TABLE OF CONTENTS

 

			Page
ARTICLE I DEFINITIONS AND TERMS			1
Section 1.1	Definitions		1
Section 1.2	Construction		15
Section 1.3	Exhibits and Seller Disclosure Letter		16
Section 1.4	Knowledge		16
ARTICLE II PURCHASE AND SALE			16
Section 2.1	Purchase and Sale of the Equity Interests		16
Section 2.2	Purchase and Sale of the Purchased Assets		17
Section 2.3	Excluded Assets of the Business		19
Section 2.4	Assumption of Certain Obligations of the Business		20
Section 2.5	Retained Liabilities of the Business		22
Section 2.6	Purchase Price		23
Section 2.7	Purchase Price Adjustment		23
Section 2.8	Purchase Price Allocation		25
Section 2.9	Closing		26
Section 2.10	Further Conveyances		27
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER			27
Section 3.1	Organization and Qualification		27
Section 3.2	Corporate Authority; Binding Effect		27
Section 3.3	Conveyed Entities; Capital Structure		28
Section 3.4	Non-Contravention		28
Section 3.5	Permits		28
Section 3.6	Financial Information; Undisclosed Liabilities		29
Section 3.7	Absence of Certain Changes		29
Section 3.8	No Litigation		30
Section 3.9	Compliance with Laws		30
Section 3.10	Environmental Matters		30
Section 3.11	Material Contracts		30
Section 3.12	Intellectual Property		31
Section 3.13	Real Property		32
Section 3.14	Employee Benefit Plans		32
Section 3.15	Labor Matters		33
Section 3.16	Taxes		34
Section 3.17	Brokers		34
Section 3.18	Title to Purchased Assets; Sufficiency		34
Section 3.19	Tangible Personal Property		35
Section 3.20	Illegal Payments		35
Section 3.21	Government Contracts		35
Section 3.22	Exclusivity of Representations		36

 

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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER			36
Section 4.1	Organization and Qualification		36
Section 4.2	Corporate Authority		36
Section 4.3	Non-Contravention		37
Section 4.4	Permits		37
Section 4.5	Third-Party Approvals		37
Section 4.6	Financial Capability		37
Section 4.7	Securities Act		37
Section 4.8	Investigation by Purchaser; Seller’s Liability		38
Section 4.9	No Litigation		38
Section 4.10	Brokers		38
Section 4.11	Solvency		38
Section 4.12	Confidentiality Agreement		38
Section 4.13	Absence of Arrangements with Management		39
ARTICLE V COVENANTS			39
Section 5.1	Information and Documents		39
Section 5.2	Conduct of Business		40
Section 5.3	Efforts to Close		42
Section 5.4	Antitrust Laws		42
Section 5.5	Non-EU Business Employees and Employee Benefits		43
Section 5.6	EU Business Employees		47
Section 5.7	Wage Reporting		48
Section 5.8	Bulk Transfer Laws		48
Section 5.9	Seller’s Marks		48
Section 5.10	Resale or Other Exemption Certificates		49
Section 5.11	Post-Closing Information		49
Section 5.12	Indemnification of Officers and Directors		50
Section 5.13	Replacement of Certain Obligations		50
Section 5.14	Exclusive Dealing		51
Section 5.15	No Hire and Non-Solicitation of Employees		52
Section 5.16	Post-Closing Obligations for Leases		52
Section 5.17	Purchaser Trademarks and Trade Names		53
Section 5.18	Novation and Assignment of Assumed Contracts		53
Section 5.19	CFIUS Notification		54
Section 5.20	Termination of Intercompany Contracts		55
Section 5.21	Collection of Accounts Receivable		55
Section 5.22	Assumed Liabilities Covered by Tyco Electronics Insurance		55
Section 5.23	Delivery of Product Specifications		55
Section 5.24	Delivery of the Tax Opinion		55
Section 5.25	Cork Sublease		55
ARTICLE VI CONDITIONS PRECEDENT			56
Section 6.1	Conditions to the Obligations of Each Party		56
Section 6.2	Conditions to the Obligations of Purchaser		56

 

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Section 6.3	Conditions to the Obligations of Seller		57
Section 6.4	Frustration of Closing Conditions		58
ARTICLE VII TAX MATTERS			58
Section 7.1	Allocation of Taxes to Seller		58
Section 7.2	Allocation of Taxes to Purchaser		58
Section 7.3	Allocation of Straddle Period Taxes		59
Section 7.4	Tax Returns; Payment of Taxes		59
Section 7.5	Tax Contests		61
Section 7.6	Indemnification		62
Section 7.7	Refunds		64
Section 7.8	Assistance and Cooperation		65
Section 7.9	Tax Records		65
Section 7.10	Dispute Resolution		65
Section 7.11	Payment		66
Section 7.12	Termination of Tax Allocation Agreements		66
Section 7.13	Adjustment		66
Section 7.14	Section 338(h)(10) Election		66
ARTICLE VIII SURVIVAL; INDEMNIFICATION			67
Section 8.1	Survival of Representations and Warranties		67
Section 8.2	Indemnification by Seller		68
Section 8.3	Indemnification by Purchaser		70
Section 8.4	Limitation on Indemnification, Mitigation		70
Section 8.5	Losses Net of Insurance, Etc.		71
Section 8.6	Indemnification Procedure		71
Section 8.7	Third-Party Claims		72
Section 8.8	Sole Remedy/Waiver		73
ARTICLE IX GUARANTEE			73
Section 9.1	Guarantee		73
ARTICLE X TERMINATION			74
Section 10.1	Termination		74
Section 10.2	Effect of Termination		75
ARTICLE XI MISCELLANEOUS			75
Section 11.1	Notices		75
Section 11.2	Joinder		76
Section 11.3	Amendment; Waiver		76
Section 11.4	Assignment		76
Section 11.5	Entire Agreement		76
Section 11.6	Parties in Interest		77
Section 11.7	Public Disclosure		77
Section 11.8	Return of Information		77

 

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Section 11.9	Expenses		77
Section 11.10	Governing Law; Jurisdiction; Waiver of Jury Trial		77
Section 11.11	Counterparts		78
Section 11.12	Headings		78
Section 11.13	No Strict Construction		78
Section 11.14	Severability		78
Section 11.15	Specific Performance		79

 

EXHIBITS

Exhibit A	Specified Accounting Policies; General Ledger Accounts
Exhibit B	Cross License Agreement
Exhibit C	Distribution Agreement
Exhibit D	Supply Agreement
Exhibit E	Transition Services Agreement
Exhibit F	Working Capital Limit Calculations
Exhibit G	Sublease Agreement

 

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STOCK AND ASSET PURCHASE AGREEMENT

 

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

 

W I T N E S S E T H :

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE I

DEFINITIONS AND TERMS

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(f)    all Inventory used primarily in the Business;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(n)   the goodwill of the Business;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(ii)         Liabilities solely related to the Excluded Assets;

 

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

 

(iv)       Excluded Environmental Liabilities;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(c)   If Closing Date Working Capital:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF SELLER

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(vii)      each material joint venture Contract; and

 

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

 

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

 

Section 3.12           Intellectual Property .

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 3.16           Taxes .  (a) With respect to all amounts in respect of Taxes imposed upon Seller, any of the Seller Entities, the Purchased Assets or any of the Conveyed Entities, or for which Seller , any of the Seller Entities or any of the Conveyed Entities are or could be liable, whether to Taxing Authorities or to other Persons (as, for example, under Tax allocation agreements), in each case with respect to all taxable periods or portions thereof ending on or before the Closing Date and relating to the Bus