PURCHASE AND SALE AGREEMENT

Execution Copy
 

_____________________________

PURCHASE AND SALE AGREEMENT
among
Meritor Brazil Holdings, LLC,

Arvin Finance, LLC,
ArvinMeritor de Mexico, S.A. de C.V.,
Meritor LVS Holdings Mexico, LLC,
ArvinMeritor Commercial Vehicle Systems de Mexico, S.A. de C.V.,
Meritor Heavy Vehicle Systems (Mexico), Inc.,
and

ArvinMeritor OE, LLC,
SELLERS;

ArvinMeritor do Brasil Sistemas Automotivos Ltda. AS GUARANTOR

and
Iochpe Maxion S.A.,

Delancre S.A. de C.V., and

Maxion Structural Components USA, Inc.
BUYERS

Dated as of August 4 ^th , 2009
_____________________________

 

ARTICLE I	DEFINITIONS	2
Section 1.1	Specific Definitions	2
Section 1.2	Other Terms	29
Section 1.3	Other Definitional Provisions	29
Section 1.4	Currency and Payments	29
ARTICLE II	PURCHASE AND SALE OF THE ACQUIRED COMPANY SHARES AND THE ACQUIRED US ASSETS	30
Section 2.1	Purchase and Sale of the Acquired Company Shares; Pre Closing Spin-Off Transactions	30
Section 2.2	Purchase and Sale of Acquired US Assets	31
Section 2.3	Excluded Assets	31
Section 2.4	Business Liabilities	31
Section 2.5	Purchase Price and Payment	31
Section 2.6	Adjustment Amounts and Payment	33
Section 2.7	Adjustment Procedure	33
Section 2.8	Allocation of Purchase Price	36
Section 2.9	Closing; Delivery and Payment	37
Section 2.10	Taxes and Fees	38
Section 2.11	Further Assurances	38
Section 2.12	Post Closing Access to Books and Records	39
Section 2.13	Cooperation	39
Section 2.14	Assets Incapable of Transfer	39
ARTICLE III	REPRESENTATIONS AND WARRANTIES OF SELLERS	40
Section 3.1	Organization and Authority	40
Section 3.2	No Conflict	41
Section 3.3	Financial Information	41
Section 3.4	Absence of Certain Changes or Events	42
Section 3.5	Real Property	43
Section 3.6	Business Assets	43
Section 3.7	Litigation	44
Section 3.8	Compliance with Law	44
Section 3.9	Business Contracts	44
Section 3.10	Consents and Approvals	46
Section 3.11	Acquired Company Capital Stock	46
Section 3.12	Employees; Labor Relations	47
Section 3.13	Certain Employee Benefit Plans	47
Section 3.14	Intellectual Property	49
Section 3.15	Brokers and Finders	51
Section 3.16	Environmental Matters	51
Section 3.17	Taxes	52
Section 3.18	Business Receivables	53
Section 3.19	Business Inventory	54
Section 3.20	Business Equipment	54
Section 3.21	Substantial Customers and Suppliers	54
Section 3.22	Acquired Company Guarantees	54
Section 3.23	Bank and Brokerage Accounts	54
Section 3.24	Certain Unlawful Actions	55
Section 3.25	Product Liability and Recall	55
ARTICLE IV	REPRESENTATIONS AND WARRANTIES OF BUYER	55
Section 4.1	Organization and Authority of Buyers	55
Section 4.2	No Conflict	56
Section 4.3	Consents and Approvals	56
Section 4.4	Brokers and Finders	56
Section 4.5	Financial Capability	56
Section 4.6	Investment	57
Section 4.7	Litigation	57
Section 4.8	Payment of Liabilities	57
ARTICLE V	CERTAIN COVENANTS OF SELLERS AND BUYERS	57
Section 5.1	Access and Information	57
Section 5.2	Registrations, Filings, Notices and Licenses	58
Section 5.3	Conduct of Business	60
Section 5.4	Closing Date Financial Information	62
Section 5.5	Intellectual Property	62
Section 5.6	Commercially Reasonable Efforts to Satisfy Conditions	64
Section 5.7	Transition Services Agreement	64
Section 5.8	Disclaimers	65
Section 5.9	Covenant Not to Compete	65
Section 5.10	Nondisclosure	67
Section 5.11	Reserved	68
Section 5.12	Other Obligations Under Certain Contracts Related to the Business	68
Section 5.13	Certain Environmental Procedures	68
Section 5.14	Insurance	69
Section 5.15	Pre-Closing Brazil Spin Off Transactions and Pre-Closing Mexico Employee Transfer Transaction	69
Section 5.16	Cash Management Transactions	69
Section 5.17	Third Party and Intercompany Indebtedness	70
Section 5.18	Statements of Estimated Cash; Estimated Third Party Indebtedness and Net Working Capital Amounts	71
Section 5.19	Intercompany Sellers Account Balances	71
Section 5.20	Transactions with Affiliates	71
Section 5.21	Shared Assets and Shared Intellectual Property	72
Section 5.22	Reserved	73
Section 5.23	No Solicitation of Alternative Business Sale Transaction	73
Section 5.24	Resignations	73
Section 5.25	Methodologies for Preparation of Closing Balance Sheet	74
Section 5.26	Ancillary Agreements	74
Section 5.27	Mexico Conversion	74
ARTICLE VI	TAX MATTERS	74
Section 6.1	Prior Period Returns	74
Section 6.2	Post Closing Returns and Straddle Period Income Tax Returns	74
Section 6.3	Seller’s Indemnity for Tax Matters	76
Section 6.4	Audit Notification and Participation	76
Section 6.5	Certain Refunds	76
Section 6.6	Reserved	77
Section 6.7	Reserved	77
Section 6.8	Cooperation and Information	77
Section 6.9	Disputes	77
Section 6.10	Excluded Tax Liability	77
Section 6.11	Indemnity Procedures	77
ARTICLE VII	EMPLOYEE MATTERS	77
Section 7.1	Provisions Applicable to Brazil Business Employees	78
Section 7.2	Provisions Applicable to Mexico Business Employees	79
Section 7.3	Provisions Applicable to Transferred US Business Employees	81
Section 7.4	No Third Party Beneficiaries	84
Section 7.5	Indemnity Procedures	84
ARTICLE VIII	CONDITIONS TO THE PURCHASE AND SALE	84
Section 8.1	Conditions to the Obligations of Buyers	84
Section 8.2	Conditions to the Obligations of Sellers	85
ARTICLE IX	AMENDMENT AND WAIVER	86
Section 9.1	Amendment and Modification	86
Section 9.2	Waiver	86
ARTICLE X	SURVIVAL AND INDEMNIFICATION	86
Section 10.1	Survival; Knowledge of Breach	86
Section 10.2	Indemnification	87
Section 10.3	Method of Asserting Claims, Etc	88
Section 10.4	Indemnification Amounts	89
Section 10.5	Losses Net of Insurance, Etc	90
Section 10.6	Sole Remedy/Waiver	91
Section 10.7	No Special or Liquidate Damages	91
Section 10.8	Response Acti1ons for Releases of Hazardous Substances	91
Section 10.9	Failure to Close	93
Section 10.10	No Set-Off	93
Section 10.11	Special Procedures for Seller Warranty Liabilities	93
ARTICLE XI	MISCELLANEOUS	94
Section 11.1	Termination	94
Section 11.2	Effect of Termination	94
Section 11.3	Non-Solicitation or Hiring of Management Employees	94
Section 11.4	Return of Information	95
Section 11.5	Collection Excluded Assets and Business Assets	95
Section 11.6	Expenses	96
Section 11.7	Assignment	96
Section 11.8	Entire Agreement; No Third Party Rights	96
Section 11.9	Disclosure Letters	96
Section 11.10	Counterparts	97
Section 11.11	Section Headings	97
Section 11.12	Notices	97
Section 11.13	Governing Law; Mandatory Arbitration	98
Section 11.14	Illegality	100
Section 11.15	Public Announcements	100
Section 11.16	Specific Performance	100
Section 11.17	No Recovery of Special Damages	100
Section 11.18	Attorney Client Privilege	101
Section 11.19	No Recourse	101
Section 11.20	Joint and Several Liability	101
Section 11.21	Guarantee	101

 

Appendices
Appendix A	Brazil Shares and Mexico Shares
Appendix B	Business Locations; Owned Business Real Property, Leased Business Real Property and Business Fee Warehouse Space
Appendix C	Business Computer Software and Software Licenses
Appendix D	Business Intellectual Property
Appendix E	Certain Excluded Computer Software and Software Licenses and Computer Hardware
Appendix F	Certain Excluded Contracts and Other Assets
Appendix G	Reserved
Appendix H	Knowledge Definition (Buyers and Sellers)
Appendix I	Net Working Capital Adjustments
Appendix J	Pro Forma Net Working Capital Statement
Appendix K	Pre-Closing Brazil Spin Off Transactions and Pre-Closing Brazil Spin Off Agreements and Instruments
Appendix L	Pre-Closing Mexico Employee Transfer Transaction and Pre-Closing Mexico Employee Transfer Agreements and Instruments
Appendix M	Business Employees
Appendix N	Permitted Encumbrances
Appendix O	Initial Allocation of Purchase Price
Appendix P	Methodologies for Preparation of Closing Balance Sheet
Appendix Q	Methodologies for Preparation of Adjustment Items Statements
Appendix R	Brazil Insurance Policies
Appendix S	Liquidated Fee

 

Exhibits
Exhibit A	Bill of Sale and General Instrument of Transfer
Exhibit B	Assignment and Assumption Agreement
Exhibit C	Transition Services Agreement
Exhibit D	Brazil Lease
Exhibit E	Brazil Services Agreement
Exhibit F	Trademark License Agreement
Exhibit G	Shared Intellectual Property License Agreement

 

 

                 THIS PURCHASE AND SALE AGREEMENT is made and entered into as of August 4 ^th , 2009 by and between:

Meritor Brazil Holdings, LLC, a Delaware limited liability company enrolled before the Brazilian Taxpayers` Registry ( CNPJ/MF ) under no. 09.621.045/0001-58 (“ Seller Brazil 1 ”), Arvin Finance, LLC, a Delaware limited liability company enrolled before the Brazilian Taxpayers` Registry ( CNPJ/MF ) under no. 09.583.490/0001-70 (“ Seller Brazil 2 ” and together with Seller Brazil 1, the “ Sellers Brazil ”), ArvinMeritor de Mexico, S.A. de C.V., a Mexican corporation (“ Seller Mexico 1 ”), Meritor LVS Holdings Mexico, LLC, a Delaware limited liability company (“ Seller Mexico 2 ”), ArvinMeritor Commercial Vehicle Systems de Mexico, S.A. de C.V., a Mexican corporation (“ Seller Mexico 3 ”), and Meritor Heavy Vehicle Systems (Mexico), Inc., a Delaware corporation (“ Seller Mexico 4” and together with Seller Mexico 1, Seller Mexico 2, and Seller Mexico 3, the “ Sellers Mexico ”), and ArvinMeritor OE, LLC, a Delaware limited liability company (“ Seller US ” and, together with Sellers Brazil and Sellers Mexico, the “ Sellers ”), and ArvinMeritor do Brasil Sistemas Automotivos Ltda., a Brazilian limited liability company enrolled before the Brazilian Taxpayers` Registry ( CNPJ/MF ) under no. 56.669.187/0001-75 (“ Guarantor” ) and

Iochpe Maxion S.A., a Brazilian corporation enrolled before the Brazilian Taxpayers’ Registry ( CNPJ/MF ) under no. 61.156.113/0001-75 (“ Buyer Brazil ” and “ Buyer Mexico 2 ”), Buyer Brazil , Delancre S.A. de C.V., a Mexican company (“ Buyer Mexico 1 ” and together with Buyer Mexico 2, the “ Buyers Mexico ”), and Maxion Structural Components USA, Inc., a Florida company (“ Buyer US ” and, together with Buyer Brazil and Buyers Mexico, the “ Buyers ”).

Capitalized terms used herein and not otherwise defined herein have the respective meanings set forth or referred to in Article I .

BACKGROUND

A.     Sellers Brazil own all of the Brazil Shares of the Acquired Brazil Company. Sellers Mexico own all of the Mexico Shares of the Acquired Mexico Companies. Seller US owns all of the Acquired US Assets.

B.     Sellers desire to sell, transfer and assign to Buyers, and Buyers desire to purchase from Sellers, and accept the transfer and assignment of, the Acquired Company Shares and the Acquired US Assets, and to assume the Business Liabilities, all on the terms and subject to the conditions set forth in this Agreement, and by means of such acquisition, Buyers shall acquire the Business from the Sellers as contemplated herein.

C.     Prior to the Closing, Sellers Brazil are pursuant to the terms hereof engaging in certain transactions, as set forth in Appendix K, to separate the part of the Business conducted by ARM Brazil, the Brazil Business Assets and the Brazil Business Liabilities from the other businesses, assets and liabilities of ARM Brazil pursuant to a statutory spin off pursuant to the Pre-Closing Brazil Spin Off Transactions Agreements and Instruments.

D.     Prior to the Closing, ARM Servicios Mexico is, pursuant to the terms hereof, transferring, as set forth in Appendix L, the Mexico Employees to Acquired Mexico Servicios Company pursuant to the Pre-Closing Mexico Employee Transfer agreements and Instruments.

E.     Also prior to the Closing, Acquired Mexico Operating Company may be converted from an S.A. de C.V. to an S. de R.L. de C.V.

TERMS

In consideration of the mutual covenants and undertakings contained in this Agreement, and subject to and on the terms and conditions set forth in this Agreement, and intending to be legally bound by this Agreement, the Parties agree as follows:

ARTICLE 1

DEFINITIONS

 

     Section 1.1      Specific Definitions . As used in this Agreement and any Appendix or Exhibit to this Agreement, the following capitalized terms have the meanings set forth or referred to in this Section.

“ Acquired Brazil Company ” means Meritor Comércio e Indústria de Sistemas Automotivos Ltda., enrolled before the Brazilian Taxpayers’ Registry ( CNPJ/MF ) under no. 09.603.244/0001-33.

“ Acquired Companies ” means the Acquired Brazil Company and the Acquired Mexico Companies. “ Acquired Company ” means any one of them as the context indicates.

“ Acquired Company Assets ” means all Business Assets owned by an Acquired Company (and in the case of Acquired Brazil Company also includes assets and claims as to which title registration procedures and judicial transfer procedures, respectively, are pending completion in connection with the Pre-Closing Brazil Spin Off Transactions) at the Effective Time.

“ Acquired Company Shares ” means the Brazil Shares and the Mexico Shares.

“ Acquired Mexico Companies ” means the Acquired Mexico Operating Company and the Acquired Mexico Servicios Company.

“ Acquired Mexico Operating Company ” means prior to the Conversion, Meritor LVS S.A. de C.V., or after the Conversion Meritor LVS S. de R.L. de C.V.

“ Acquired Mexico Servicios Company ” means Servicios Corporativos ArvinMeritor S.A. de C.V.

“ Acquired US Assets ” means all Business Assets owned by Seller US at the Effective Time.

“ Adjustment Items ” shall have the meaning set forth in Section 2.7(e) .

“ Affiliate ” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, such other Person at any time during the period for which the determination of affiliation is being made. For purposes of this definition, the term “control” (including the correlative meanings of the terms “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of management policies of such Person, whether through the ownership of voting securities or by contract or otherwise.

“ Agreement ” means this Purchase and Sale Agreement, the Appendices, the Sellers Disclosure Letter and the Buyers Disclosure Letter.

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

“ Ancillary Agreements ” means the Assumption Agreement, the Bill of Sale, the Brazil Lease, the Brazil Services Agreement, the Shared Intellectual Property License Agreement, the Trademark License Agreement and the Transition Service Agreement.

“ Appropriate Remediation Standard ” shall have the meanings set forth in Section 10.8(d) .

“ Antitrust Division ” means the Antitrust Division of the United States Department of Justice.

“ ARM Brazil ” means ArvinMeritor do Brasil Sistemas Automotivos Ltda, a limited liability company organized and existing under the laws of Brazil.

“ ARM Servicios Mexico ” means ArvinMeritor Mexicana S.A. de C.V, a corporation organized and existing under the laws of Mexico.

“ Assumed Liabilities ” means:

(i)     all Business Liabilities that relate to Seller US, the Acquired US Assets, the US Location or the portions of the Business conducted by Seller US at the US Location or elsewhere; and

(ii)     all of the Business Liabilities to the extent they do not constitute Brazil Business Liabilities or Mexico Business Liabilities.

In the case of each of (i) and (ii), excluding the Excluded Liabilities.

“ Assumption Agreement ” means the Assignment and Assumption Agreement between Buyer US and Seller US in substantially the form attached as Exhibit B to be executed and delivered at the Closing.

“ Audit ” shall mean an examination, audit, assessment, reassessment or other proceeding conducted by a Governmental Authority relating to any Tax matter.

“ Base Amount ” shall have the meaning set forth in Section 2.5(a) .

“ Benefit Plans ” shall have the meaning set forth in Section 3.13(b) .

“ Bill of Sale ” means the Bill of Sale and General Instrument of Transfer between Seller US and Buyer US in substantially the form attached as Exhibit A to be executed and delivered at the Closing.

“ Brazil Business Assets ” means all the Business Assets owned by the Acquired Brazil Company (or ARM Brazil if prior to the completion of the Pre-Closing Brazil Spin Off Transactions) or to which the Acquired Brazil Company (or ARM Brazil if prior to the completion of the Pre-Closing Brazil Spin Off Transactions) has rights.

“ Brazil Business Employees ” shall have the meaning set forth in Section 7.1(a) .

