually realized by the Indemnified Party during or prior to
the year an indemnity payment is paid with respect to such Claim.

(b)                                 If any party makes any payment under this Article
VII in respect of any Claim for Damages, such Indemnifying Party shall be
subrogated, to the extent of such payment and to the extent that such subrogation
is permitted by applicable law and any applicable Contract related to the
claim, to the rights of indemnification (but not the rights of insurance) of
such Indemnified Party against any applicable third party (other than a
provider of insurance) with respect to such Damages.

7.11                           Environmental Indemnity Procedures.

(a)                                  Seller’s indemnity with respect to
Environmental Claims pursuant to Sections 1.4(g) and 7.2(a) shall
be subject to this Section 7.11. Seller shall have the right to control
and investigate and/or remediate any condition giving rise to a claim or demand
for indemnification by Buyer under this Agreement with respect to any
Environmental Claims relating to the presence or Release of Hazardous
Materials; provided, however, that in such circumstances, Seller
shall (i) not unreasonably interfere with or disrupt Buyer’s operations
and (ii) subject to Buyer’s consent not to be unreasonably withheld, be
permitted to place title or use restrictions on any affected property, provided
such restrictions do not materially interfere with the current industrial use
thereof or violate the terms of any Leased Real Property; provided, further, that if after written notice and a reasonable opportunity
to cure Seller does not exercise such right to control, investigate or
remediate within a reasonable period, or in any case fails to promptly commence
or diligently continue to control, investigate and remediate, Buyer may
exercise such right and Seller will indemnify Buyer pursuant to Article VII
hereof.

 44
 

 

(b)                                 Seller shall not have any obligation to
indemnify any Buyer Indemnitee from and against (i) any Environmental
Claims arising from or related to any material change in the use of any Real
Properties from their current industrial use; (ii) any Environmental
Claims to the extent arising from or related to any amendment to or change in
any Environmental Law from that which is in effect on the date hereof or
(iii) any remediation or other liability arising as a result of the
presence of non-friable asbestos in or upon any of the improvements located on
any Owned Real Property or Leased Real Property at any time.  Seller will not have any obligation to
indemnify Buyer Indemnitees from any Environmental Claims arising with respect
to any release of Hazardous Materials resulting solely from Buyer’s or any of
its Affiliate’s activities or omissions. 
Seller will not have any obligation to indemnify Buyer with respect to
Buyer’s supervision or oversight costs in connection with any remediation or
other activities performed by Seller. 
Seller’s obligation with respect to indemnification for Environmental
Claims pursuant to Sections 1.4(g) and 7.2(a) shall be limited
solely to the extent necessary to satisfy the requirements of the Governmental
Entity or other third party asserting such Environmental Claim; provided,
however, that Buyer shall be permitted to participate in (but not
control except as otherwise provided herein) any discussions with such
Governmental Entity or third party in respect of such Environmental Claim.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

8.1                                 Amendment; Waiver.  This Agreement may not be amended except by
an instrument in writing signed by Seller and Buyer.  At any time prior to the Closing, any party
hereto may (a) extend the time for the performance of any of the obligations or
other acts of the other parties hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto, or (c) waive compliance with any of the agreements or conditions
contained in this Agreement.  Waiver of
any term or condition of this Agreement will only be effective if and to the
extent documented in a writing signed by the party making or granting such
waiver and will not be construed as a waiver of any subsequent breach or waiver
of the same term or condition, or a waiver of any other term or condition of
this Agreement.  Upon the request of Buyer, the parties agree
to amend this Agreement to substitute in place of Buyer any other wholly-owned
direct or indirect Affiliate of Buyer; provided, however,
notwithstanding such substitution, Buyer shall remain jointly and severally
liable for any breaches by Buyer or its substituted Affiliate of the terms and
provisions of this Agreement.

8.2                                 Applicable Law; Severability.  This
Agreement shall be governed by and construed under the laws of the State of New
York, exclusive of the body of law known as conflicts of law.  Should a court or other body of competent
jurisdiction determine that any term or provision of this Agreement is
excessive in scope or duration or is illegal, invalid or unenforceable, then
the parties agree that such term or provision shall not be voided or made
unenforceable, but rather shall be modified so as to be valid, legal and
enforceable to the maximum extent possible, under the purposes stated in the
preceding sentence and with applicable law, and all other terms and provisions
of this Agreement shall remain valid and fully enforceable.