“ Brazil Business Liabilities ” means all of the Business Liabilities that relate to the Acquired Brazil Company, ARM Brazil but excluding the Excluded Liabilities, the Brazil Business Assets, the Brazil Location or the portion of the Business conducted by the Acquired Brazil Company or ARM Brazil at the Brazil Location or elsewhere.

“ Brazil Insurance Policies ” mean the insurance policies listed on Appendix R .

“ Brazil Labor Laws ” shall have the meaning set forth in Section 7.1(c) .

“ Brazil Lease ” means the Lease Agreement between Acquired Brazil Company and ARM Brazil in substantially the form attached as Exhibit D to be executed and delivered at the Closing.

“ Brazil Location ” means the Owned Business Real Property and the Leased Business Real Property located in the city of Limeira, Brazil and more fully described on Appendix B .

“ Brazil Services Agreement ” means the Services Agreement between Acquired Brazil Company and ARM Brazil in substantially the form attached as Exhibit E to be executed and delivered at the Closing.

“ Brazil Shares ” means the outstanding shares of Acquired Brazil Company as indicated on Appendix A .

“ Business ” means the business of designing and manufacturing steel wheels to which a pneumatic tire is to be applied for passenger cars, light- and medium-duty trucks and sport utility vehicles under the Fumagalli brand name as conducted (i) by the Acquired Companies and Seller US as of the Effective Time and, (ii) by Pre-Restructuring Companies and Seller US as of the date hereof.

“ Business Assets ” means any assets of a Seller or any of its Affiliates (including the Acquired Companies) that are Related to the Business (whether or not owned by or titled in the name of the Sellers or any of their Affiliates (including an Acquired Company), to the extent any of the Sellers or any of their Affiliates (including an Acquired Company) have any right, title or interest over such asset) regardless of whether any such asset is set forth in Sellers Disclosure Letter or it is otherwise an exception to any representation, warranty or covenant contained in this Agreement, other than the Excluded Assets. Without limiting the generality of the foregoing, the Business Assets include the following, except to the extent any of the following are the Excluded Assets:

(i)     Cash held by the Acquired Companies but not including Cash held by Seller US;

(ii)     the Owned Business Real Property;

(iii)    subject to Section 2.14 , the Acquired Company’s, Pre-Restructuring Companies’, or Seller US’s respective rights in the Leased Business Real Property and the Business Fee Warehouse Space;

(iv)    the Business Inventory;

(v)     the Business Receivables;

(vi)    the Business Tangible Personal Property;

(vii)   all rights of an Acquired Company, Pre-Restructuring Companies or Seller US in Customer and Supplier Tooling;

(viii)  subject to Section 2.14 , the Business Intellectual Property;

(ix)   subject to Section 2.14 , the Business Contracts and the Acquired Company’s, Pre-Restructuring Companies’ or Seller US’s rights under the Business Contracts;

(x)    subject to Section 2.14 , the Acquired Company’s, Pre-Restructuring Companies’ or Seller US’s rights to the Business Computer Software and Software Licenses;

(xi)   all sales order files, distributor files, engineering and product files, purchase order files, manufacturing records, client and customer lists, supplier lists, pricing information, sales and promotional literature, and business files that are located at the Business Locations and are Related to the Business and books and records pertaining to the Business Employees (except to the extent relating to Excluded Liabilities), to the extent the same are not required under applicable Laws to be retained by a Seller (the “ Business Books and Records ”); subject to Section 2.12 in connection with access to and use of the Intellectual Property contained therein;

(xii)  the Brazil Insurance Policies and rights and claims thereunder to the extent not primarily relating to the Excluded Assets or the Excluded Liabilities; 

(xiii)  subject to Section 2.14 , all claims and counterclaims by an Acquired Company, Pre-Restructuring Companies or Seller US against any other Person as to express and implied warranties from manufacturers, vendors and suppliers, if any, to the extent they are Related to the Business, related to the Business Assets or the Business Liabilities (but only to the extent any such claim does not relate to, or constitute a defense or counterclaim as to, any Excluded Asset or Excluded Liability);

(xiv)  all Permits held by Acquired Brazil Company or ARM Brazil Related to the Business and all Permits held by the Acquired Mexico Companies or ARM Servicios Mexico Related to the Business;

(xv)  subject to Section 2.14 , all claims (other than as set forth in clause (viii) of the definition of Excluded Assets) , counterclaims, deposits, refunds and prepaid items, in each case related to the Business Assets, Related to the Business or related to the Business Liabilities and to the extent the same do not primarily relate to any of the Excluded Assets and do not primarily relate to, or constitute a defense or counterclaim as to, any Excluded Liability (it being understood that if a claim relates, but not primarily, to an Excluded Asset, including as a defense or counterclaim as to any Excluded Liability, the rights to the portion of such claim relating to the Excluded Asset or the Excluded Liability, as applicable, shall remain with the Sellers); 

(xvi)  all Intercompany Acquired Company Indebtedness owed to Seller US or any Acquired Company by an Acquired Company or Seller US; 

(xvii)  all Intercompany Acquired Company Account Balances owed to Seller US or any Acquired Company by an Acquired Company or Seller US;

(xviii)  the telephone numbers and fax numbers Related to the Business, and the goodwill and going-concern value of the Business; and

(xix)  all asserted or unasserted causes of action, lawsuits, judgments, claims and demands of any nature that arose or arise or relate to events that occur prior to, at or following the Effective Time if the same are Related to the Business (including those which arose, arise out of, or are related to, any of the Business Assets, whether arising by way of counterclaim or otherwise), but only to the extent the same do not relate to the Excluded Assets (it being understood that if a cause of action, lawsuit, judgment, claim and demand relates, but not primarily, to an Excluded Asset the rights to the portion thereof relating to the Excluded Asset or the Excluded Liability, as applicable, shall remain with the Sellers).

“ Business Books and Records ” shall have the meaning set forth in the definition of Business Assets.

“ Business Computer Software and Software Licenses ” means the computer software owned by an Acquired Company, Seller US or a Pre-Restructuring Company that is exclusively used or held for use in the Business and the software licenses including those identified on attached Appendix C .

“ Business Contract ” or “ Business Contracts ” means all contracts, agreements, open purchase orders, leases, subleases, licenses or commitments, written or oral, to the extent Related to the Business. For greater clarity, while the term Business Contracts includes “Shared Contracts” to the extent Related to the Business for purposes of affording certain rights to Buyer US or the Acquired Companies to the extent permitted under the Shared Contracts and Buyer US and the Acquired Companies being responsible for Liabilities under the Shared Contracts to the extent relating to the Business, the Parties do not intend that the Shared Contracts will be assigned or transferred to Buyer US or the Acquired Companies.

“ Business Day ” means any day other than a Saturday, a Sunday or a day on which banks in any of the State of Michigan, United States, São Paulo, Brazil or the Federal District of Mexico are authorized or obligated by Law to not open or remain closed.

“ Business Employees ” means the Brazil Business Employees, the Mexico Business Employees and the Transferred US Business Employees.

“ Business Fee Warehouse Space ” means the fee warehouse space described on Appendix B .

“ Business Intellectual Property ” means the Intellectual Property owned by an Acquired Company, Seller US or a Pre-Restructuring Company that is exclusively used or held for use in the Business, including that described on Appendix D . For greater certainty, Business Intellectual Property does not include the Parent Trademarks and Logos.

“ Business Inventory ” all inventory owned by an Acquired Company, Seller US or a Pre-Restructuring Company that is both (a) located at a Business Location or a Business Fee Warehouse Space, or in transit to a Business Location or a Business Fee Warehouse Space or a client of the Business; and (b) Related to the Business, in any case as of any determination date under this Agreement, all determined in accordance with the Practices and Procedures.

“ Business Liabilities ” means all Liabilities of an Acquired Company, Seller US or a Pre-Restructuring Company, or any of their Affiliates or as to which any of them may be responsible, that arise or have arisen out of, or relate or are or were related to, directly or indirectly, any of the following (whether now existing or hereafter arising and whether arising out of occurrences, events or incidents occurring before, on or after the Effective Time, and whether primary or secondary, direct or indirect, known or unknown, fixed or contingent), and in any case other than the Excluded Liabilities:

(i)     all Liabilities to the extent based upon, arising out of or relating to the operation of the Business; and

(ii)    all Liabilities to the extent based upon or arising out of or relating to the Business Assets or Business Locations; and, for greater certainty and without limitation of the Liabilities described or included in clause (i) or (ii) of this definition, and whether or not otherwise included in clause (i) or (ii) of this definition, the following Liabilities:

(iii)   all Liabilities to be assumed or for which a Buyer or an Acquired Company is to be responsible under Article VI or Section 11.6 ;

(iv)   all Liabilities to be assumed or for which a Buyer or an Acquired Company is to be responsible under Article VII ;

(v)    all Liabilities based upon, arising out of or relating to (A) the presence of, Release of, threatened Release of or exposure of any Person to any Hazardous Substances on, at, beneath or from any of the Business Locations or any of the Business Assets; (B) the transportation, treatment, storage, handling, or disposal or arrangement for transportation, treatment, storage, handling or disposal of any Hazardous Substances on, at or beneath any of the Business Locations or from any of the Business Locations to any off-site locations; and (C) any violation of Environmental Law Related to the Business, in each case other than Excluded Environmental Liabilities;

(vi)   all Liabilities for breach of warranty and other Liabilities with respect to any products or services of the Business except for Excluded Warranty Liabilities and except for Liabilities for recall and product liability claims since those Liabilities are subject to clause (vii) or (viii) and not this clause (vi);

(vii)  all Liabilities arising from any recall with respect to any products of the Business, other than the Excluded Recall Liabilities;

(viii) all Liabilities arising from any claim by a third party seeking to recover damages for personal injury or property damage caused by a defective product of the Business, except for the Excluded Product Liability Claims;

(ix)   Subject to Article II of this Agreement, all Liabilities included in, based upon, arising out of or relating to the Third Party Indebtedness included in the Final Closing Indebtedness Amount;

(x)   Subject to Article II of this Agreement, all trade and non-trade payables and other Liabilities included in or taken into account in the Final Closing Balance Sheet;

(xi)   Subject to Article II of this Agreement, all Liabilities included in the Intercompany Acquired Company Indebtedness;

(xii)  Subject to Article II of this Agreement, all Liabilities included in the Intercompany Acquired Company Account Balances;

(xiii) all Liabilities relating to the Customer and Supplier Tooling, to the extent such (or the interest therein) Customer and Supplier Tooling is transferred to Buyers;

(xiv)  all Liabilities related to the Business based upon, arising out of or relating to all asserted and unasserted causes of action, lawsuits, or court, arbitral or Governmental Authority proceedings, other than the Excluded Lawsuits and Proceedings, it being understood that if a Liability described in this clause (xiv) relates to any of the Excluded Liabilities or Excluded Assets, then the obligation with respect to that portion of such Liability relating to the Excluded Liabilities or Excluded Assets shall remain with the Sellers);

(xv)  all Liabilities related to the Business based upon, arising out of or relating to any violation of any Law, other than the Excluded Violations of Law; it being understood that if a Liability described in this clause (xv) relates to any of the Excluded Liabilities or Excluded Assets, then the obligation with respect to that portion of such Liability relating to the Excluded Liabilities or Excluded Assets shall remain with the Sellers);

(xvi) all Liabilities based upon, arising out of or relating to Business Contracts (including any primary, secondary, contingent or other obligations, such as under guaranties or indemnities, in respect of the Business Contracts), including Liabilities arising out of any breaches or violations and Liabilities to make payments or otherwise in connection with the termination thereof as a result of the transactions contemplated by this Agreement or otherwise and including Liabilities in respect of Shared Contracts (in any such case, other than Excluded Business Contract Claims);

(xvii) all intellectual property infringement Liabilities, to the extent based upon, arising out of or relating to any products manufactured or sold or methods used by the Business after the Effective Time, other than the Excluded Infringement Claims;

(xviii)   in the case of Acquired Brazil Company, all Liabilities of the Acquired Brazil Company incurred pursuant to the Pre-Closing Brazil Spin Off Agreements and Instruments; and

(xix)     in the case of Acquired Mexico Company, all Liabilities of the Acquired Mexico Company incurred pursuant to the Pre-Closing Mexico Employee Transfer Agreements and Instruments.

“ Business Locations ” means the Brazil Location, the Mexico Location and the US Location and “ Business Location ” means the applicable one as the context indicates.

“ Business Receivables ” means the trade accounts receivable owned by an Acquired Company, Seller US or a Pre-Restructuring Company that are Related to the Business, as of any determination date under this Agreement, excluding any such trade accounts receivables for products or services provided by an Acquired Company, Pre-Restructuring Companies or Seller US to a Seller or an Affiliate of a Seller (including any other Acquired Company), as determined in accordance with the Practices and Procedures.

“ Business Tangible Personal Property ” means all of the equipment, machinery, dies, molds, tooling (but excluding Excluded Tooling and Customer and Supplier Tooling), furniture, fixtures, supplies and other tangible personal property owned by an Acquired Company, Seller US or a Pre-Restructuring Company that are both (i) located at a Business Location, at a supplier’s place of business, or at a Business Fee Warehouse Space and (ii) are Related to the Business. For clarification, Business Tangible Personal Property does not include the Business Inventory.

“ Buyer Brazil ” has the meaning set forth in the preamble.

“ Buyers Mexico” has the meaning set forth in the preamble.

“ Buyer Parties ” shall have the meaning set forth in Section 10.2(a) .

“ Buyer US ” has the meaning set forth in the preamble.

“ Buyer US’s Benefit Plans ” shall have the meaning set forth in Section 7.1(c)(i) .

“ Buyers ” shall have the meaning set forth in the preamble.

“ Buyer Brazil ” has the meaning set forth in the preamble.

“ Buyers Disclosure Letter ” means the disclosure letter delivered by Buyers to Sellers concurrently with the execution and delivery of this Agreement, as such disclosure letter may be updated in accordance with the terms hereof.

“ Buyer Termination Fee ” shall have the meaning set forth in Section 10.9(b) .

“ Buyers Trigger ” shall have the meaning set forth in Section 10.9(b) .

“ Cap Amount ” shall have the meaning set forth in Section 10.4 .

“ Cash ” means (i) all cash and cash equivalents, wherever located, including bank balances and cash and cash equivalents in bank accounts, monies in the possession of any banks, savings and loans or trust companies and similar cash items on hand at the Effective Time and (ii) investment securities and other short term (defined as having maturities of 90 days or less) investments.

“ Cash Adjustment Amount ” shall have the meaning set forth in Section 2.6(b) .

“ Claim Notice ” shall have the meaning set forth in Section 10.3 .

“ Claim Threshold ” shall have the meaning set forth in Section 10.4 .

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

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

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

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

“ Closing Date Interest Rate ” means six percent (6.0%) per annum.

“ Closing Indebtedness Amount ” shall have the meaning set forth in Section 2.7(c)(ii) .

“ Closing Intercompany Sellers Account Balances ” has the meaning set forth in Section 2.7(c)(iii) .

“ Closing Intercompany Sellers Indebtedness ” shall have the meaning set forth in Section 2.7(c)(iv) .

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

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

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

“ Closing Payment ” has the meaning set forth in Section 2.5(b)(i) .

“ COBRA ” shall have the meaning set forth in Section 7.3(d) .

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

“ Collateral Source ” shall have the meanings set forth in Section 10.5 .

“ Competition Law Filings ” shall have the meaning set forth in Section 5.2(b) .

“ Confidential Information ” means any and all of the following information in any form, and howsoever obtained, whether in writing, orally, electronically, visually or otherwise, or otherwise made available by observation, inspection, or otherwise:

(i)     all information that is a trade secret under applicable trade secret law;

(ii)    all information concerning prices, product specifications, data, know-how, formulae, compositions, processes, designs, sketches, photographs, graphs, drawings, samples, inventions and ideas, past, current and planned research and development, current and planned manufacturing or distribution methods and processes, customer lists or identities, current and anticipated customer requirements, price lists, market studies, business plans, computer hardware and software and database technologies, systems, structures and architectures;

(iii)   all information concerning the business and affairs of the Person in question (which includes historical and current financial statements, financial projections and budgets, tax returns and accountants’ materials, historical, current and projected sales, capital spending budgets and plans, business plans, strategic plans, marketing and advertising plans, publications, client and customer lists and files, contracts, the names and backgrounds of key personnel and personnel training techniques and materials, however documented);

(iv)  all information in documents or other materials marked “confidential” or “proprietary;”

(v)  all information provided by a third party that is subject to any known duty of confidentiality; and

(vi)  all notes, analyses, compilations, studies, summaries and other material to the extent containing or based, in whole or in part, upon any information included in the foregoing parts of this definition.

“ Confidentiality Agreement ” shall have the meaning set forth in Section 5.1(b) .

“ Copyrights ” shall have the meaning set forth in the definition of “Intellectual Property”.

“ CPA Firm ” shall have the meaning set forth in Section 2.7(g) .

“ Customer and Supplier Tooling ” means all tooling owned by a customer of or supplier to the Business and as to which an Acquired Company or Seller US has any right or Liability.

“ Deductible Amount ” shall have the meaning set forth in Section 10.4 .

“ Dispute ” shall have the meaning set forth in Section 11.13(a) .

“ Effective Time ” means 12:01 A.M. in São Paulo, Brazil, Troy, Michigan or Federal District of Mexico, as applicable, on the Closing Date.

“ Eligible US Business Employees ” shall have the meaning set forth in Section 7.3(a) .

“ Encumbrances ” means any liens, charges, restrictions on transfer, encumbrances, hypothecations, security interests, pledges, mortgages, adverse monetary claims of any kind or any other encumbrance.

“ Environment ” means all air, surface water, groundwater, or land or related ecosystems, including land surface, soil, strata and subsurface, including all fish, wildlife, biota and all other natural resources.

“ Environmental Authority ” means any authority, agency or body having responsibility for Hazardous Substances under Environmental Law.

“ Environmental Law ” means any Law, authorization, Permit, judgment, decree or injunction from or of any Governmental Authority (including common laws) relating to (a) the protection of public health or the protection or pollution of the Environment or (b) the presence, transportation, recycling, storage, treatment, use, handling, removal, reclamation, disposal, Release or threat of Release, Management of or exposure to Hazardous Substances, in each such case which has the force of law and is in force at the date of this Agreement or the Closing Date.

“ Environmental Permits ” shall have the meaning set forth in Section 3.16(a) .

“ Environmental Reports ” has the meaning set forth in Section 3.16 .

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

“ ERISA Affiliate ” shall have the meaning set forth in Section 3.13(b)(ii)(B) .

“ Estimated Cash Amount ” shall have the meaning set forth in Section 5.18 .

“ Estimated Indebtedness Amount ” shall have the meaning set forth in Section 5.18 .

“ Estimated Net Working Capital Amount ” shall have the meaning set forth in Section 5.18 .

“ Excluded Assets ” means any assets of a Seller or any of its Affiliates (including the Acquired Companies) that are not Related to the Business (whether or not owned by or titled in the name of an Acquired Company, ARM Brazil prior to completion of the Pre-Closing Brazil Spin Off Transactions or ARM Servicios Mexico prior to completion of the Pre-Closing Mexico Employee Transfer Transaction and whether or not an Acquired Company, ARM Brazil or ARM Servicios Mexico shall have any right, title or interest). Without limiting the generality of the foregoing, the Excluded Assets include the following (including any of the following to the extent any Acquired Company, Seller US, ARM Brazil or ARM Servicios Mexico shall have any right, title or interest):

(i)     Cash held by Seller US;

(ii)     all refunds, overpayments, payments or deposits of Taxes to the extent that the refunds, overpayments, payments or deposits of Taxes relate to an Excluded Liability or an Excluded Asset or the right to receive such refund or such deposit is not included as a current asset on the Final Closing Balance Sheet; all Tax Returns of Sellers and their Affiliates other than the Acquired Companies;

(iii)   except as expressly provided in Article VII , all Seller Benefit Plans and assets and rights relating to the Seller Benefit Plans;

(iv)   all Excluded Intellectual Property;

(v)   all Parent Trademarks and Logos;

(vi)   all Excluded Computer Software and Software Licenses;

(vii)  all rights or benefits pursuant to any insurance policies (intercompany, self-insurance or otherwise and, for greater certainty, rights and benefits under the Brazil Insurance Policies to the extent relating to the Excluded Assets or the Excluded Liabilities), except as to any of the forgoing all rights to refunds of insurance payments, premiums or deposits;

(viii)  other than as set forth in clause (xv) of the definition of Business Assets, all asserted or unasserted causes of action, lawsuits, judgments, claims and demands of any nature that arose or arise or relate to events that occur prior to, at or following the Effective Time if the same are not Related to the Business (including those which arose, arise out of, or are related to, any of the Excluded Assets, whether arising by way of counterclaim or otherwise) (it being understood that if a claim relates to the Business, but is not Related to the Business, the right to the portion of such claim relating to the Business shall remain with the Sellers);

(ix)   all Permits, including Environmental Permits, which are held by Seller US;

(x)   all (a) Books and Records other than the Business Books and Records and (b) Business Books and Records which primarily relate to an Excluded Asset or an Excluded Liability or which a Seller or any of its Affiliates (other than an Acquired Company) are required to retain pursuant to Law;

(xi)  any rights to corporate resources and services provided to the Acquired Companies or the Business by a Seller or any of its Affiliates (other than an Acquired Company), including corporate, legal, insurance, human resources, finance, accounting, tax, treasury, internal audit, communications, facilities management, environmental, engineering, employee safety, business intelligence, flight operations and administrative services (for greater certainty, the inclusion of the foregoing as Excluded Assets does not impair any rights of Buyers or the Acquired Companies under the Transition Services Agreement); and

(xii)  all Contracts, assets and rights that (a) are not Related to the Business or (b) are listed in Appendix F .

“ Excluded Brazil Labor Liabilities ” has the meaning set forth in Section 7.1(d) .

“ Excluded Business ” means any business conducted by Seller US or ARM Brazil at the Effective Time other than the Business.

“ Excluded Business Contract Claims ” has the meaning set forth in the definition of Excluded Liabilities.

“ Excluded Computer Software and Licenses ” means all computer software owned by Sellers or any of their Affiliates (including the Acquired Companies) and software licenses, other than the Business Computer Software and Software Licenses. Without limiting the generality of the foregoing, the Excluded Computer Software and Software Licenses include the items listed on attached Appendix E .

“ Excluded Environmental Liabilities ” has the meaning set forth in the definition of Excluded Liabilities.

“ Excluded Infringement Claims ” has the meaning set forth in the definition of Excluded Liabilities.

“ Excluded Intellectual Property ” means all Intellectual Property owned by Sellers or any of their Affiliates (including the Acquired Companies) other than Business Intellectual Property. The Excluded Intellectual Property also includes the Parent Trademarks and Logos.

“ Excluded Labor Liabilities ” has the meaning set forth in the definition of Excluded Liabilities.

“ Excluded Lawsuits and Proceedings ” has the meaning set forth in the definition of Excluded Liabilities.

“ Excluded Liabilities ” means the following Liabilities of Seller or any Affiliate of Seller (including Seller US, an Acquired Company, ARM Brazil or ARM Servicios Mexico), regardless of whether any such Liability is set forth in Sellers Disclosure Letter or it is otherwise an exception to any representation, warranty or covenant contained in this Agreement:

(i)     all Liabilities to the extent based upon, arising out of, or relating to, the Excluded Business or the Excluded Assets and for the avoidance of doubt all Liabilities to the extent not based upon, arising out of, or relating to the Business Assets or the Business Liabilities;

(ii)   subject to Section 10.8, all Liabilities with respect to any Response Action required by any applicable Environmental Law or any Governmental Authority to be performed by a Buyer or one of the Acquired Companies with respect to (A) the presence of, Release of, or threatened Release of or exposure of any Person to any Hazardous Substances on, at, beneath or from any location owned, leased or operated by any of the Acquired Companies or any of the Pre-Restructuring Companies in connection with the Business prior to the Closing Date but no longer owned, leased or operated by any of them as of the Closing Date; (B) prior to the Closing Date, the Release of or exposure of any Person to any Hazardous Substances from the transportation, treatment, storage, handling, or disposal or arrangement for transportation, treatment, storage, handling or disposal of any Hazardous Substances on, at or beneath any former locations or from any of such former locations to any off-site location (or on, at or beneath any current locations or from any of such current locations to any off-site location but only to the extent Buyers notify Sellers of such matter within three (3) years after the Closing Date); (C) any of the matters disclosed in the Environmental Reports or otherwise disclosed in Section 3.16 of the Sellers Disclosure Letter to the extent such Response Action is required by applicable Environmental Law as of the Effective Time to be performed by the Acquired Companies; and (D) (i) any violation of Environmental Law Related to the Business on or prior to the Closing Date; (ii) with respect to the presence of or Release of any Hazardous Substances on, at, beneath the Brazil Location or the Mexico Location existing at the Effective Time but not disclosed in the Environmental Reports or otherwise in Section 3.16 of the Seller Disclosure Letter or (iii) the transportation, treatment, storage, handling, or disposal or arrangement for transportation, treatment, storage, handling or disposal of any Hazardous Substances on, at or beneath any of the Business Locations or from any of the Business Locations to any off-site locations on or prior to the Closing Date, but only, in each case pursuant to this subsection (D), to the extent Buyers notify Sellers of such matter within three (3) years after the Closing Date and it is ultimately determined that such violation Hazardous Substances existed on, at or beneath the Brazil Location or the Mexico Location at the Effective Time and the Response Action was required by any applicable Environmental Law or any Governmental Authority at or prior to the Effective Time (the Liabilities of Seller, any Pre-Restructuring Company and the Acquired Companies described in this clause (ii) being referred to as the “ Excluded Environmental Liabilities ”);

(iii)     all Liabilities to a third party in respect to a claim by a third party seeking to recover from Seller US, an Acquired Company or ARM Brazil damages for breach of the express written warranty extended by any of them with respect to a product of the Business produced by any of them prior to the Effective Time (but in no event shall such Liabilities extend beyond the express terms (including limitations) of such warranty) (the Liabilities of Seller US, the Acquired Companies and ARM Brazil described in this clause (iii) being referred to as the “ Excluded Warranty Liabilities ”);

(iv)   all Liabilities arising from any recall by a Governmental Authority or a customer of the Business of any products produced by Seller US, any Acquired Company or ARM Brazil prior to the Effective Time (the Liabilities of Seller US, the Acquired Companies and ARM Brazil described in this clause (iv) being referred to as the “ Excluded Recall Liabilities ”);

(v)  all Liabilities to a third party in respect of any claim by a third party seeking to recover from Seller US, an Acquired Company or ARM Brazil damages for personal injury or property damage caused by a defective product of the Business which was produced by the Acquired Companies, Seller US or ARM Brazil at or prior to the Effective Time (the Liabilities of Seller US and the Acquired Companies described in this clause (v) being referred to as the “ Excluded Product Liability Claims ”);

(vi)  all Liabilities retained or for which Sellers are responsible under Article VI (the “ Excluded Tax Liabilities ”) or Section 11.6 ;

(vii) all Liabilities retained or for which Sellers are responsible under Article VII (the “ Excluded Labor Liabilities ”);

(viii) all Liabilities to a third party in respect to any asserted and unasserted causes of action, lawsuits, or court, arbitral or Governmental Authority proceedings with respect to the Business conducted by Seller US, an Acquired Company, ARM Brazil or ARM Servicios Mexico to the extent such cause of action, lawsuit or proceeding is primarily based on events, occurrences or omissions existing or occurring prior to the Effective Time, and provided that any such cause of action, lawsuit or proceeding is not primarily based upon or does not primarily arise from or relate to any of the Liabilities otherwise included in the Business Liabilities and the Liabilities under this clause (viii) do not include Liabilities to the extent arising from actions taken by the Buyers (which do not include discovery of such Liability) after the Effective Time (all such causes of action, lawsuits and proceedings described in this clause (viii) being referred to as the “ Excluded Lawsuits and Proceedings ”, it being understood that if a Liability described in this clause (viii) relates to any of the Business Liabilities, but only to the extent related to the Business Liabilities, then the obligation with respect to that portion of such Liability relating to the Business Liabilities shall remain with the Buyers);

(ix) all Liabilities arising from any violation of any Law by Seller US, an Acquired Company, ARM Brazil or ARM Servicios Mexico with respect to the Business to the extent such violation of Law is primarily based on events, occurrences or omissions existing or occurring prior to the Effective Time, and provided that any such violation of Law is not primarily based upon or does not primarily arise from or primarily relate to any of the Liabilities otherwise included in the Business Liabilities and the Liabilities under this clause (ix) do not include Liabilities for violations by the Business after the Effective Time (such causes of action, lawsuits and proceedings described in this clause (ix) being referred to as the “ Excluded Violations of Law ”);

(x) all Liabilities to a third party in respect to any claims for intellectual property infringement (or any other violation of intellectual property rights) to the extent based on products of the Business produced by Seller US, an Acquired Company or ARM Brazil, or methods used by (or the operation of) the Business as conducted by Seller US, an Acquired Company or ARM Brazil prior to the Effective Time, provided that the Liabilities under this clause (x) do not include the Business Liabilities included under Section (xvii) thereof (such claims described in this clause (x) being referred to as the “ Excluded Infringement Claims ”);

(xi) all Liabilities to a third party in respect of claims for material breach or violation of a Material Business Contract or IP Contract by Seller US, an Acquired Company or ARM Brazil to the extent existing or occurring prior to the Effective Time (such claims described in this clause (xi) being referred to as the “ Excluded Business Contract Claims ”); and

(xii) all Liabilities of ARM Brazil (other than the Brazil Business Liabilities), including all Liabilities that can be deemed to be Liabilities of the Brazilian Acquired Company by virtue of it being considered a successor to ARM Brazil, all Liabilities to be retained by ARM Brazil under the Pre-Closing Brazil Spin Off Agreements and Instruments and all Liabilities incurred by ARM Brazil in connection with the Pre-Closing Brazil Spin Off.

“ Excluded Mexico Labor Liabilities ” has the meaning set forth in Section 7.2(e) .

“ Excluded Product Liability Claims ” has the meaning set forth in the definition of Excluded Liabilities.

“ Excluded Recall Liabilities ” has the meaning set forth in the definition of Excluded Liabilities.

“ Excluded Tax Liabilities ” has the meaning set forth in the definition of Excluded Liabilities.

“ Excluded Tooling ” means all tooling owned by a Seller or any Affiliate of a Seller (including, prior to the Effective Time, any Acquired Company) which is not Related to the Business.

“ Excluded Violations of Law ” has the meaning set forth in the definition of Excluded Liabilities.

“ Excluded Warranty Liabilities ” has the meaning set forth in the definition of Excluded Liabilities.

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

“ Final Closing Balance Sheet ” shall have the meaning set forth in Section 2.7(h) .

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

“ Final Closing Indebtedness Amount ” shall have the meaning set forth in Section 2.7(h) .

“ Final Closing Intercompany Sellers Account Balances ” has the meaning set forth in Section 2.7(h) .

“ Final Closing Intercompany Sellers Indebtedness ” shall have the meaning set forth in Section 2.7(h) .

“ Final Closing Net Working Capital ” shall have the meaning set forth in Schedule 2.7(h) .

“ Financial Information ” shall have the meaning set forth in Section 3.3 .

“ Foreign Competition Law ” means any foreign antitrust, merger control or competition Law.

“ Foreign Plans ” shall have the meaning set forth in Section 3.13(a) .

“ FTC ” means the Federal Trade Commission.

“ Fundamental Loss ” shall have the meaning set forth in Section 10.4 .

“ GAAP ” means United States generally accepted accounting principles consistently applied.

“ General Cap Amount ” shall have the meaning set forth in Section 10.4 .

“ Governmental Authority ” means any United States or foreign supranational (including the European Union), national, federal, state, county, provincial or municipal authority or other political subdivision thereof, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

“ Hard Tooled ” has the meaning set forth in Section 5.5(c) .

“ Hazardous Substances ” means any hazardous, toxic or polluting substance, chemical, material or waste, including petroleum or any derivative or by-products thereof, asbestos-containing materials, radioactive materials and polychlorinated biphenyls, as defined and regulated by Environmental Laws.

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

“ ICC ” shall have the meaning set forth in Section 11.13(a) .

“ IMSS ” shall have the meaning set forth in Section 7.2(a) .

“ Income Taxes ” means Taxes determined on the basis of income.

“ Indebtedness ” means, without duplication, the following: (a) any indebtedness for borrowed money, (b) any indebtedness for satisfying Tax Liabilities through periodical installments; (c) any indebtedness for satisfying trade and non trade payables; (d) any indebtedness evidenced by a note, bond or debenture, and (e) any interest, principal, prepayment penalty, fees or expenses to the extent owed in respect of those items listed in clauses (a), (b), (c), and (d) of this definition; provided, that to the extent any of the foregoing are included in this definition, they shall not also be included for purposes of calculating Net Working Capital. For greater certainty, Indebtedness does not include any accounts payable, capitalized leases, letters of credit, guarantees, other credit support arrangements, any factoring or factoring program obligations, or any similar or equivalent arrangement or instrument, unfunded pension liabilities, other post-employment liabilities, restructuring liabilities, product warranty liabilities, incurred but not reported (IBNR) workers compensation liabilities, customer dispute liabilities, incentive/performance and other compensation liabilities, or contract price adjustment liabilities regardless of any of their classifications under the Practices and Procedures or otherwise.

“ Indebtedness Adjustment Amount ” shall have the meaning set forth in Section 2.6(c) .

“ Indemnifiable Tax Proceeding ” shall have the meaning set forth in Section 6.4 .

“ Indemnified Party ” means the Party entitled to indemnification pursuant to Article X .

“ Indemnifying Party ” means the Party required to indemnify the other Party pursuant to Article X .

“ Individual Claim Threshold ” shall have the meaning set forth in Section 10.4 .

“ INFONAVIT ” shall have the meaning set forth in Section 7.2(a) .

“ Initial Allocation ” shall have the meaning set forth in Section 2.8 .

“ Initial Audit Phase ” shall mean the time period commencing on the date on which any Governmental Authority notifies any of the Buyers or the Acquired Companies of an Audit and shall end on the earlier of the date on which any of the Buyer or the Acquired Companies receives any of the following with respect to such Audit: (i) any written assertion by a Governmental Authority that the Acquired Companies may owe additional Taxes; (ii) any written inquiry or request by a Governmental Authority with respect to an Acquired Company’s position regarding any Tax issue; (iii) any written communication by a Governmental Authority which consists of anything other than a request for information from an Acquired Company; or (iv) the commencement of any judicial or administrative proceeding with respect to Taxes arising from such Audit . For the avoidance of doubt, the Parties intend that the Initial Audit Phase be limited to the providing of information by the Acquired Companies.