8.3                                 Attorneys’ Fees.  If
any action at law or in equity is necessary to enforce or interpret the terms
of this Agreement, including any proceeding under Section 8.4, the
prevailing party shall be entitled to reasonable attorneys’ fees, costs and
necessary disbursements in addition to any other relief to which such party may
be entitled.

8.4                                 Venue for Dispute Resolution. 
Except as set forth in Section 1.7 of this Agreement, any Claim,
potential Claim, or other controversy, claim or dispute relating thereto or
otherwise arising out of or relating to this Agreement or the transactions
contemplated hereby, whether based on contract, tort, statute or any other
legal or equitable theory (“Dispute”),
unless resolved by the parties, shall be brought in the state or federal courts
in the Central District of the State of California.  Each of the parties hereto 

 45
 

 

consents to and expressly
submits to the exclusive jurisdiction of such courts and waives any claim of
improper jurisdiction or lack of venue in connection with any claim or
controversy that may be brought in connection with this Agreement.  Each party hereby agrees that such courts, as
applicable, shall have in personam
jurisdiction with respect to such party, and such party hereby submits to the
personal jurisdiction of such courts.

8.5                                 Assignability;
Third Party Beneficiary.  This Agreement will be binding upon, enforceable by and inure solely to
the benefit of, the parties and their respective permitted successors and
assigns.  This Agreement shall not be
assigned by any party hereto without the prior written consent of the
non-assigning party, provided that Buyer may assign its rights and/or
its obligations hereunder to any Affiliate of Buyer so long as Buyer remains a
guarantor of the obligations assumed by any such Affiliate, and provided,
further, that Buyer may assign its rights and obligations under this
Agreement without the consent of Seller (a) by operation of law in connection
with the merger, consolidation or similar reorganization of Buyer, (b) in
connection with a sale of all or substantially all of the Business, and (c) as
part of a pledge in connection with a financing.  Except
as otherwise expressly provided in this Agreement, nothing in this Agreement
(except for the indemnification of Buyer Indemnitees is intended to or will
confer upon any Person, other than the parties to the Agreement, any right,
benefit or remedy of any nature whatsoever under or by reason of this
Agreement.

8.6                                 Notices.  All
notices and other communications under this Agreement must be in writing and
will be deemed given if delivered personally, faxed, sent by internationally
recognized overnight courier, or mailed by registered or certified mail (return
receipt requested), postage prepaid, to the parties at the following addresses
(or at such other address for a party as such party specifies by like notice):

To Buyer:

Power-One, Inc.

740 Calle Plano

Camarillo, CA 93012

Attention:  General Counsel

Telephone: (805) 987-8741

Fax: (805) 383-5898

Email: randy.holliday@power-one.com

with a copy, which shall not
constitute notice, to:

O’Melveny
& Myers LLP

1999 Avenue of the Stars, Suite 700

Los Angeles, CA 90067

Attention: Allison Keller, Esq.

Telephone: (310) 553-6700

Fax: (310) 246-6779

Email: akeller@omm.com

To Seller, prior to the Closing:

Magnetek,
Inc.

8966 Mason Avenue

Chatsworth, California 91311

Attention:  Tina D. McKnight

 46
 

 

Telephone:
(818) 727-2216

Fax: (818) 886-1523

Email: tmcknight@magnetek.com

To Seller, following the Closing:

Magnetek,
Inc.

N49 W13650 Campbell Drive

Menomenee Falls, Wisconsin 53051

Attention:  General Counsel

Fax: (262) 783-3510

in each case, with a copy, which shall not
constitute notice, to:

Gibson, Dunn & Crutcher
LLP

333 South Grand Avenue

Los Angeles, California
90071

Attention:  Jennifer Bellah Maguire, Esq.

Telephone: (213) 229-7986

Fax: (213) 229-6986

Email: JBellah@gibsondunn.com

All
such notices and other communications will be deemed to have been received (a)
in the case of personal delivery, on the date of such delivery, (b) in the case
of a facsimile, when the party sending such facsimile has a written
confirmation that the transmission was received by the receiver’s facsimile
machine, (c) in the case of delivery by internationally recognized overnight
courier, on the next Business Day following dispatch, (d) in the case of
mailing, on the fifth (5th) Business Day following such mailing, and
(e) in the case of instant electronic communication, on the date of actual
receipt.

8.7                                 Construction.

(a)                                  For purposes of this Agreement, whenever the
context requires: the singular number includes the plural, and vice versa; the
masculine gender includes the feminine and neuter genders; the feminine gender
includes the masculine and neuter genders; and the neuter gender includes the
masculine and feminine genders.

(b)                                 As used in this Agreement, the words “include”
and “including,” and variations thereof, will not be deemed to be terms of
limitation, but rather will be deemed to be followed by the words “without
limitation.”

(c)                                  The titles and captions of the Sections of
this Agreement are included for convenience of reference only and will have no
effect on the construction or meaning of this Agreement.

(d)                                 Except as otherwise indicated, all references
in this Agreement to “Sections” and “Exhibits” are intended to refer to
Sections of this Agreement and Exhibits to this Agreement, and all references
to “Schedules” refer to the Schedules attached to or delivered with this
Agreement, as appropriate.

(e)                                  As used in this Agreement, (i) the word “or”
shall be inclusive and not exclusive, (ii) each reference to “herein”
means a reference to “in this Agreement,” (iii) each reference to “$” or “dollars”
shall be to United States dollars, (iv) each reference to “days” shall be to
calendar days unless 

 47
 

 

“Business Day” is used, (v)
each reference to any Contract shall be to such Contract as amended,
supplemented, waived or otherwise modified from time to time, and
(vi) accounting terms which are not otherwise defined in this Agreement
shall have the meanings given to them under GAAP; provided, that to the
extent that a definition of a term in this Agreement is inconsistent with the
meaning of such term under GAAP, the definition set forth in this Agreement
will control.

8.8                                 Interpretation.  The parties hereto have participated jointly
in the negotiation and drafting of this Agreement.  In the event an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as if
drafted jointly by the parties hereto and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of
any of the provisions of this Agreement. 
Any reference to any federal, state, local or foreign statute or law
shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise.

8.9                                 Counterparts.  This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.

8.10                           Telecopy Execution and Delivery.  The parties may execute and deliver this
Agreement by facsimile or similar electronic transmission device under which
the signature of or on behalf of such party can be seen, and such execution and
delivery will be considered valid, binding and effective for all purposes.

8.11                           Entire Agreement. 
This Agreement and
the other agreements referred to in this Agreement constitute the entire
agreement and supersede all prior agreements and understandings, both written
and oral, among or between any of the parties with respect to the subject
matter hereof and thereof.

8.12                           Equitable Relief;
Cumulative Remedies.  Each of the parties acknowledges and agrees that the other party would
be damaged irreparably in the event any of the provisions of this Agreement are
note performed in accordance with their specific terms or otherwise are
breached.  Accordingly, each of the
parties agrees that the other party will be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically this Agreement and the terms and provisions hereof, in
addition to any other remedy to which they may be entitled, at law or in
equity.  Except only as otherwise
provided herein, any and all remedies herein expressly conferred upon a party
will be deemed cumulative with and not exclusive of any other remedy conferred
hereby, or by law or equity upon such party, and the exercise by a party of any
one remedy will not preclude the exercise of any other remedy.

ARTICLE IX

DEFINITIONS

As used in this Agreement,
the following terms have the following meanings:

“Accounting Firm” is
defined in Section 1.7(b).

“Acquired Shares” is
defined in the background.

“Ancillary Agreements” is defined in Section 1.9(a).

“Acquisition” is
defined in the background.

“Acquisition
Proposal” is defined in Section 5.3(a).

 48
 

 

“Adjusted Tangible Net Worth” means (a) total
assets, excluding (1) goodwill and (2) all deferred Tax assets, minus
(b) total liabilities, in each case calculated as of the Closing Date from the
applicable balance sheet.