“ Intellectual Property ” means all intellectual property and industrial property rights throughout the world, including all: (a) patents, patent applications, patent disclosures, and all related continuations, continuations-in-part, divisionals, reissues, re-examinations, substitutions, and extensions thereof (collectively, “ Patents ”); (b) trademarks, servicemarks, trade names, logos, slogans, and trade dress, together with the goodwill symbolized by any of the foregoing, and applications and registrations for the foregoing and tradenames (“ Trademarks ”); (c) registered and unregistered copyrights in both published works and unpublished works, and any copyrightable subject matter (“ Copyrights ”); (d) rights in mask works; (e) know-how and trade secrets and all other confidential or proprietary information, inventions and discoveries, proprietary processes, formulae, models, and methodologies (collectively, “ Trade Secrets ”), and (f) rights of publicity, privacy, and rights to personal information, .

“ Intercompany Acquired Company Account Balances ” means, without duplication, balances of all trade and non-trade intercompany accounts included in the Business Assets or the Business Liabilities between an Acquired Company or Seller US and an Acquired Company or Seller US with respect to the Business, determined in accordance with the Practices and Procedures.

“ Intercompany Acquired Company Indebtedness ” means, without duplication, all Indebtedness of an Acquired Company or Seller US to another Acquired Company or Seller US.

“ Intercompany Adjustment Amount ” shall have the meaning set forth in Section 2.6(d) .

“ Intercompany Indebtedness ” means Intercompany Acquired Company Indebtedness and Intercompany Sellers Indebtedness.

“ Intercompany Sellers Account Balances ” means the balances of all trade and non-trade intercompany accounts included in the Business Assets or the Business Liabilities between a Seller or a Seller Affiliate (other than an Acquired Company or Seller US) and an Acquired Company or Seller US with respect to the Business, determined in accordance with the Accounting Principles and Practices. For greater certainty, Intercompany Sellers Account Balances do not include any Intercompany Acquired Company Account Balances. Solely for purposes of calculating the Intercompany Adjustment Amount, an Intercompany Sellers Account Balance that is owed by a Seller or a Seller Affiliate (other than an Acquired Company or Seller US) to an Acquired Company shall be deemed to be a positive number, while an Intercompany Sellers Account Balance that is owed by an Acquired Company to a Seller or a Seller Affiliate (other than an Acquired Company or Seller US) shall be deemed to be a negative number.

“ Intercompany Sellers Indebtedness ” means, without duplication, (a) all Indebtedness of an Acquired Company to a Seller or an Affiliate of a Seller (other than an Acquired Company) and (b) all Indebtedness of a Seller or an Affiliate of a Seller (other than an Acquired Company) to an Acquired Company. For greater certainty, Intercompany Sellers Indebtedness does not include any Intercompany Acquired Company Indebtedness. Solely for purposes of calculating the Intercompany Adjustment Amount, an Intercompany Sellers Indebtedness under (a) above shall be deemed to be a negative number, while an Intercompany Sellers Indebtedness under (b) above shall be deemed to be a positive number.

“ IP Contracts ” shall have the meaning set forth in Section 3.14(b) .

“ IRS ” means the United States Internal Revenue Service.

“ Knowledge ” means, except as provided in Section 3.3 (b) , in the case of Sellers, the actual knowledge of the persons listed in part I of Appendix H after a reasonable inquiry of the persons identified on part II of Appendix H and, in the case of Buyers, the actual knowledge of the persons listed in part III of Appendix H after a reasonable inquiry of the persons identified on part IV of Appendix H .

“ Law ” means any applicable federal, state, local or foreign statute, law, including common law, treaty, ordinance, rule, code, order or other regulation.

“ Leased Business Real Property ” means the facilities leased or subleased by an Acquired Company including those described on Appendix B . For greater certainty, Leased Business Real Property does not include any Business Fee Warehouse Space.

“ Liabilities ” of a Person means any liability, obligation, or debt of any kind, character or description, whether known or unknown, absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due, vested or unvested, executory, determined, determinable or otherwise, and whether or not the same is required to be accrued on the financial statements of the Person.

“ Loss ” and “ Losses ” shall have the meaning set forth in Section 10.2(a) .

“ Management ” (or its correlative terms) means any use, possession, generation, treatment, storage, recycling, transportation or disposal or arrangement for disposal or distribution of Hazardous Substances.

“ Material Adverse Effect ” means any change, effect, event, occurrence or fact (each an “ Effect ”) that together with any other change, effect, event, occurrence or fact has been or would reasonably be expected to be materially adverse to the business, properties, Business Assets, Business Liabilities, financial condition or results of operations of the Business as a whole; provided , however , that the following shall not be deemed to constitute, and shall not be taken into account in determining whether there has been or will be, a Material Adverse Effect: any adverse Effect to the extent attributable to the announcement or pendency of the transactions contemplated by this Agreement or any of the Ancillary Agreements (including as a result thereof, any cancellations of or delays in customer orders, any reduction in sales, any disruption in supplier, distributor, partner or similar relationships or any loss of employees). References in this Agreement to dollar amount thresholds shall not be deemed to be evidence of a Material Adverse Effect or materiality.

“ Material Business Contracts ” shall have the meaning set forth in Section 3.9(b) .

“ Methodologies for Preparation of Adjustment Item Statements ” means the Pro Forma Adjustment Statements attached as Appendix Q .

“ Methodologies for Preparation of Closing Balance Sheet ” means the Pro Forma Business Balance Sheet attached to this Agreement as Appendix P .

“ Mexico Business Assets ” means all the Business Assets owned by the Acquired Mexican Companies or to which the Acquired Mexican Companies have rights.

“ Mexico Business Employees ” shall have the meaning set forth in Section 7.2(a) .

“ Mexico Business Liabilities ” means all of the Business Liabilities that relate to the Acquired Mexican Companies, the Mexico Business Assets, the Mexico Location or the portion of the Business conducted by the Acquired Mexico Companies or at the Mexico Location or elsewhere.

“ Mexico Conversion ” shall have the meaning set forth in Section 5.27.

“ Mexico Employee Transfer Effective Time ” shall have the meaning set forth in Section 7.2(a) .

“ Mexico Labor Laws ” shall have the meaning set forth in Section 7.2(d) .

“ Mexico Location ” means the Real Property Owned and the Leased Business Real Property located in San Luis Potosi, Mexico and more fully described on Appendix B .

“ Mexico Shares ” means the outstanding shares of the Acquired Mexico Servicios Company and the outstanding equity quotas of the Acquired Mexico Operating Company (which in this latter case shall result from the Mexico Conversion) as indicated on Appendix A .

“ Net Adjustment Amount ” shall have the meaning set forth in Section 2.6(e) .

“ Net Working Capital ” means, as of any applicable date of determination, (a) an amount equal to the Business Inventory, Business Receivables, including accounts receivable for customer tooling included in the Business Assets minus (b) an amount equal to the trade payables included in the Business Liabilities, all as determined in accordance with the Practices and Procedures, the Net Working Capital Adjustments, the Pro Forma Net Working Capital Statement or the Closing Net Working Capital Statement as applicable, and Section 2.7(b) . 

“ Net Working Capital Adjustment Amount ” shall have the meaning set forth in Section 2.6(a) .

“ Net Working Capital Adjustments ” means the adjustments to be used in connection with the preparation of the Pro Forma Net Working Capital Statement and the calculation of Net Working Capital outlined on Appendix I .

“ Non-Required Testing ” shall have the meaning set forth in Section 10.8(f) .

“ Notice Period ” shall have the meaning set forth in Section 10.3 .

“ Outside Closing Date ” means 11:59 p.m., São Paulo time, on November 16, 2009.

“ Owned Business Real Property ” means the Real Property owned by Acquired Brazil Company (or to the extent Related to the Business, any Real Property of the Pre-Restructuring Companies) and located in Limeira, Brazil including as described on Appendix B and the Real Property Owned owned by Acquired Mexico Operating Company and including as described on Appendix B .

“ Parent Trademarks and Logos ” means the names “ArvinMeritor”, “Arvin”, “Meritor” and “Rockwell” and any trade names, trademarks, identifying logos or service marks employing the words “Arvin”, “Meritor” or “Rockwell”, or any confusingly similar part or variation of such words, designs, or anything confusingly similar thereto, and any other trade names, trademarks, identifying logos or service marks owned by a Seller or any of its Affiliates (including any Acquired Company) or predecessors or anything confusingly similar thereto, except those marks specifically included in Business Intellectual Property including as described in Appendix D .

“ Party ” means a Buyer or a Seller, including with respect to Sellers, the Guarantor, and “ Parties ” means all of them, and in each case shall include their respective successors and permitted assigns.

“ Patents ” shall have the meaning set forth in the definition of “Intellectual Property”.

“ Performing Party ” shall have the meaning set forth in Section 10.8(a) .

“ Permitted Activities ” shall have the meaning set forth in Section 5.9(a) of the Sellers Disclosure Letter.

“ Permits ” means all licenses, permits, authorizations, approvals, registrations, franchises and similar consents granted or issued by any Governmental Authority.

“ Permitted Encumbrances ” means:

(a)     in the case of any Real Property or interest in Real Property, and, in each case as incurred in the ordinary course of business; and which does not materially restrict or impair the use of such Real Property (i)zoning, building, subdivision and other statutory or regulatory conditions and restrictions; (ii) Encumbrances for Taxes and assessments not yet due and payable; (iii) any charge, notice, order, restriction, agreement, condition, regulation or other matter arising under the enactments from time to time in force relating to town and county planning or highway legislation; (iv) all notices, orders, demands, proposals or requirements of any Governmental Authority; (v) all public or private rights of way, water, light, air and other rights, easements, quasi-easements, liabilities and public rights whatsoever; and (vi) any Encumbrance identified on Appendix N ; and

(b)     in the case of any of the Business Assets and, in each case as incurred in the ordinary course of business; and which do not materially restrict or impair the use of such Business Asset (i) any Encumbrances for Taxes and assessments not yet due and payable; (ii) any defects in title or Encumbrance; (iii) any Encumbrance arising or imposed under applicable Law, and (iv) any Encumbrance identified on Appendix N .

“ Pension Plan ” shall have the meaning set forth in Section 3.13(b)(ii)(E) .

“ Person ” means an individual, corporation, partnership, limited liability company, association, trust or unincorporated organization, a Governmental Authority or any other entity or organization.

“ Phase-Out Period ” shall have the meaning set forth in Section 5.5(b) .

“ Plans ” shall have the meaning set forth in Section 3.13(b)(ii)(D) .

“ Practices and Procedures ” means the accounting methods, polices, practices and procedures, including classification and estimation methodology, used by Sellers in the preparation of the Financial Information to the extent the same are in accordance with GAAP; and if the same are not in accordance with GAAP, then in accordance with GAAP.

“ Pre-Closing Brazil Spin Off Agreements and Instruments ” means the agreements and instruments relating to the Brazil Spin Off Transactions described on Appendix K .

“ Pre-Closing Brazil Spin Off Transactions ” means the transactions described in Appendix K . For purposes of this Agreement, the Pre-Closing Brazil Spin Off Transactions shall be deemed to have been completed upon (i) the due registration with the Sao Paulo Board of Trade of the Spin Off Agreements and Instruments; (ii) the filing ( protocolo ) of the necessary documents and instruments to provide for the transfer of the Business Intellectual Property from ARM Brazil to the Acquired Brazil Company before the Brazilian Patents and Trademarks Office ( INPI ); (iii) delivery to the Buyers of a duly updated foreign investment consolidated statement ( RDE-IED ) reflecting the effects of such spin off transactions; and (iv) all Business Assets and Business Liabilities shall have been duly registered in the appropriate books and records of the Acquired Brazil Company, and in each case there shall not have been until the Effective Time any uncured opposition or objection by any creditors of ARM Brazil.

“ Pre-Closing Mexico Employee Transfer Agreements and Instruments ” means the agreements and instruments relating to the Mexico Employee Transfer Transaction described on Appendix L .

“ Pre-Closing Mexico Employee Transfer Transaction ” means the transactions described in Appendix L . For purposes of this Agreement, the Pre-Closing Mexico Employee Transfer Transaction shall be deemed to have been completed upon the (i) delivery of notice of the employer’s substitution to the employees, and (ii) filing of the Employer Substitution Agreement and the new collective bargaining agreement with the Labor and Conciliation Board, as contemplated by Appendix L .

“ Pre-Closing Period ” means the portion of a Straddle Period ending prior to the Effective Time.

“ Pre-Restructuring Companies ” means ARM Brazil and ARM Servicios Mexico. “ Pre-Restructuring Company ” means the applicable one of them as the context indicates.

“ Previously Filed Tax Return ” shall have the meaning set forth in Section 6.3 .

“ Prior Period ” shall have the meaning set forth in Section 6.1 .

“ Prior Period Tax Returns ” shall have the meaning set forth in Section 6.1 .

“ Pro Forma Net Working Capital Amount ” means the Net Working Capital Amount shown on the Pro Forma Working Capital Statement.

“ Pro Forma Net Working Capital Statement ” means the Pro Forma Net Working Capital Statement attached as Appendix J .

“ Purchase Price ” shall have the meaning set forth in Section 2.5(a) .

“ Real Property ” means the land, buildings, real property improvements necessary to conduct the Business in the same manner in all material respects as the Business is presently conducted.

“ Real Property Laws ” shall have the meaning is Section 3.5(b) .

“ Related to the Business ” means, with respect to any asset, right, claim, contract, commitment or Liability of a Seller or any Affiliate of a Seller (including an Acquired Company or a Pre-Restructuring Company), that such asset, right, claim, commitment or Liability is or was used or held for use primarily in, arises or arose primarily from, or is or was related primarily to the Business or the operation or conduct of the Business. See the definition of Business Contracts for the treatment of Shared Contracts.

“ Release ” means any spill, leak, release, dispersal, discharge, disposal, pumping, pouring, emitting, emptying, injecting, leaching, contamination, dumping or escape of a Hazardous Substance from, into, or onto the Environment.

“ Response Action ” shall have the meaning set forth in Section 10.8(a) .

“ Restricted Activities ” means the activities in which the Business is engaged as of the date hereof and as of the Effective Time, including designing, manufacturing and selling steel wheels to which a pneumatic tire is to be applied for passenger cars, light- and medium-duty trucks and sport utility vehicles.

“ Rules ” shall have the meaning set forth in Section 11.13(a).

“ São Paulo Courts ” shall have the meaning set forth in Section 11.13(g).

“ SAR ” shall have the meaning set forth in Section 7.2(a) .

“ Securities Act ” shall have the meaning set forth in Section 4.6 .

“ Seller Affiliate ” means an Affiliate of a Seller.

“ Seller Brazil 1 ” shall have the meaning set forth in the preamble.

“ Seller Brazil 2 ” shall have the meaning set forth in the preamble.

“ Seller Mexico 1 ” shall have the meaning set forth in the preamble.

“ Seller Mexico 2 ” shall have the meaning set forth in the preamble.

“ Seller Mexico 3 ” shall have the meaning set forth in the preamble.

“ Seller Mexico 4 ” shall have the meaning set forth in the preamble.

“ Seller Non-Compete Period ” shall have the meaning set forth in Section 5.9(b) .

“ Seller Parties ” shall have the meaning set forth in Section 5.8(c) .

“ Seller Termination Fee ” shall have the meaning set forth in Section 10.9(a).

“ Sellers Trigger ” shall have the meaning set forth in Section 10.9(a).

“ Seller US ” shall have the meaning set forth in the preamble.

“ Seller US’s Pension Plans ” shall have the meaning set forth in Section 7.3(b)(ii) .

“ Seller US’s Welfare Benefit Plans ” shall have the meaning set forth in Section 7.3(b)(iii) .

“ Sellers ” shall have the meaning set forth in the preamble.

“ Sellers Brazil ” shall have the meaning set forth in the preamble.

“ Sellers Disclosure Letter ” means the disclosure letter delivered by Sellers to Buyers concurrently with the execution and delivery of this Agreement, as such disclosure letter may be updated in accordance with the terms hereof.

“ Sellers Mexico ” shall have the meaning set forth in the preamble.

“Sellers’ Objection ” shall have the meanings set forth in Section 2.7(f) .

“ Sellers’ Review Period ” shall have the meaning set forth in Section 2.7(f) .

“ Shared Business Assets ” has the meaning set forth in Section 5.21(c).

“ Shared Contracts ” means all Business Contracts under which a Seller or any Affiliate of Seller (including an Acquired Company) has any rights or primary, secondary, contingent, joint, several or other Liability arising out of or relating to both the Business and any other business of a Seller or an Affiliate of a Seller.

“ Shared Excluded Assets ” has the meaning set forth in Section 5.21(a).

“ Shared Intellectual Property ” means the Excluded Intellectual Property that was used or held for use prior to the date hereof or the Effective Time in the operation of the Business.

“ Shared Intellectual Property License Agreement ” means the Shared Intellectual Property License Agreement with respect to the Shared Intellectual Property in substantially the form attached as Exhibit G .

“ Special Damages ” means and includes lost profits, diminution in value, consequential, incidental, punitive, exemplary, statutory, special and indirect or similar damages.

“ Straddle Period ” is any Tax period that includes both the Closing Date and the day after the Closing Date.

“ Straddle Period Income Tax Return ” is an Income Tax Return of an Acquired Mexico Company that is a Straddle Period Tax Return.

“ Straddle Period Tax Return ” is any Tax Return of an Acquired Mexico Company for a Straddle Period.

“ Target Net Working Capital Amount ” means $ 21,342,000.00.

“ Tax ” or “ Taxes ” means: any and all federal, state, provincial, local or foreign taxes, charges, fees, imposts, levies or other assessments or reassessments by any Governmental Authority, including all net income, income, gross receipts, capital, sales, use, ad valorem, value added, goods and services, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, pensions, social security, unemployment, excise, severance, stamp, occupation, employer health, realty, property and estimated taxes, customs duties, fees, assessments and charges of any kind whatsoever, together with any interest and any penalties, fines, additions to tax or additional amounts imposed by any Governmental Authority.