“Affiliate”
means a Person who, with respect to another Person, Controls, is Controlled by
or is under common Control with such other Person.

“Agreement”
is defined in the preamble.

“Applicable Rate”
means the “prime rate” as set forth in the Wall
Street Journal, Western Edition on the Closing Date, and if such
publication shall contain more than one “prime rate” on such date, then the
average of such rates.

“Approval” means any
approval, authorization, consent, qualification or registration required to be
obtained from, or any notice, statement, application or other filing required
to be made with, any Governmental Entity or any other Person, or any waiver of
any of the foregoing.

“Assigned Contracts”
means Contracts, bids, quotations and proposals of Seller as of the Closing
Date primarily related to the US Business and all Contracts entered into in the
ordinary course of business between the date hereof and Closing (subject to Article
IV), but in any event excluding those identified as “Non-Assigned Contracts”
on Schedule 1.3.

“Assumed Liabilities”
is defined in Section 1.2.

“Business” is defined
in the background.

“Business Day” means a
day other than a Saturday or Sunday or other day on which commercial banks in
New York are authorized or required by law to close.

“Business Records”
means all correspondence, marketing and sales information, pricing, marketing
plans, business plans, financial statements, financial and business
projections, customer lists, financial books and records and ledgers, sales
order files, purchase order files, engineering order files, production and
quality control records, warranty and repair files, supplier and distributor
lists, studies, surveys, analyses, designs, specifications, and other files and
records of any Company and, to the extent related to the Business or the Group,
Seller, but excluding, to the extent exclusion is required by applicable state
or federal law, (i) any personnel files of any former employee of Magnetek
Italy, and (ii) any personnel files of any employee who does not consent to the
disclosure of his or her personnel file to Buyer.

“Buyer”
is defined in the preamble.

“Buyer
Accounts Receivable” is defined in Section 4.16.

“Buyer Indemnitee” is
defined in Section 7.1(d).

“Claim” is defined in Section
7.1(d).

“Closing”
is defined in Section 1.8.

“Closing
Date” is defined in Section 1.8.

 49
 

 

“Closing Net Indebtedness Amount” means (a)
the aggregate Indebtedness of the Companies, together with the aggregate
Indebtedness of Seller to the extent included in the Assumed Liabilities,
including all long-term debt and the current portion of long-term debt, minus
(b) cash and cash equivalents of the Companies, in each case calculated as of the
Closing from the applicable balance sheet.

“Code”
means the Internal Revenue Code of 1986, as amended, and the
rulings and regulations promulgated thereunder.

“Company” is defined
in the Background.

“Contract”
means any written or oral agreement, contract, subcontract, lease, instrument,
note, option, purchase order, license, sublicense, insurance policy, benefit
plan or legally binding commitment or undertaking of any nature.

“Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of a Person, whether through the ownership
of stock or other equity interests, as an officer, director, trustee or
executor, by contract or otherwise.

“Damages”
is defined in Section 7.1(d).

“Disclosure
Schedule” is defined in the preamble to Article II.

“Dispute” is defined
in Section 8.4(a).

“Employee
Benefit Plans” is defined in Section 2.17(a).

“Encumbrance”
means any option, easement, license, sublicense, deed of trust, covenant, lien,
pledge, collateral assignment, hypothecation, charge, mortgage, security
interest, title retention, conditional sale or other security arrangement, or
any charge, adverse claim of title, ownership or right to use, or any other
encumbrance of any kind whatsoever.

“Environmental
Claim” means any claim, action, litigation, notice of violation,
cause of action, consent order, consent decree, investigation or written notice
by any Person alleging potential liability arising out of, based on or
resulting from (a) the presence or Release of any Hazardous Materials in, on,
from or under any of the Real Properties, any property formerly owned or
occupied by the Business, or any third party location to which Seller or any
Company sent, or caused to be sent, Hazardous Materials or (b) any violation or
alleged violation of any Environmental Law, in each case (a) or (b), occurring
prior to the Closing Date.