“ Tax Returns ” means all reports and returns required to be filed with respect to Taxes and shall also include all claims for refunds of Taxes and any and all amended or supplemental reports and returns, and an “ Income Tax Return ” means all reports and returns required to be filed with respect to Income Taxes and shall also include all claims for refunds of Income Taxes and any and all amended or supplemental reports and returns relating to Income Taxes.

“ Third Party Indebtedness ” means, without duplication, Indebtedness included in the Business Liabilities which is owed by an Acquired Company to any Person other than a Seller, a Seller Affiliate, or an Acquired Company. For greater certainty, Third Party Indebtedness does not include any Intercompany Indebtedness.

“ Total Cap Amount ” shall have the meaning set forth in Section 10.4 .

“ Trade Secrets ” shall have the meaning set forth in the definition of “Intellectual Property”.

“ Trademarks ” shall have the meaning set forth in the definition of “Intellectual Property”.

“ Trademark License Agreement ” means the Trademark License Agreement between the Acquired Brazil Company and Meritor Technology, Inc. in substantially the form attached as Exhibit F .

“ Transfer Taxes ” shall have the meaning set forth in Section 2.10 .

“ Transferred US Business Employees ” shall have the meaning set forth in Section 7.3(a) .

“ Transition Services Agreement ” means the Transition Services Agreement between the Acquired Companies, Buyers and Sellers in substantially the form attached as Exhibit C .

“ Updated Allocation ” shall have the meaning set forth in Section 2.8 .

“ US Location ” means the office space occupied by the Transferred US Business Employees located in Troy, Michigan and more fully described on Appendix B .

Section 1.2      Other Terms . Other terms may be defined elsewhere in the text of this Agreement and, unless otherwise indicated, shall have such meaning throughout this Agreement.

Section 1.3     Other Definitional Provisions .

(a)     The words “hereof,” “herein,” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement. Whenever the words “include,” “includes” or “including ” (or any variation thereof) are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”

(b)    References to specific Articles and Sections are to the Articles and Sections of this Agreement, unless specifically stated otherwise. References to specific Exhibits or Appendices are to Exhibits or Appendices attached to this Agreement unless specifically stated otherwise.

(c)    The terms defined in the singular shall have a comparable meaning when used in the plural, and vice versa. All references to “dollars” or “$” mean “U.S. dollars”. All references to “foreign” means countries other than the United States.

(d)   All accounting terms not specifically defined herein shall, to the extent not inconsistent with the express terms of this Agreement, be construed in conformity with GAAP.

(e)   This Agreement is being entered into by and among competent and sophisticated parties who are experienced in business matters and represented by counsel and other advisors, and has been reviewed by the Parties and their counsel and other advisors. Therefore, any ambiguous language in this Agreement will not be construed against any particular Party as the drafter of the language.

Section 1.4      Currency and Payments . Except as otherwise provided in this Agreement or the Parties shall otherwise agree in writing, all amounts and payments under this Agreement are expressed, shall be paid in United States currency, except for payments in Mexico, which shall be paid in Mexican Pesos. However, any conversion for purposes of financial statements or calculating the Net Working Capital Adjustment shall be based on the following: any amounts to be converted to U.S. dollars, from Brazilian and Mexican currencies, shall use the following conversion rates, respectively: (i) the “ PTAX ” rate, which means the rate published by the Central Bank of Brazil in the SISBACEN data system on the PTAX 800 Screen – Option 5 sale option, and (ii) the exchange rate for settling obligations denominated in foreign currencies for payment in the Mexican Republic, published by the Bank of Mexico ( Banco de México ) in the Federal Official Gazette; and, in each case, as published on the Business Day immediately prior to the applicable date.

ARTICLE II

PURCHASE AND SALE OF THE ACQUIRED COMPANY SHARES AND THE ACQUIRED US ASSETS

Section 2.1   Purchase and Sale of the Acquired Company Shares; Pre Closing Spin-Off Transactions.

                  (a)     Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, (a) Sellers Brazil shall sell, convey, transfer, assign and deliver to Buyer Brazil, and Buyer Brazil shall purchase from Sellers Brazil, all of Sellers Brazil’s right, title and interest in and to the Brazil Shares, free and clear of all Encumbrances and (b) Sellers Mexico shall sell, convey, transfer, assign and deliver to Buyers Mexico, and Buyers Mexico shall purchase from Sellers Mexico, all of Sellers Mexico’s right, title and interest in and to the Mexico Shares, free and clear of all Encumbrances. By means of such purchase, Buyers shall acquire the portion of the Business operated in Brazil and Mexico from the Sellers as contemplated herein. By means of the transfer provided for in Section 2.2, Buyers shall acquire the portion of the Business operated in the United States from the Sellers as contemplated herein.

                  (b)     Prior to the Closing, Sellers Brazil are pursuant to the terms hereof engaging in certain transactions, as set forth in Appendix K, to separate the part of the Business conducted by ARM Brazil, the Brazil Business Assets and the Brazil Business Liabilities from the other businesses, assets and liabilities of ARM Brazil by means of a statutory spin off pursuant to the Pre-Closing Brazil Spin Off Transactions Agreements and Instruments. It being understood that ARM Brazil will retain after the completion of the Pre-Closing Brazil Spin-Off Transactions (i) all of its assets other than the Brazil Business Assets, which retained assets shall constitute Excluded Assets to the extent provided herein and (ii) all of its Liabilities other than the Brazil Business Liabilities, which retained Liabilities shall constitute Excluded Liabilities to the extent provided herein.

                  (c)     Prior to the Closing, ARM Servicios Mexico is, pursuant to the terms hereof, transferring, as set forth in Appendix L, the Mexico Employees to Acquired Mexico Servicios Company pursuant to the Pre-Closing Mexico Employee Transfer agreements and Instruments. It being understood that ARM Servicios Mexico will retain after the completion of the Pre-Closing Mexico Employee Transfer (i) all of its assets other than the Mexico Business Assets, which assets shall constitute Excluded Assets to the extent provided herein and (ii) all of its Liabilities other than the Mexico Business Liabilities, which Liabilities shall constitute Excluded Liabilities to the extent provided herein.

                  (d)     For greater certainty, the Pre-Closing Brazil Spin Off Transactions shall have been completed prior to the Closing and the Pre-Closing Mexico Employee Transfer Transaction shall have been completed prior to the Closing.

Section 2.2     Purchase and Sale of Acquired US Assets . Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, Seller US shall sell, convey, transfer, assign and deliver to Buyer US, and Buyer US shall purchase, acquire and accept from Seller US, all of Seller US’s right, title and interest in and to the Acquired US Assets, free and clear of all Encumbrances, except Permitted Encumbrances (if any).

Section 2.3     Excluded Assets .

                  (a)  Notwithstanding anything herein to the contrary, from and after the Effective Time, Sellers and their Affiliates shall retain, and the Business Assets shall not include, and no Buyer or Acquired Company shall have any right, title or interest in, any of the Excluded Assets. Notwithstanding anything herein to the contrary, from and after the Effective Time, Buyers and their Affiliates shall acquire, and the Excluded Assets shall not include, and no Seller shall have any right, title or interest in, any of the Business Assets.

                  (b)  Notwithstanding anything to the contrary contained in this Agreement, Sellers may retain copies of any Business Contract, Business Books and Records, data or other information which is included in the Business Assets. Sellers acknowledge that their rights under this Section 2.3(b) will in no event limit their obligations under Section 5.9 and Section 5.10 .

Section 2.4      Business Liabilities .

                  (a)  From and after the Effective Time, (i) Buyers shall cause Acquired Brazil Company to fully pay, discharge, satisfy and perform when due all of the Brazil Business Liabilities, (ii) Buyers shall cause the Acquired Mexico Company to fully pay, discharge, satisfy and perform when due all of the Mexico Business Liabilities, and (iii) Buyer US shall, and the other Buyers shall cause Buyer US to, assume and fully pay, discharge, satisfy and perform when due all of the Assumed Liabilities. The Parties agree that the Sellers shall only be entitled to any remedy under this Section 2.4(a) if they incur Loss and in such event the Sellers sole and exclusive remedy for a breach or failure by Buyers to comply with this Section 2.4(a) is a claim for indemnification under Article X .

                   (b)  Buyers’ obligations under this Section 2.4 will not be subject to offset or reduction by reason of any actual or alleged breach of any representation, warranty or covenant contained in this Agreement or the Ancillary Agreements or any closing or other document contemplated by this Agreement or the Ancillary Agreements, any right or alleged right of indemnification hereunder or for any other reason.

                   (c)  The Excluded Liabilities shall be excluded from the Assumed Liabilities.

Section 2.5      Purchase Price and Payment .

                   (a)  Subject to Sections 2.6 and 2.7, the total purchase price (the “ Purchase Price ”) for the Acquired Company Shares and the Acquired US Assets will be, in addition to the assumption of the Assumed Liabilities, an amount equal to (i) $180,000,000 (the “ Base Amount ”) plus (ii) the Final Closing Cash Amount minus (iii) the Final Closing Indebtedness Amount plus (iv) the Final Closing Net Working Capital minus Target Net Working Capital (which can be a positive or a negative number); plus (v) the Intercompany Adjustment Amount (which may be a positive or negative number).

                   (b)  The Purchase Price shall be payable as follows:

                          (i)     an amount equal to the Base Amount plus the Estimated Cash Amount and minus the Estimated Indebtedness Amount minus the difference between the Target Net Working Capital Amount and the Estimated Net Working Capital Amount (the “ Closing Payment ”) shall be paid by Buyers to Sellers by the transfer of immediately available funds to an account or accounts designated by Sellers at least five (5) Business Days prior to Closing;

                          (ii)     an amount equal to the absolute value of the Net Adjustment Amount will be paid by Buyers or Sellers (with respect to each of the Parties, jointly and severally, and in respect to Sellers as guaranteed by the Guarantor), as applicable, in accordance with Section 2.6(f) ; and

                          (iii)    the Assumed Liabilities will be assumed by Buyer US in accordance with Section 2.4(a) .

                  (c)     Subject to Section 10.2(c), for greater certainty, there will be no reduction in the Purchase Price for any Liability of any Acquired Company other than as expressly contemplated in the adjustments described in Section 2.6 .

(d)     With respect to the portion of the Closing Payment to be paid from Brazil to the U.S. by means of a remittance of funds and with respect to the acquisition of the Acquired Brazil Company, Sellers shall provide to Buyers, at least ten (10) days prior to Closing, the foreign investment consolidated statement ( RDE-IED ) of the Acquired Brazil Company, so that Buyers can withhold the income Tax over the capital gain ascertained on such portion of the Closing Payment in accordance with applicable Law.

(e)     The Sellers shall provide, at least ten (10) days prior to Closing, a draft with a proposal for the amendment to the articles of association of the Acquired Brazil Company (“ Amendment to the Articles of Association ”) that will effectuate the transfer of the Brazil Shares from Sellers Brazil to Buyer Brazil and Buyers shall review and agree to such Amendment to the Articles of Association. The Amendment to the Articles of Association shall be executed by Sellers and Buyers on the Closing Date. Additionally, Sellers shall provide Buyers with certificates with respect to the Acquired Brazil Company necessary for the filling of the Amendment to the Articles of Association before the relevant Board of Trade and such certificates shall be valid and in full force for fifteen (15) days following the Closing Date.

Section 2.6      Adjustment Amounts and Payment .

 

(a)     The “ Net Working Capital Adjustment Amount ” (which may be a positive or negative number) will be the amount determined by subtracting the Estimated Net Working Capital Amount from the Final Closing Net Working Capital.

 

(b)     The “ Cash Adjustment Amount ” (which may be a positive or negative number) will be the amount determined by subtracting the Estimated Cash Amount from the Final Closing Cash Amount.

 

(c)     The “ Indebtedness Adjustment Amount ” (which may be a positive or negative number) will be the amount determined by subtracting the Final Closing Indebtedness Amount from the Estimated Indebtedness Amount.

 

(d)     The “ Intercompany Adjustment Amount ” (which may be a positive or negative number) will be the amount equal to the Final Closing Intercompany Seller Account Balances plus the Final Closing Intercompany Seller Indebtedness.

 

(e)     The “ Net Adjustment Amount ” (which may be a positive or negative number) will be equal to (i) the Net Working Capital Adjustment Amount; plus (ii) the Cash Adjustment Amount; plus (iii) the Indebtedness Adjustment Amount; plus (iv) the Intercompany Adjustment Amount.

 

(f)     In the event that the Net Adjustment Amount is a positive number, Buyers shall pay to Sellers an amount equal to the Net Adjustment Amount by wire transfer to an account or accounts specified by Sellers. In the event the Net Adjustment Amount is a negative number, Sellers shall pay to Buyers an amount equal to the absolute value of the Net Adjustment Amount by wire transfer to an account specified by Buyers. Payment of the Net Adjustment Amount by Buyers, jointly and severally, or Sellers, jointly and severally (and as further guaranteed by the Guarantor), shall be made together with interest on such amount at an annual rate equal to the Closing Date Interest Rate based on a year of 365 days for the actual number of days elapsed, which interest shall begin accruing on the Closing Date and end on the date that the payment is made. Within three (3) Business Days after the calculation of the Net Adjustment Amount shall become final, Sellers or Buyers, as applicable, shall make the payment provided for in this Section 2.6(f) . In the event the Party required to pay the Net Adjustment Amount do not pay the Net Adjustment Amount during the period provided in the previous sentence, the Net Adjustment Amount will be increased by an amount equal to two (2) percent of the Net Adjustment Amount that was not paid in a timely manner, it being understood that the foregoing shall not limit any other rights to payment or otherwise that the Party that is owed the Net Adjustment Amount may have.

Section 2.7      Adjustment Procedure .

(a)     Buyers shall prepare a balance sheet of the Business as at the Effective Time (the “ Closing Balance Sheet ”). The Closing Balance Sheet is to be prepared by Buyers in accordance with the Practices and Procedures and the Methodologies for Preparation of Closing Balance Sheet. Buyers shall use commercially reasonable efforts to deliver the Closing Balance Sheet to Sellers within sixty (60) days following the Closing Date but not later than seventy five (75) days after the Closing Date.

 

(b)     Buyers shall also prepare a statement (the “ Closing Net Working Capital Statement ”) of the Net Working Capital of the Business as at the Effective Time (the “ Closing Net Working Capital ”). The Closing Net Working Capital Statement is to be in the same form as, and is to contain the same line items (and only the line items) as are set forth in, the Pro Forma Net Working Capital Statement and is to include a computation of the Closing Net Working Capital Amount (the “ Closing Net Working Capital Amount ”) on the same basis as the computation of the Pro Forma Working Capital Amount set forth in the Pro Forma Net Working Capital Statement. The Closing Net Working Capital Statement is to be prepared based on the Closing Balance Sheet and the Net Working Capital Adjustments and on a consistent basis with the Pro Forma Net Working Capital Statement including the instructions and notes thereto. The Closing Net Working Capital Amount is to be computed in the Closing Net Working Capital Statement on the same basis as the Pro Forma Net Working Capital Amount is computed in the Pro Forma Net Working Capital Statement. Buyers shall deliver the Closing Net Working Capital Statement to Sellers at the same time as they deliver the Closing Balance Sheet.

 

(c)     Buyers are also to prepare statements setting forth the following, which are to be prepared in accordance with the Methodologies for Preparation of Adjustment Items Statements:

 

          (i)     the amount of Cash of the Acquired Companies at the Effective Time (the “ Closing Cash Amount ”);

 

          (ii)     the identity and amount of all Third Party Indebtedness as of the Effective Time (the “ Closing Indebtedness Amount ”); 

 

          (iii)     the identity and amount of all Intercompany Seller Account Balances as of the Effective Time (the “ Closing Intercompany Seller Account Balances ”); and

 

          (iv)     the identity and amount of all Intercompany Seller Indebtedness as of the Effective Time (the “ Closing Intercompany Seller Indebtedness ”).

 

(d)     Buyers are also to prepare written computations of the Net Working Capital Adjustment Amount, the Cash Adjustment Amount, the Indebtedness Adjustment Amount, the Net Adjustment Amount, and the Intercompany Adjustment Amount. The computations shall be delivered by Buyers to Sellers at the same time as they deliver the Closing Balance Sheet.

 

(e)     Buyers shall, and shall cause the Acquired Companies to, make available to Sellers all Business Books and Records, data and other information, including accountant work papers, and to any employees, and provide such other support, as Sellers may reasonably request for the purposes of reviewing the Closing Balance Sheet, the Closing Net Working Capital Statement, the statements of the Closing Cash Amount, the Closing Indebtedness Amount, the Closing Intercompany Seller Account Balances and the Closing Intercompany Seller Indebtedness, and the computations of the Net Working Capital Adjustment Amount, the Cash Adjustment Amount, the Closing Indebtedness Adjustment Amount, the Net Adjustment Amount, and the Intercompany Adjustment Amount (collectively, the “ Adjustment Items ”).

 

(f)     Sellers shall, within thirty (30) days after the delivery by Buyers of the Adjustment Items (“ Sellers’ Review Period ”), complete their review of those items. The Adjustment Items shall be final, binding and conclusive upon, and deemed accepted by, Sellers unless Sellers shall have notified Buyers in writing prior to the expiration of Sellers’ Review Period of any good faith objection thereto, which written objection may not include any objection not premised on the Closing Balance Sheet, the Net Working Capital Statement, the statements described in Section 2.7(c) or the Adjustment Items not being prepared or computed in accordance with this Section 2.6 (the “ Sellers’ Objection ”); provided , that Sellers may not deliver more than one Sellers’ Objection and may not amend its Sellers’ Objection once it has been delivered to Buyers. The Sellers’ Objection shall set forth a reasonably practicable specific description of the basis of Sellers’ Objection and the reasonably practicable specific adjustments to the Adjustment Items which Sellers believe should be made. Notwithstanding the foregoing, any items not disputed in a valid Sellers’ Objection shall be deemed to have been accepted by Sellers, and Sellers agree that they shall not object to or otherwise challenge the Adjustment Items.