“Environmental
Law” means any Legal Requirement relating to pollution or
protection of the environment (including ambient air, surface water, ground
water, land surface or subsurface strata) or natural resources, including any
law or regulation relating to emissions, discharges or releases of Hazardous
Materials or otherwise relating to the manufacture, processing, distribution,
importation, use, treatment, storage, disposal, transport or handling of
Hazardous Materials.

“ERISA”
is defined in Section 2.17(a).

“Escrow
Amount” is defined in Section 4.20.

“Escrow
Agent” is defined in Section 4.20.

“Escrow
Agreement” is defined in Section 4.20.

 50
 

 

“Final Adjusted Tangible Net Worth” is defined
in Section 1.7(a).

“Final Closing Balance Sheet”
is defined in Section 1.7(a).

“Final Closing Net Indebtedness
Amount” is defined in Section 1.7(a).

“Financial
Statements” is defined in Section 2.7.

“GAAP”
means generally accepted accounting principles in the United States applied on
a consistent basis in accordance with Seller’s written policies.

“Governmental
Authorization” means any permit, registration, qualification or
authorization granted or issued by a Governmental Entity.

“Governmental
Entity” means any government or any agency, district, bureau,
board, commission, court, department, official, office, political subdivision,
tribunal or other instrumentality of any government, whether federal, state or
local, domestic or foreign.

“Group” is defined in
the Background.

“Group Assets” means
all rights, properties and assets of every kind and nature, tangible and
intangible, absolute or contingent, currently used primarily (and not merely
incidentally) by Seller or any Company in the operations of the Business.

“Group Employee” means
any Person employed by Seller with respect to the Group, or any Company,
including, without limitation, all regular employees, leased employees,
temporary employees, and part-time employees, and any such person on lay-off,
leave of absence, sick or short-term disability leave.

“Group Intellectual Property”
means all Intellectual Property Rights that are primarily used by Seller or any
Company in connection with the Business.

“Group Liabilities”
means the Liabilities primarily arising out of the operations of the Business.

“Hazardous Materials”
means all materials, wastes or substances defined by, or regulated under, any
Environmental Law as a hazardous waste, hazardous material, hazardous
substance, extremely hazardous waste, restricted hazardous waste, contaminant,
pollutant, toxic waste, or toxic substance, including petroleum, petroleum
products, asbestos, urea, formaldehyde, radioactive materials and
polychlorinated biphenyls.

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

“Indebtedness” of any
Person means, as of any date, the amount equal to the sum (without any
double-counting) of the following obligations (whether or not then due and
payable, but not including all prepayment premiums, penalties, breakage costs,
costs, expenses and other payment obligations that would arise if such
obligations were prepaid in full on such date) to the extent they are of such
Person or guaranteed by such Person: (A) all outstanding indebtedness for
borrowed money owed to third parties, (B) accrued interest payable with respect
to Indebtedness referred to in clause (A), (C) all obligations for the
deferred purchase price of property or services, (D) all obligations evidenced
by notes (including all prepayment penalties), bonds, debentures (including all
prepayment penalties) or other similar 

 51
 

 

instruments, (E) all
obligations arising out of any financial hedging arrangements, (F) obligations
under conditional sale or other title retention agreements related to purchase
d property, and (G) all obligations under capitalized leases.  For the avoidance of doubt, “Indebtedness”
shall not include any obligations under any operating leases.

“Indemnification Threshold” is defined in Section
7.3(a).

“Indemnified
Liabilities” is defined in Section 1.4.

“Indemnified Party” is
defined in Section 7.1(d).

“Indemnifying Party”
is defined in Section 7.1(d).

“Initial Closing Indebtedness Amount”
is defined in Section 1.6.

“Intellectual
Property Rights” means all rights in trademarks and service
marks (including any trade names, brand names, corporate names, d/b/a’s,
assumed names, fictitious names, slogans, logos, trade dress, and business
names in any jurisdiction), whether registered or unregistered, and all
registrations and applications for registration of the foregoing; Internet
domain names and addresses; patents and patent applications (including
provisional patent applications) in any jurisdiction and all reissues,
divisions, continuations, continuations in part, and extensions thereof;
copyrights, copyright registrations and applications for copyright registration
in any jurisdiction and all extensions and renewals thereof; rights in
inventions and invention disclosures; rights in databases, works of authorship,
mask works, trade secrets and confidential information; moral rights; and all
claims for the past or present infringement or misappropriation of the
foregoing.