 

(g)    If Sellers and Buyers are unable to resolve all of their disputes with respect to the Adjustment Items within fifteen (15) days following Buyers’ receipt of Sellers’ Objection to such Adjustment Items pursuant to Section 2.7(f) , they shall refer their remaining differences to an independent and internationally recognized firm of independent public accountants as to which Sellers and Buyers mutually agree or, if they are unable to mutually agree within such fifteen (15) day period, each shall appoint one such firm and the two (2) selected firms shall select the firm of independent public accountants (the “ CPA Firm ”) for decision, which decision shall be final, binding and conclusive on the Parties upon delivery of its written opinion set forth in sub-clause (iii) below. The procedure and schedule under which any dispute shall be submitted to the CPA Firm shall be as follows:

        (i)     Within fifteen (15) days following the retention of the CPA Firm, Buyers and Sellers shall separately submit any unresolved portion of Sellers’ Objection to the CPA Firm in writing (with a copy to the others), supported by any documents and/or affidavits upon which they rely. In the case of this Buyers ’ obligations under this Section 2.7(g)(i) will be subject to whether and the extent to which Sellers have previously specifically identified its objections.

 

        (ii)    Within fifteen (15) days following the submission of the unresolved portion of Sellers’ Objection as specified in sub-clause (i) above, Buyers and Sellers shall submit their response to the CPA Firm in writing (with a copy to the others), supported by any further documents and/or affidavits upon which they rely.

 

        (iii)    The CPA Firm shall deliver its written opinion within twenty (20) days following its receipt of the information provided for in sub-clause (ii) above, or such longer period of time as the CPA Firm determines is necessary, but not to exceed forty-five (45) days. The scope of the disputes to be resolved by the CPA Firm is limited to the unresolved portion of the Sellers’ Objection. Buyers and Sellers shall make readily available to the CPA Firm all relevant books and records and any work papers (including those of the parties’ respective accountants) relating to the Adjustment Items at issue and all other items reasonably requested by the CPA Firm.

 

         (iv)   Any expenses relating to the engagement of the CPA Firm shall be allocated between Buyers and Sellers (with respect to each of the Parties, jointly and severally, and in respect to Sellers as guaranteed by the Guarantor) so that Sellers’ share of such costs shall be in the same proportion that (x) the aggregate amount of the disputed items submitted by Sellers to the CPA Firm that are unsuccessfully disputed bears to (y) the total amount of all disputed items submitted by Sellers to the CPA Firm. Sellers and Buyers shall each bear the fees of their respective auditors incurred in connection with the determination and review of the Adjustment Items at issue.

 

(h)     Each of the Adjustment Items shall become final, binding and conclusive on the Parties upon the earliest of (i) if no Sellers’ Objection has been given, the expiration of the period within which Sellers must make the Sellers’ Objection pursuant to Section 2.7(f) , (ii) agreement in writing by Sellers and Buyers that the Adjustment Items, together with any modifications thereto agreed by Sellers and Buyers, shall be final and binding and (iii) the date on which the CPA Firm shall issue its written determination with respect to any dispute relating to the Adjustment Items. The Closing Balance Sheet, the Closing Net Working Capital, the Closing Net Working Capital Amount, the Closing Cash Amount, the Closing Indebtedness Amount, the Closing Intercompany Seller Account Balances and the Closing Intercompany Seller Indebtedness, as submitted by Buyers if no timely Sellers’ Objection has been given or as adjusted pursuant to any agreement between the Parties or as determined pursuant to the decision of the CPA Firm, are herein referred to as the “ Final Closing Balance Sheet ,” “ Final Closing Net Working Capital ,” the “ Final Closing Net Working Capital Amount ,” the “ Final Closing Cash Amount ,” the “ Final Closing Indebtedness Amount ,” the “ Final Closing Intercompany Sellers Account Balances ” and the “ Final Closing Intercompany Sellers Indebtedness ” respectively.

 

Section 2.8      Allocation of Purchase Price . The Purchase Price shall be allocated on the basis of the relative fair market value of the assets comprising the Acquired US Assets, the Brazil Shares and the Mexico Shares. The initial allocation (the “ Initial Allocation ” ) of the Purchase Price shall be as set forth in Appendix O . Buyers shall prepare an updated allocation, in accordance with Appendix O (the “ Updated Allocation ”), of the Purchase Price to account for the adjustments to the Purchase Price pursuant to Section 2.6 for the review and approval of Sellers within fifteen (15) days after the determination of the Final Closing Balance Sheet. The Updated Allocation will take into consideration each of the U.S., Brazil and Mexico and possible modifications with respect to each such country. If within thirty (30) days after the delivery of the Updated Allocation, Sellers notify Buyers in writing that Sellers object to the allocation set forth in the Updated Allocation, Buyers and Sellers shall use commercially reasonable efforts to resolve such dispute within fifteen (15) days thereafter. In the event that Buyers and Sellers are unable to resolve such dispute, they shall refer their remaining differences regarding the allocation to the CPA Firm for decision and shall follow the procedure and schedule described under Section 2.7(g ). The allocation of the Purchase Price, as finally determined (the “ Allocation ”) shall be final, binding and conclusive on the Parties. Each Party agrees to complete and file all required Tax Returns consistent with such allocation for the tax year in which the Closing occurs, and no Party will take a position on any income, transfer, gains or other Tax Return, or before any Governmental Authority charged with the collection of any such Tax or in any judicial proceeding, that is in any manner inconsistent with the terms of the Allocation, unless required to do so by law or regulation as interpreted or modified subsequent to the Closing Date.

 

Section 2.9    Closing; Delivery and Payment .

 

(a)      Closing Date . The closing of the transactions contemplated by this Agreement (the “ Closing ”) shall take place at the offices of Araújo e Policastro Advogados, in Sao Paulo, Brazil, at 2:00 p.m., local time, on a date to be agreed upon by the Parties but not later than the fifth (5 ^th ) Business Day after the date on which all of the conditions to Closing in Article VIII are satisfied or waived, other than any such conditions to be satisfied by deliveries to be made on the Closing Date, or on such other date or at such other time as may be mutually agreed upon in writing by Buyers and Sellers (the time and date on which the Closing occurs is hereinafter referred to as the “ Closing Date ”). Notwithstanding the foregoing, the Parties shall cooperate to cause the Closing to occur on or prior to September 23, 2009. The Closing shall be deemed effective as of the Effective Time. The failure of the Closing to occur on or prior to September 23, 2009 shall not result in a termination of this Agreement or a failure to satisfy the conditions precedent to Closing.

 

(b)    Closing; Delivery and Payment .

        

        (i)     At the Closing:

 

(A)     Buyers shall pay the Closing Payment to Sellers in immediately available funds by wire transfer to the account or accounts designated by Sellers;

 

(B)     Sellers Brazil and Sellers Mexico shall execute and deliver to Buyer Brazil and Buyers Mexico assignments sufficient to convey, transfer and assign to them all right, title and interest in and to the Acquired Company Shares, including the Amendment to the Articles of Association (which amendment shall also be executed and delivered by Buyers). In addition, Sellers Mexico shall deliver to (x) Buyers Mexico, with respect to each of the Mexico Acquired Companies, its stock or equity interest registry book, book of minutes of shareholders’ meetings, book of minutes of the board of directors or managers, and capital variations registry book ( libro de registro de variaciones de capital ), in each case as applicable to each Acquired Mexico Company and in each case duly updated and complete and, as pertains the stock or equity interest registry book, with an entry evidencing the transfer of the Mexico Shares to the relevant Buyers Mexico made pursuant to this Agreement, duly signed by the outgoing president or secretary of the board of directors or managers of each Mexico Acquired Company, in accordance with the Ley General de Sociedades Mercantiles ; and (y) the respective Buyers Mexico all of the stock certificates representing the shares of the Acquired Mexico Servicios Company, duly endorsed in property in their favor, as well as the assignments of the equity quotas of the Acquired Mexico Operating Company, in each case in the proportions previously communicated in writing by the Sellers to the Buyers;

 

(C)     Seller US and Buyer US shall execute and deliver to each other counterparts of the Bill of Sale and the Assumption Agreement;

 

(D)     Sellers and Buyer US shall execute and deliver to each other counterparts of the other Ancillary Agreements and the powers of attorney described in Section 5.15; and

 

(E)     Sellers and Buyers shall deliver, each to the other, such documents as are required pursuant to Article VIII .

 

(ii)     Simultaneously with the Closing, Buyers or an Acquired Company shall deliver to Sellers the Ancillary Agreements and such other instruments as are to be executed by an Acquired Company, duly executed by the appropriate Acquired Company.

Section 2.10    Taxes and Fees . Sales taxes, goods and services taxes, value added taxes, real estate and other transfer taxes, stamp taxes, conveyance taxes, intangible taxes, documentary recording taxes, filing fees, license and registration fees, notarial fees, recording fees and similar taxes, Income Taxes, fees and charges imposed by any Governmental Authority in the United States of America or in a foreign jurisdiction upon or as a result of the transfer of the Acquired Company Shares or the Acquired US Assets, the assumption of the Business Liabilities or the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements (the “ Transfer Taxes ”) shall be paid by the Party obligated under applicable Law to pay the Taxes.

Section 2.11     Further Assurances . Subject to the terms and conditions of this Agreement, at any time and from time to time after the Closing, at a Party’s reasonable request, the other Party(ies) will execute and deliver such other instruments of sale, transfer, conveyance, assignment, confirmation, and assumption, and provide such materials and information and take such other actions as the other Party may reasonably deem necessary or desirable in order to more effectively transfer, convey and assign to Buyers the Acquired Company Shares, the Business Assets and the Acquired US Assets and in order to more effectively effect the assumption by Buyer US of the Assumed Liabilities.

Section 2.12     Post Closing Access to Books and Records . Following the Closing, Buyers will, and will cause the Acquired Companies to, afford Sellers, their counsel and accountants, during normal business hours, reasonable access to, the Business Books and Records with respect to periods through the Closing and the right to make copies and extracts therefrom, and access to and cooperation and assistance of the employees of Buyers and the Acquired Companies, to the extent that such access may be reasonably required by Sellers in connection with (i) the preparation of Sellers’ Tax Returns, (ii) any Tax audit, Tax protest or other proceeding relating to Taxes, (iii) the determination or enforcement of rights and obligations under this Agreement or any Ancillary Agreement or the transactions contemplated by this Agreement or any Ancillary Agreement, (iv) compliance with the requirements of any Governmental Authority, (v) any actual or threatened action or proceeding, (vi) use of the Intellectual Property contained therein other than the Business Intellectual Property, or (vii) any other reasonable purpose relating to this Agreement or any of the Ancillary Agreements, Sellers and their Affiliates performance of their respective obligations hereunder and thereunder, or any of the transactions contemplated hereby or thereby. This Section 2.12 will be subject to any mandatory prohibition under applicable Law with respect to the disclosure of particular Business Books and Records. Buyers shall not, and shall cause the Acquired Companies to not, for a period ending the later of seven (7) years after the Effective Time or the expiration of the applicable statute of limitation as to the retention of records for Tax purposes or the payment of Taxes by Sellers or any Acquired Company with respect to any period ending prior to the Closing Date, destroy or otherwise dispose of any of the Business Books and Records unless Buyers first offer in writing to surrender such Business Books and Records to Sellers and Sellers do not agree to take possession thereof during the thirty (30) day period after such offer is made.

Section 2.13     Cooperation . If, in order to properly prepare its Tax Returns or other documents or reports required to be filed with any Governmental Authority, it is necessary that a Seller be furnished with additional information, documents or records Related to the Business not referred to in Section 2.12 , and such information, documents or records are in the possession or control of Buyers or any of the Acquired Companies, Buyers will furnish or make available within a reasonable time such information, documents or records (or copies thereof) at a Seller’s reasonable request. Sellers agree to reimburse Buyers for their reasonable out-of-pocket costs provided that such costs are disclosed to and approved in writing by Sellers in advance.

Section 2.14     Assets Incapable of Transfer.

(a)     To the extent that any Business Contract, Permit, claim related to the Business Assets or other Business Asset included in the Acquired US Assets and the Acquired Company Assets is not assignable or transferable without the consent of another Person, this Agreement shall not constitute an assignment or transfer thereof, an attempted assignment or transfer thereof, or an agreement to effect such an assignment or transfer, if such assignment or transfer, attempted assignment or transfer, or agreement would constitute a breach of the contract, permit or asset. Sellers and Buyers shall use their commercially reasonable efforts to obtain the consent of such other Person as soon as reasonably practicable to the assignment or transfer of any such Business Assets to the appropriate Buyer in all cases in which such consent is or may be required for such assignment or transfer and to obtain the release of Sellers of their obligations under each such Business Asset. For purposes of clarification, the commercially reasonable efforts by Sellers shall in no event (i) require the payment of any money or (ii) permit, without the prior written consent of Buyers, the amendment or modification of any material term or provision of the contract, permit or asset.

 

(b)     If any such consent will not be obtained, Sellers shall use commercially reasonable efforts, upon reasonable request by Buyers, to provide an alternate reasonable arrangement reasonably satisfactory to Buyers and Sellers designed to provide to Buyers the economic benefits intended to be assigned or transferred to them under the relevant Business Asset and to relieve Sellers of the performance and other obligations and Liabilities thereunder. Without limiting the generality of the foregoing, the Parties expressly intend and agree that the beneficial interest in and to such Business Assets, to the fullest extent permitted by the relevant contract, permit, claim or asset and applicable Law, pass to Buyer. The Parties further expressly intend and agree that all Liabilities under any such permit, claim, contract or asset shall be assumed by Buyers as of the Effective Time, whether or not an assignment or transfer can be made, and all such Liabilities shall constitute Assumed Liabilities, Brazil Business Liabilities or Mexico Business Liabilities under this Agreement, as the case may be.

 

ARTICLE III 

 

REPRESENTATIONS AND WARRANTIES OF SELLERS

Sellers, jointly and severally, represent and warrant to Buyers as follows as of the date of this Agreement and, subject to any updated Sellers Disclosure Letter delivered by Sellers to Buyers prior to or at the Closing, as of the Closing Date:

     Section 3.1      Organization and Authority . Each Seller and each of the Acquired Companies has been duly incorporated or formed, is validly existing and is in good standing under the laws of its jurisdiction of incorporation or formation, with the requisite power (corporate or otherwise) and authority to own, operate or lease the properties that it purports to own, operate or lease and to carry on its business as now being conducted. Each Seller has the full power (corporate or otherwise) and authority to enter into this Agreement and the Ancillary Agreements to which it is to be a party and to perform its obligations hereunder and thereunder. Each Acquired Company and each Pre-Restructuring Company has the full power (corporate or otherwise) and authority to enter into the agreements and the other documents with respect to the Pre-Closing Spin Off Transactions to which it is to be a party and to perform its obligations hereunder and thereunder. This Agreement has been duly authorized, executed and delivered by Sellers and constitutes a legal, valid and binding agreement of Sellers, enforceable against Sellers in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles, and no other proceedings on the part of Sellers are necessary to authorize this Agreement and the consummation of the transactions contemplated hereby. The agreements and other documents with respect to the Pre-Closing Spin Off Transaction have been duly authorized, executed and delivered by the applicable Acquired Company or Pre-Restructuring Company and constitutes a legal, valid and binding agreement of such entity, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles, and no other proceedings on the part of such entity are necessary to authorize such agreements or documents and the consummation of the transactions contemplated thereby. The Ancillary Agreements will be duly authorized, executed and delivered by Sellers and will constitute legal, valid and binding agreements of Sellers, as applicable, enforceable against Sellers, as applicable, in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles, and no other proceedings on the part of Sellers are necessary to authorize the Ancillary Agreements and the consummation of the transactions contemplated thereby.
 

     Section 3.2      No Conflict . Neither (i) the execution and delivery by Sellers of this Agreement and each Ancillary Agreement to which a Seller is a party, (ii) nor compliance by a Seller with the terms and provisions of this Agreement and each such Ancillary Agreement, nor (iii) the execution and delivery by the Acquired Companies or the Pre-Restructuring Companies of the agreements and other documents with respect to the Pre-Closing Spin Off Transaction, (iv) nor compliance by the Acquired Companies or the Pre-Restructuring Companies with the agreements and other documents with respect to the Pre-Closing Spin Off Transaction will (a) except as set forth in Section 3.2(a) of Sellers Disclosure Letter, violate any provision of the certificate of incorporation or by-laws or other similar organizational document of such Seller, Acquired Company or Pre-Restructuring Company; (b) except as set forth in Section 3.2(b) of Sellers Disclosure Letter violate any Law or any injunction, order or decree of any Governmental Authority to which such Seller, Acquired Company or Pre-Restructuring Company is subject except, in all cases, for such violations that would not prohibit or materially impair such entities’ ability to perform its obligations under this Agreement or an Ancillary Agreement or the agreements and other documents with respect to the Pre-Closing Spin Off Transaction; or (c) except as set forth in Section 3.2 of the Sellers Disclosure Letter, result in any breach of, or constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any of the Business Contracts listed in Section 3.9(a) of the Sellers Disclosure Letter or result in the creation of any Encumbrance (other than a Permitted Encumbrance) on any of the Business Assets, except in the case of clause “c”, for any violations, breaches, defaults or other matters that would not have a Material Adverse Effect or prohibit or materially impair such Seller’s ability to perform its obligations under this Agreement, the Ancillary Agreements or in connection with the Pre-Closing Spin Off Transactions.

     Section 3.3      Financial Information .

(a)     Section 3.3 of the Sellers Disclosure Letter sets forth a copy of (i) the unaudited combined financial statements of the Business consisting of a balance sheet and income statement, as of and for the fiscal years ended 2008 and 2007, and (ii) the unaudited combined financial statements of the Business, consisting of a balance sheet and income statement as of and for the nine months ended June 30, 2009 (collectively, the “ Financial Information ”). Except as set forth in Section 3.3 of the Sellers Disclosure Letter, the Financial Information is complete and accurate in all material respects, fairly present the assets, liabilities and income statement of the Business and have been prepared from the applicable books and records of Sellers in accordance with the Practices and Procedures consistently applied.

(b)     Except as set forth in Section 3.3 of the Sellers Disclosure Letter, to the Knowledge of Sellers, as of June 30, 2009, there were no Liabilities of the Business (that were individually or in the aggregate material to the Business) that have not been fully disclosed or reserved against on the Financial Information for the nine months ended June 30, 2009 of any kind or type that would be required by the Practices and Procedures to be included in the Financial Information for the nine months ended June 30, 2009. To the Knowledge of Sellers, since June 30, 2009, the Business has not incurred any Liability (that were individually or in the aggregate material to the Business) other than (i) Liabilities not required to be reflected on a balance sheet prepared on a basis consistent with the Practices and Procedures used in preparing the Financial Information for the nine months ended June 30, 2009 which have been incurred in the ordinary course of business in all material respects consistent with past practice subsequent to the date hereof or in connection with any of the transactions permitted or contemplated by this Agreement (including the Pre-Closing Brazil Spin Off Transactions); and (ii) Liabilities that, consistent with the Practices and Procedures used in preparing the Financial Information for the nine months ended June 30, 2009 and Section 2.7(a), should be reflected on the Final Closing Balance Sheet and that (x) have been incurred in the ordinary course of business in all material respects consistent with past practice subsequent to June 30, 2009; and (y) will be fully reflected or reserved against on the Final Closing Balance Sheet to the extent required by Section 2.7(a) . It is understood that for purposes of this Section 3.3(b) only, “Knowledge of Sellers” shall mean the knowledge that the persons listed on part I of Appendix H should have had after reasonable inquiry, including after due inquiry of the persons identified on part II of Appendix H .

 

Section 3.4      Absence of Certain Changes or Events . Except as set forth in Section 3.4 of the Sellers Disclosure Letter, as otherwise disclosed in this Agreement or as otherwise contemplated or permitted by this Agreement, since June 30, 2009 to the date of this Agreement, there has not been any Material Adverse Effect and the Seller US, the Acquired Companies and the Pre-Restructuring Companies have conducted the Business in the ordinary and usual course and have not, with respect to the Business, other than in the ordinary course of business: (i) sold, assigned, Encumbered, pledged or otherwise transferred any Business Assets that are material to the Business; (ii) acquired an interest of five percent (5%) or more in any Person or acquired a substantial portion of the assets or business of any Person or any division or line of business thereof, which in any case is, individually or in the aggregate, material to the Business; (iii) made any capital expenditures or commitments for any capital expenditures relating to the Business other than (A) in accordance with the Business’ fiscal year 2009 capital expenditure plan previously made available to Buyer, (B) in connection with the repair or replacement of facilities destroyed or damaged due to casualty or accident (whether or not covered by insurance) or (C) otherwise in an aggregate amount for all such capital expenditures made pursuant to this clause (C) not to exceed $1.0 million in the aggregate; (iv) terminated or materially amended any Material Business Contract or IP Contract; (v) (a) disposed of or permitted to lapse any rights to Intellectual Property material to the Business and included in the Business Intellectual Property or Shared Intellectual Property, or disclosed to any Person, any material Trade Secrets included in the Business Intellectual Property or Shared Intellectual Property, or (b) compromised or settled any one or more actions or suits or instituted any action or suits concerning any Intellectual Property material to the Business and included in the Business Intellectual Property or Shared Intellectual Property; (vi) suffered any material damage, destruction or other casualty loss (not covered by insurance) to the Business Assets; (vii) except for (1) merit increases, (2) other increases in the ordinary course of business and consistent with past practice, (3) if required by Law, existing employment agreements or collective bargaining agreements, or (4) in connection with changes to employee benefit plans or arrangements applicable to covered employees generally and not disproportionately affecting Business Employees, increased the compensation payable or to become payable by Seller US, an Acquired Company or a Pre-Restructuring Company to any of the Business Employees or increased any bonus, insurance, pension or other employee benefit plan, payment or arrangement made by Seller US, an Acquired Company or a Pre-Restructuring Company for or with any such Business Employees; (viii) made any material change in any accounting method, practice or principle or in any system of internal accounting controls, other than as required by applicable accounting or regulatory authority applicable to the Business; or (ix) entered into an agreement to do any of the foregoing.
 

     Section 3.5      Real Property .

(a)     Except as set forth in Section 3.5(a) of the Sellers Disclosure Letter, an Acquired Company or Seller US has, or will on the Closing Date have, ownership title to, or a valid leasehold interest in, the Real Property, as the case may be, free and clear of all Encumbrances, other than Permitted Encumbrances.

(b)     Except as set forth in Section 3.5(b) of the Sellers Disclosure Letter, to Knowledge of Sellers, (i) the Real Property is in material compliance with all applicable real estate, real property, building, zoning, subdivision, land use or similar Laws (collectively, the “ Real Property Laws ”), and (ii) the current use or occupancy of the Real Property or operation of the Business thereon does not violate in any material respect any Real Property Laws. None of the Sellers, the Acquired Companies or the Pre-Restructuring Companies received any written notice of violation of any Real Property Laws which has not been resolved. Except as set forth in Section 3.5(b) of the Sellers Disclosure Letter, all Taxes related to the Real Property have been fully and duly paid to the extent they are due and payable prior to the date of this Agreement or the Closing Date, as applicable.

(c)     The representations and warranties contained in this Section 3.5 shall be the exclusive representations and warranties with respect to the Real Property or Real Property Laws, and notwithstanding any other provision contained in this Agreement to the contrary, no other representation or warranty is made in this Agreement with respect to the Real Property.

Section 3.6      Business Assets . Except as set forth in Section 3.6(a) of the Sellers Disclosure Letter or as otherwise provided in this Agreement or the Ancillary Agreements, Seller US, a Pre-Restructuring Company or an Acquired Company owns, leases or has the legal right to use all of the Business Assets (excluding the Real Property, which is the subject of Section 3.5 , and Intellectual Property, which is the subject of Section 3.14 ) and has good title to (or in the case of leased Business Assets, valid leasehold interest in) all Business Assets (excluding the Real Property, which is the subject of Section 3.5 , and Intellectual Property, which is the subject of Section 3.14 ), free and clear of all Encumbrances, except for Permitted Encumbrances. Except (i) as set forth in Section 3.6(b) of the Sellers Disclosure Letter and (ii) for the Excluded Assets, the Business Assets, together with the rights granted to Buyers pursuant to this Agreement and the Ancillary Agreements and any other agreements to be entered into pursuant hereto or thereto, will constitute on the Closing Date substantially all of the assets necessary to conduct the Business in the same manner in all material respects as the Business is presently conducted by the Sellers and their Affiliates (including the Acquired Companies, the Pre-Restructuring Companies) and Seller US.

     Section 3.7      Litigation . Except as set forth in Section 3.7 of the Sellers Disclosure Letter, as of the date hereof, there is no material action, suit or proceeding pending or, to Sellers’ Knowledge, threatened against Sellers and their Affiliates, including Seller US, an Acquired Company or a Pre-Restructuring Company, with respect to the Business or the Business Assets or Business Liabilities, at law, in equity or otherwise, in, before, or by, any court, arbitrator or Governmental Authority. Except as set forth in Section 3.7 of the Sellers Disclosure Letter, there are no material unsatisfied judgments or material outstanding or binding orders, injunctions, decrees, stipulations or awards (whether rendered by a court, an administrative agency or by an arbitrator) against any of the Business Assets or against Sellers and their Affiliates, including Seller US, an Acquired Company or a Pre-Restructuring Company, with respect to the Business. Notwithstanding the foregoing, no representation or warranty is made under this Section 3.7 in respect of any Intellectual Property matters which are the subject of Section 3.14.

     Section 3.8      Compliance with Law . Except as set forth in Section 3.8(a) of the Sellers Disclosure Letter, the Business is being conducted in compliance in all respects with applicable Law, except for possible violations which, individually or in the aggregate, would not materially adversely affect the financial condition or results of operation of the Business taken as a whole. Except as set forth in Section 3.8(b) of the Sellers Disclosure Letter, all Permits required to conduct the Business, as currently conducted, have been obtained (except where the failure to obtain such Permits would not materially adversely affect the financial condition or results of operations of the Business taken as a whole) and are in full force and effect and are being complied with in all material respects. Notwithstanding the foregoing, no representation or warranty is made under this Section 3.8 in respect of any (i) matters relating to the Real Property, and compliance of the Real Property with Laws, which are the subject of Section 3.5 , (ii) employee benefit matters which are the subject of Section 3.13 , (iii) Intellectual Property matters which are the subject of Section 3.14 , (iv) matters relating to Environmental Laws and Environmental Permits or the environmental condition of any of the Business Assets or the Business Locations which are the subject of Section 3.16 and (v) matters relating to Taxes which are the subject of Section 3.17 .

     3.9      Business Contracts .

(a)     Section 3.9(a) of the Sellers Disclosure Letter contains a complete and accurate list of the following written Business Contracts (a copy of each of which has been made available to Buyers) to which Seller US, an Acquired Company or a Pre-Restructuring Company is a party as of the date hereof (but excluding (a) Business Contracts between the Acquired Companies and (b) Business Contracts that will be between the Acquired Companies following the Pre-Closing Spin Off Transactions and the Pre-Closing Mexico Employee Transfer Transaction) and :

       (i)     all Business Contracts with any Person containing any provision or covenant prohibiting or limiting the ability of an Acquired Company to engage in any business activity or compete with any Person or prohibiting or limiting the ability of any Person to compete with any Acquired Company;

        (ii)    all partnership, joint venture, stockholders’ or other similar Business Contracts between any Acquired Company and any Person;

        (iii)    all Business Contracts relating to any Third Party Indebtedness;

        (iv)   all Business Contracts with each distributor, dealer, manufacturers’ representative, sales agency or franchisee that, during the fiscal year ended September 28, 2008, or during the nine (9) months ended June 30, 2009, that accounted for more than 1.0% of the gross sales revenue of the Business during either period;

        (v)   all Business Contracts relating to the future disposition or acquisition of any Business Assets, other than dispositions or acquisitions in the ordinary course, in accordance with the provisions of this Agreement, and other than this Agreement and the Ancillary Agreements, and other than Contracts providing for the future disposition or acquisition of any item with a value less than $1.0 million or other dispositions in the aggregate not greater than $1.0 million and for any individual item not greater than $500,000;

        (vi)  all Business Contracts that (A) limit or contain restrictions on the ability of any Acquired Company to declare or pay dividends on, to make any other distribution in respect of or to issue or purchase, redeem or otherwise acquire its capital stock (or equity interests), to incur Indebtedness, to incur or suffer to exist any Encumbrance, to purchase or sell any Business Assets, to change the lines of business in which it participates or engages or to engage in any business activities, or (B) require any Acquired Company to maintain specified financial ratios or levels of net worth or other indicia of financial condition;

        (vii)  all Business Contracts which require any Acquired Company to purchase its total requirements of any product or service from a third party or that contains “take or pay” provisions;

        (viii) all Business Contracts for the sale of products or provision of services to any Governmental Authority;

         (ix)  all Business Contracts for any capital expenditure or leasehold improvement in any one case in excess of $1.0 million;

         (x)   all leases of personal property where the annual lease payments exceed $200,000 in the aggregate; and

         (xi)  all leases of Real Property where the annual rental payments under an individual lease exceed $200,000 in the aggregate.      

(b)     The Business Contracts listed (or required to be listed) in Section 3.9(a) of the Sellers Disclosure Letter are referred to collectively herein as the “ Material Business Contracts .” Each Material Business Contract is, as of the date hereof, valid and is in full force and effect in accordance with the terms of such Material Business Contract. Except as set forth in Section 3.9(b) of the Sellers Disclosure Letter, as of the date hereof, there is no material default or claim of material default under any Material Business Contract, and no event has occurred that, with the passage of time or the giving of notice or both, would constitute a default by Seller US, an Acquired Company or a Pre-Restructuring Company or, to Sellers’ Knowledge, any other party thereto under any Material Business Contract, or would permit modification, acceleration, or termination of any Material Business Contract, or result in the creation of an Encumbrance (other than a Permitted Encumbrance) on any of the Business Assets, other than such defaults, claims or events the effect of which would not materially adversely affect the financial condition or results of operations of the Business taken as a whole. Notwithstanding the foregoing, no representation or warranty is made under this Section 3.9 (a) or (b) in respect of any IP Contracts which are the subject of Section 3.14.

Section 3.10      Consents and Approvals . The execution, delivery and performance of this Agreement and the Ancillary Agreements by Sellers (and the execution, delivery and performance of the agreements and other documents in connection with the Pre-Closing Spin Off Transactions by the Acquired Companies and the Pre-Restructuring Companies) do not and will not require any consent, approval, authorization or other action by, or filing with or notification to, any Governmental Authority, except (a) as set forth in Section 3.10 of the Sellers Disclosure Letter, (b) for the notification requirements of the HSR Act and any Foreign Competition Law, (c) where the failure to obtain such consent, approval, authorization or action, or to make such filing or notification, would not prevent or materially delay the consummation by Sellers of the transactions contemplated by this Agreement, the Ancillary Agreements or the Pre-Closing Spin Off transactions, and (d) as may be necessary as a result of facts or circumstances relating solely to Buyers.

     Section 3.11      Acquired Company Capital Stock . The authorized and issued capital stock (or equivalent equity interests) of each Acquired Company as of the Closing Date will be as set forth in Appendix A . As of the Closing Date, Sellers Brazil will be the record and beneficial owners of all of the outstanding Brazil Shares free and clear of all Encumbrances and Sellers Mexico will be the record and beneficial owners of all of the outstanding Mexico Shares free and clear of all Encumbrances. As of the Effective Time, Buyer Brazil will be the record and beneficial owners of all of the outstanding Brazil Shares free and clear of all Encumbrances and Buyers Mexico will be the record and beneficial owners of all of the outstanding Mexico Shares free and clear of all Encumbrances. The Acquired Company Shares owned by Sellers as of the Closing Date will have been validly issued and will be fully paid and non-assessable. Except as set forth in Section 3.11 of the Sellers Disclosure Letter, none of the Acquired Company Shares owned by Sellers as of the Closing Date will be subject to any shareholders agreements, limited liability company agreements, voting trusts or proxies, with respect to the voting thereof and there will be no outstanding warrants, options, rights, convertible or exchangeable securities or other Contracts (other than this Agreement and other than any such Contract solely between Acquired Companies) pursuant to which a Seller or its Affiliates, including, a Pre-Restructuring Company or an Acquired Company, will be obligated to issue, sell, purchase, return or redeem any Acquired Company Shares.

     Section 3.12      Employees; Labor Relations .

(a)     Except as disclosed in Section 3.12(a) of the Sellers Disclosure Letter, (i) there are no suits, actions, arbitrations, judicial, administrative or other proceedings pending, or to the Sellers’ Knowledge, threatened, between any Acquired Company, on the one hand, and any employee or employees of the Business, on the other hand, which would materially adversely affect the financial condition or results of operation of the Business taken as a whole, and (ii) there are no unfair labor practice complaints and no claim for discrimination or unfair dismissal has been brought against any Acquired Company before the National Labor Relations Board, or any other Governmental Authority, court or employment tribunal which, if adversely determined, would materially adversely affect the financial condition or results of operation of the Business taken as a whole.

(b)     Except as disclosed on Section 3.12(b) of the Sellers Disclosure Letter, there has been no work stoppage, strike or other concerted action by employees of the Business or any written threat thereof during the 12 months preceding the date of this Agreement. Except as disclosed in Section 3.12(b) of the Sellers Disclosure Letter, during the 12 months preceding the date of this Agreement, Sellers or any of their Affiliates, including Seller US, the Pre-Restructuring Companies and the Acquired Companies, in each case with respect to the Business, have complied in all respects with all applicable Laws relating to the employment of labor, including those relating to equal employment opportunity, wages, hours, compensation, benefits, occupational health and safety, payment and withholdings of taxes and collective bargaining, other than any noncompliance which has not materially adversely affect the financial condition or results of operation of the Business taken as a whole.

(c)     Except as set forth in Section 3.12(c) of the Sellers Disclosure Letter, as of the date hereof, none of Seller US, an Acquired Company or a Pre-Restructuring Company is a party to, or bound by, any material labor agreement or collective bargaining agreement in respect to the Business Employees.

Section 3.13      Certain Employee Benefit Plans .

(a)      Foreign Plans . All material benefit plans, contracts or arrangements currently covering Business Employees which would be described in Section 3.13(b) but for the fact that such plans are maintained outside the jurisdiction of the United States (but excluding plans maintained by a Governmental Authority) are listed in Section 3.13(a) of the Sellers Disclosure Letter (the “ Foreign Plans ”), and a true and complete copy of the current plan text and amendments thereto of each Foreign Plan constituting part of the Business Assets has been provided or made available to Buyers. Except as would not, either individually or in the aggregate, materially adversely affect the financial condition or results of operation of the Business taken as a whole, and except as set forth in Section 3.13(a) of the Sellers Disclosure Letter:

(i)     Where required by Law, each of the Foreign Plans has obtained from the Government Authorities having jurisdiction with respect to such plan any required determinations that such plans are in compliance with the laws and regulations of any government.