“Interest Period” is
defined in Section 1.7(c).

“Key Witnesses” is
defined in Section 4.12.

“Knowledge,” means,
with respect to (i) Seller, the actual knowledge that each person set forth on Schedule
2 has, combined with the knowledge that each such person has or would
reasonably be expected to have after performing a reasonable internal
investigation, or (ii) Buyer, the actual knowledge of any of the officers,
directors or other managing personnel of Buyer.

“Leases” is defined in
Section 2.11(b).

“Legal
Proceeding” means any action, suit, litigation, arbitration,
proceeding or hearing, whether administrative, civil or criminal, and whether
at law or in equity, conducted or heard by or before any court or other
Governmental Entity or any arbitrator or arbitration panel.

“Legal
Requirement” means laws, statutes, ordinances, rules,
regulations, decrees, writs, injunctions, judgments, rulings or orders adopted
or promulgated by any Governmental Entity or any treaty or other requirement
having the force of law.

“Liabilities” means
liabilities, Indebtedness, guarantees, obligations or other commitments of any
nature, absolute, accrued, contingent, or otherwise, whether matured or
unmatured, and whether material or not material.

“Made
Available To Buyer” means delivered to Buyer or its counsel or
made available in Seller’s electronic data room.

 52
 

 

“Magnetek Italy” is defined in the Background.

“Material Adverse Change”
or “Material Adverse
Effect,” means any fact, event, change, violation, inaccuracy,
circumstance or effect that is or is reasonably likely to (1) be, individually
or in the aggregate, materially adverse to the business, condition (financial
or otherwise) or results of operations of the Business or the Group, taken as a
whole, (2) materially adversely affect Seller’s ability to perform its
obligations under this Agreement or in connection with the transactions
contemplated hereby or (3) materially adversely affect the enforceability of
this Agreement.  Notwithstanding anything
to the contrary contained in this paragraph, none of the following shall be
deemed, singly or in the aggregate, to constitute a Material Adverse Effect or
Material Adverse Change:  (a) any
failure by the Group to meet projections or forecasts for any period ending on
or after the date of this Agreement; or (b) any adverse change, effect,
event, violation, inaccuracy, circumstance, state of facts or development
resulting from or relating to (directly or indirectly) any of the
following:  (i) the announcement or
pendency of the Acquisition (including any cancellations of or delays in
orders, any reduction in sales, any disruption in supplier, distributor,
partner or similar relationships or any loss of employees); (ii) conditions
affecting the industries in which the Group participate, the U.S. economy as a
whole or foreign economies in any locations where the Group has material
operations or sales, including, without limitation, war or acts of terrorism,
except to the extent that such conditions described in this clause (ii)
disproportionately affects the Business or the Group; (iii) out-of-pocket fees
and expenses (including legal, accounting, investment banking and other fees
and expenses) incurred in connection with the Acquisition; (iv) compliance by
the parties with the terms of, or the taking of any action required by, this
Agreement or (v) any change in accounting requirements or principles or any
change in applicable laws, rules or regulations or the interpretation thereof,
except to the extent that such change in accounting requirements or principles
disproportionately affects the Business or the Group.

“Material Contracts”
is defined in Section 2.13(a).

“Non-Assigned Contract”
means any Contract designated as such on Schedule 1.3.

“Notice of Claim” is
defined in Section 7.5(a).

“Notice of Disagreement”
is defined in Section 1.6(b).

“Owned Properties” is
defined in Section 2.11(a).

“Permitted
Encumbrances” means (i) Encumbrances for Taxes not yet due and
payable, (ii) mechanics’, carriers’, workmen’s, repairmen’s or other like
Encumbrances arising or incurred in the ordinary course of business consistent
with past practice for monies not yet due and payable, (iii) Encumbrances
arising under original purchase price conditional sales contracts and equipment
leases with third parties entered into in the ordinary course of business
consistent with past practice, (iv) other imperfections of title,
restrictions or other Encumbrances, if any, which imperfections of title,
restrictions or other Encumbrances do not, individually or in the aggregate, materially
impair the continued use and operation of or materially detract from the value
of the specific assets to which they relate, and (v) Encumbrances disclosed in
the Financial Statements.

“Pending
Claims” is defined in Section 2.14.

“Person”
means any individual, or any U.S. or non-U.S. corporation, partnership, joint
venture, estate, trust, company (including limited liability company and joint
stock company), association, organization, firm, enterprise or other entity or
any Governmental Entity.

 53
 

 

“Product” means any product manufactured,
leased or sold by or on behalf of Seller or any Company in connection with the
Business.

“Public Software” is
defined in Section 2.10(f).

“Purchase Assets” is
defined in the Background.

“Purchase Price” is
defined in Section 1.5.

“Purchase Price Adjustment”
is defined in Section 1.8(c).

“Real Properties” is
defined in Section 2.11(b).

“Release”
means any release, spill, emission, discharge, leaking, pumping, pouring,
dumping, injection, deposit, disposal, dispersal, leaching or migration of
Hazardous Materials into the environment (including, ambient air, surface
water, groundwater and surface or subsurface strata)/

“Representatives”
of a Person means the officers, directors, employees, agents, attorneys,
accountants, investment bankers, advisors Controlled Affiliates and other
representatives of that Person.

“Required Consents” is
defined in Section 2.5.

“Retained Assets” is
defined in Section 1.3.

“Indemnified Liabilities”
is defined in Section 1.4.

“Seller” is defined in
the preamble.

“Seller Accounts Receivable”
is defined in Section 4.16.

“Seller Indemnitees”
is defined in Section 7.1(d).

“Tax” means, with
respect to Seller and any Company, (i) any and all taxes under all laws
applicable to such Person, including Taxes based upon or measured by gross
receipts, income, profits, sales, use and occupation, and value added,
ad valorem, transfer, franchise, withholding, payroll, recapture,
employment, excise and property Taxes, together with all interest, penalties and
additions imposed with respect to such amounts, (ii) any liability for the
payment of any amounts of the type described in clause (i) as a result of
being a member of an affiliated, consolidated, combined or unitary group for
any period, and (iii) any liability for the payment of any amounts of the
type described in clauses (i) or (ii) as a result of any express or
implied obligation to indemnify any other person or as a result of any
obligation under any agreement or arrangement with any other person with respect
to such amounts and including any liability for Taxes of a predecessor entity.

“Tax
Return” means any return (including any information return) and
any schedule, exhibit or attachment thereto, filed with or submitted to, or
required to be filed with or submitted to, any Governmental Entity in
connection with the determination, assessment, collection, claim for refund or
payment of any Tax or in connection with the administration, implementation or
enforcement of or compliance with any Legal Requirement relating to any Tax.

“Termination Date” is
defined in Section 6.1(a).

“Third Party Claim” is
defined in Section 7.5(a).

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“Transaction Documents”
means (i) the Supply Agreement referenced in Section 5.3(d), (ii) the
Alternative Energy Agreement referenced in Section 5.3(c), (iii) the
Transitional Agreement referenced in Section 5.3(e), (iv) the Ancillary
Agreements, and (v) any other certificate, document or agreement delivered or
executed pursuant to this Agreement or any of the foregoing.

“Transferred Employee” has the
meaning set forth in Section 4.19(a).

“Warranty” means any guaranty,
warranty, remedy (including repair or replacement), liability, limitation,
indemnification matters or similar obligation provided in connection with any
Product.

[Remainder
of page left intentionally blank]

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

 

	
   

  	
  BUYER:

  
	
   

  	
   

  
	
   

  	
  POWER-ONE, INC.,

  
	
   

  	
  a Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William T. Yeates

  	
   

  
	
   

  	
  Name:

  	
  William T. Yeates

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  SELLER:

  
	
   

  	
   

  
	
   

  	
  MAGNETEK, INC.,

  
	
   

  	
  a Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David P.
  Reiland

  	
   

  
	
   

  	
  Name:

  	
  David P. Reiland

  
	
   

  	
  Title:

  	
  Executive Vice President and

  
	
   

  	
   

  	
  Chief Financial Officer

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