(ii)     There are no pending investigations by any Governmental Authority involving the Foreign Plans, no claims pending or, to Sellers’ Knowledge, threatened (except for claims for benefits payable in the normal operation of the Foreign Plans), suits or proceedings against any Foreign Plan or asserting any rights or claims to benefits under any Foreign Plan, other than benefits payable in the ordinary course of the operations of the Foreign Plans.

(iii)     To the Knowledge of Sellers, the Foreign Plans are in compliance in all respects with all applicable Laws.

(b)      ERISA Plans .

(i)     All benefit plans, contracts or arrangements maintained for the benefit of Business Employees, including “employee benefit plans” within the meaning of Section 3(3) of ERISA and plans of deferred compensation, but excluding the Foreign Plans (the “ Benefit Plans ”), are listed in Section 3.13(b) of the Sellers Disclosure Letter.

(ii)     Except as would not, either individually or in the aggregate, materially adversely affect the financial condition or results of operation of the Business taken as a whole:

(A)

No Business Asset is subject to any Encumbrance under ERISA  Section 302(f) or Code section 412(n), ERISA Section 4068 or arising out of any action filed under ERISA Section 4301(b).

 

(B)

None of Sellers nor any other employer (an “ ERISA Affiliate ”) that is, or was at any time after January 1, 2000, together with the Seller, treated as a “single employer” under Section 414(b), 414(c) or 414(m) of the Code, has incurred any liability under Section 4062, 4063, 4064 or 4069 of ERISA which could reasonably be expected to subject Buyers or any Business Asset to such liability.

 

(C)

None of Sellers nor any ERISA Affiliate, while an ERISA Affiliate, has any currently outstanding withdrawal liability, within the meaning of Section 4201 of ERISA, or any currently outstanding contingent withdrawal liability under Section 4204 of ERISA, to any multiemployer pension plan, which liability could reasonably be expected to become a liability of Buyer, or to impose any Encumbrance which in the aggregate would materially adversely affect the financial condition or results of operation of the Business taken as a whole. There are no outstanding contributions currently due to any such multiemployer plan.

 

(D)

All Benefit Plans, other than “multiemployer plans” within the meaning of Section 3(37) of ERISA, maintained for the benefit of Transferred Employees (the “ Plans ”) are in material compliance with ERISA, to the extent applicable, and their terms. There is no material pending or to Sellers’ Knowledge, threatened, litigation relating to the Plans. There are no outstanding contributions currently due to the Plans.

 

(E)

The Benefit Plans which are “employee pension benefit plans” within the meaning of Section 3(2) of ERISA and which are intended to meet the qualification requirements of Section 401(a) of the Code (each, a “ Pension Plan ”) have received determination letters from the IRS to the effect that such Pension Plans are qualified and the related trusts are exempt from federal income taxes and no determination letter with respect to any Pension Plan has been revoked nor, to Sellers’ Knowledge, is there any reason for such revocation, nor has any Pension Plan been amended since the date of its most recent determination letter in any respect that would adversely affect its qualification.

 

     Section 3.14      Intellectual Property .

(a)     Section 3.14(a) of the Sellers Disclosure Letter sets forth a list of the Business Intellectual Property and sets forth a correct and complete list, as of the date hereof, of all registered or applied-for Trademarks, Copyrights, and Patents, included in the Business Intellectual Property , specifying as to each item, as applicable: (i) the owner of the item; (ii) the jurisdiction in which the item is issued or registered or which any application for issuance or registration has been filed; (iii) the respective issuance, registration or application number of such item; and (iv) the date of application and issuance or registration of the item. Sellers and its Affiliate exclusively own (beneficially, and of record where applicable) all of the Intellectual Property items set forth in Section 3.14(a) of the Sellers Disclosure Letter, free and clear of all Encumbrances, except Permitted Encumbrances (if any), and such Intellectual Property is subsisting and, to Sellers’ Knowledge, valid and enforceable.

(b)     Section 3.14(b)(i), (ii), and (iii) of the Sellers Disclosure Letter lists, as of the date hereof, all licenses, sublicenses, consents and other contracts and agreements, whether written or oral (i) by which Sellers or their Affiliates, including Seller US, an Acquired Company or a Pre-Restructuring Company is authorized, is granted or obtains the right to use any Intellectual Property material to the Business (other than readily available off-the-shelf computer programs), and (ii) by which Sellers or their Affiliates, including Seller US, an Acquired Company or a Pre-Restructuring Company licenses or otherwise authorizes or permits a third party to use, enforce or register any (A) material Business Intellectual Property, other than pursuant to purchase orders or other contracts with original equipment manufacturers or other customers in the ordinary course of Business and (B) Intellectual Property for Restricted Activities, and (iii) by which Sellers or their Affiliates, including Seller US, an Acquired Company or a Pre-Restructuring Company are restricted in its right to use, enforce or register any (X) material Business Intellectual Property or (Y) Shared Intellectual Property in a manner that prevents Licensors from granting the rights under the Shared Intellectual Property License Agreement (the “ IP Contracts ”). Each IP Contract, as of the date hereof, is valid and is in full force and effect in accordance with the terms of such IP Contract. Except as set forth in Section 3.14(b)(i) or (ii) of the Sellers Disclosure Letter, there is no material default or claim of default under any IP Contract, and no event has occurred that, with the passage of time or the giving of notice or both, would constitute a default by Sellers or a Seller Affiliate (including an Acquired Company) or, to Seller’s Knowledge, any other party thereto under any IP Contract, or would permit modification, acceleration, or termination of any IP Contract.

(c)     Except as set forth in Section 3.14(c)(i) of the Sellers Disclosure Letter, during the period owned or licensed by Seller US, an Acquired Company or a Pre-Restructuring Company, none of them has received any written notice from any other Person challenging its right to use any of the Business Intellectual Property. Except as set forth in Section 3.14(c)(ii) of the Sellers Disclosure Letter, no action, suit or proceeding alleging infringement, misappropriation, or other violation of any Business Intellectual Property is pending or threatened against any Person by Sellers or any of their Affiliates (including the Acquired Companies). Except as set forth in Section 3.14(c)(iii) of the Sellers Disclosure Letter, as of the date hereof, there is no material action, suit or proceeding alleging infringement, misappropriation or other violation of any Person’s Intellectual Property pending or, to Sellers’ Knowledge, threatened against Sellers or their Affiliates, including Seller US, an Acquired Company or a Pre-Restructuring Company, with respect to the Business. The Business Intellectual Property together with the rights to Intellectual Property being granted pursuant to the Ancillary Agreements constitute substantially all of the Intellectual Property necessary to conduct the Business in the same manner in all material respects as the Business is presently conducted.

(d)     Except as set forth in Section 3.14(d) of the Sellers Disclosure Letter, Seller US, the Acquired Companies and the Pre-Restructuring Companies own all right, title and interest in and to, or have a license, sublicense, permission or right to use, all of the Business Intellectual Property, except for any to be licensed pursuant to this Agreement and except for any the failure to own or have such a license, sublicense, permission or right to use would not materially adversely affect the financial condition or results of operations of the Business taken as a whole.

(e)     To the Sellers’ Knowledge, the conduct of the Business as conducted as of the Effective Time does not infringe, misappropriate, or otherwise violate, and has not infringed, misappropriated, or otherwise violated, any Person’s Intellectual Property rights in a material respect.

(f)     To the Sellers’ Knowledge, no Person is materially infringing, misappropriating, or otherwise violating any Business Intellectual Property.

Section 3.15      Brokers and Finders . Except for the retention of such Persons, the fees and expenses of which will be paid by Sellers in accordance with Section 11.6 , Sellers has not employed any broker, finder or investment banker or incurred any liability for any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement and the Ancillary Agreements.

Section 3.16      Environmental Matters . Sellers have provided Buyers with access to all “Phase I” environmental site assessments commissioned by a Seller or its Affiliates Related to the Brazil Location and the Mexico Location, and to copies of the soil and ground water studies relating to environmental conditions at the Brazil Location and the Mexico Location commissioned by a Seller or its Affiliates Related to the Business, that were prepared by third parties during the three (3) year period ending on the date of this Agreement (the “ Environmental Reports ”). To Sellers’ Knowledge, except as disclosed in the Environmental Reports or Section 3.16 of the Sellers Disclosure Letter, or as would not materially adversely affect the financial condition or results of operations of the Business taken as a whole:

(a)     The Business Assets are in compliance with all applicable Environmental Laws and all Permits, certifications, licenses, approvals, registrations and authorizations required by the Environmental Laws (“ Environmental Permits ”).

(b)     None of Seller US, an Acquired Company or a Pre-Restructuring Company have received in connection with the Business Assets any unresolved written notice of any citation, summons, order, complaint, penalty, investigation or review by any Governmental Authority (i) with respect to any alleged violation by Seller US, an Acquired Company or a Pre-Restructuring Company of any Environmental Law, (ii) with respect to any alleged failure of Seller US, an Acquired Company or ARM Brazil to have any Environmental Permit or (iii) with respect to any generation, treatment, storage, recycling, transportation or disposal of any Hazardous Substance.

(c)     There is no claim with respect to Environmental matters related to the Business pending or, to the Knowledge of Sellers, threatened against Seller US, an Acquired Company or a Pre-Restructuring Company or, to the Knowledge of Seller, against any Person whose liability for any such claim Seller US, an Acquired Company or a Pre-Restructuring Company have or may have retained or assumed either contractually or by operation of Law;

(d)     To the Knowledge of Sellers, there are no past or present actions, activities, circumstances, conditions, events or incidents, which could form the basis of any claim with respect to Environmental matters related to the Business against Sellers or their Affiliates.

(e) Except as set forth in Section 3.16(e) of the Sellers’ Disclosure Schedule Letter, by the Closing Date the Acquired Companies shall have all necessary Environmental Permits to conduct the Business as currently conducted and such Environmental Permits shall be in full force and effect and will be complied with in all respects.

Section 3.17      Taxes . Except as set forth in Section 3.17 of the Sellers Disclosure Letter;

(a)     Seller US, the Acquired Companies and the Pre-Restructuring Companies, with respect to the Business, have filed or caused to be filed all Tax Returns required to be filed with respect to the Business and have paid or caused to be paid all Taxes shown to be due on such Tax Returns or otherwise due. Such Tax Returns are accurate and complete in all material respects. Neither the Business nor the Acquired Companies are liable for the Taxes of any Person as a transferee, successor, by contract, Law, regulation, rule, or otherwise. The Acquired Companies are in material compliance with all applicable Tax Laws. To the extent Related to the Business, Seller US and the Pre-Restructuring Companies are in material compliance with all applicable Tax Laws.

(b)     No presently effective waivers or extensions of statutes of limitation with respect to Taxes have been given with respect to an Acquired Company for any taxable years.

(c)     None of the Acquired Companies has any agreement with any Person regarding the filing of Tax Returns or relating to the sharing of Tax benefits or liabilities with such Persons.

(d)     None of the Acquired Companies is currently the subject of any Audit or examination with respect to Taxes. To the extent Related to the Business, none of Seller US or the Pre-Restructuring Companies is currently the subject of any Audit or examination with respect to Taxes.

(e)     There are no pending actions, suits or assessments pending with respect to Taxes of the Acquired Companies (or to the extent Related to the Business, none of Seller US or the Pre-Restructuring Companies) nor has any of the Acquired Companies (or to the extent Related to the Business, none of Seller US or the Pre-Restructuring Companies) received any written request for information related to Tax matters or notifications or notices of deficiency or proposed adjustments for any amount of Taxes, by any Governmental Authorities.

(f)     All amounts required to be withheld or collected for payment of Taxes of the Acquired Companies (or to the extent Related to the Business, none of Seller US or the Pre-Restructuring Companies), including from employees’ salaries, wages and other compensation, have been collected or withheld, and if due, paid to the appropriate taxing authorities.

(g)     None of the Acquired Companies has ever been a member of an affiliated, combined, consolidated or unitary group for purposes of filing any Tax Return.

(h)     To the Knowledge of Sellers, there are no claims by a Tax authority in a jurisdiction where any Acquired Company does not file Tax Returns that any such Acquired Company is or may be subject to taxation by that jurisdiction.

(i)     None of the Acquired Companies is a party to any agreement, contract, arrangement or plan that has resulted, or would result, in a payment that would not be fully deductible, as a result of Sections 280G or 162(m) of the Code or any similar provision of non-U.S., state or local Law.

(j)     None of the Acquired Companies will be required to include any item of income or gain in, or exclude any item of deduction or loss from, taxable income for any Tax period (or portion thereof) ending after the Closing Date as a result of any: (i) change in method of accounting made subsequent to the Closing Date by Sellers for a Tax period ending prior to the Closing Date; (ii) “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income tax Law) executed prior to the Closing Date; (iii) installment sale made prior to the Closing Date; or (iv) the use of the cash, modified cash or modified accrual method of accounting.

(k)     There are no tax rulings or requests for ruling relating to any of the Acquired Companies (or to the extent Related to the Business, Seller US or the Pre-Restructuring Companies) that could be material on the liability for Taxes of such entities for any period after the Closing Date.

(l)     There are no powers of attorney (that are currently in force) which have been granted with respect to Income Taxes of any of the Acquired Companies (or to the extent Related to the Business, Seller US or the Pre-Restructuring Companies).

Section 3.18      Business Receivables . Except as set forth in Section 3.18 of the Sellers Disclosure Letter, all Business Receivables included in the Business Assets at the Effective Time, will represent bona fide sales of goods or services made in the ordinary course of business by Seller US, an Acquired Company or a Pre-Restructuring Company with respect to the Business. Except as set forth in Section 3.18 of the Sellers Disclosure Letter, Seller has not received written notice that the account party (payor) of any of the Business Receivables is disputing the amount or payment of any of such Business Receivables, except in the ordinary course of the business and except as may be reflected in the reserves with respect to such receivables set forth in the latest balance sheet included in the Financial Information or to be set forth in the Final Closing Balance Sheet.

Section 3.19      Business Inventory . Except as set forth in Section 3.19 of the Sellers Disclosure Letter, the Business Inventory included in the Business Assets at the Effective Time will be of good quality usable and saleable in the ordinary course of business and in such quantities which will not materially exceed levels which are reasonable in the circumstances of the Business taken as a whole as of that date, subject to reserves for obsolete and slow-moving Inventory to be set forth in the Closing Balance Sheet in accordance with the Practices and Procedures.

Section 3.20      Business Equipment . Except as set forth on Section 3.20 of the Seller Disclosure Letter, the material items of equipment included in the Business Assets which are used by Sellers and their Affiliates, including the Acquired Companies or the Pre-Restructuring Companies in the current manufacturing processes of the Business are in reasonable working condition and state of repair taking into account reasonable wear and tear and the age of the equipment.

Section 3.21     Substantial Customers and Suppliers . Section 3.21(a) of the Sellers Disclosure Letter lists each of the eleven (11) largest customers of the Business on the basis of revenues for goods sold or services provided for the most recently completed fiscal year, indicating for each such customer its vehicle platforms for which purchase orders for products of the Business are in effect with Sellers and their Affiliates, including Seller US, an Acquired Company or a Pre-Restructuring Company. Section 3.21(b) of the Sellers Disclosure Letter lists each of the eight (8) largest production material suppliers of the Business on the basis of cost of goods or services purchased for the most recently completed fiscal year. Except as disclosed in Section 3.21(c) of the Sellers Disclosure Letter, (a) no such customer or supplier has ceased or materially reduced its purchases from or sales or provision of services to the Business since June 30 ^, 2009 to the date of this Agreement, or (b) has received a written notice or other letter in writing to cease or materially reduce such purchases or sales or provision of services after the date of this Agreement, other than such reductions in purchases or sales that are caused by general market conditions.

Section 3.22      Acquired Company Guarantees . Except as disclosed in Section 3.22 of the Sellers Disclosure Letter, none of Sellers and their Affiliates, including Seller US, any Acquired Company or any Pre-Restructuring Company has entered into any written guarantee of any of the liabilities of any customer, supplier or other Person to whom any of them sells goods or provides services Related to the Business.

Section 3.23     Bank and Brokerage Accounts . Section 3.23 of the Sellers Disclosure Letter sets forth (a) a true and complete list of the names and locations of all banks, trust companies, securities brokers and other financial institutions at which any Acquired Company or Pre-Restructuring Companies has an account or safe deposit box or maintains a banking, custodial, trading or other similar relationship with respect to the Business; and (b) a true and complete list and description of each such account, box and relationship, indicating in each case the account number and the names of the respective officers, employees, agents or other similar representatives of any Acquired Company having signatory power with respect thereto.

Section 3.24      Certain Unlawful Actions . To the Knowledge of Sellers, none of Seller US, the Acquired Companies or the Pre-Restructuring Companies nor any director or officer of any Acquired Company, has, directly or indirectly, with respect to the Business, used any corporate funds for unlawful contributions, gifts, entertainment, or other unlawful expenses relating to political activity, made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns from corporate funds, or made any unlawful bribe, rebate, payoff, influence payment, kickback, or other unlawful payment.

Section 3.25     Product Liability and Recall . Except as described on Section 3.25 of the Sellers Disclosure Letter, there are no actions, suits or proceedings before any court or Governmental Authority pending or, to Sellers’ Knowledge, threatened against Seller US, an Acquired Company or a Pre-Restructuring Company with respect to the Business by a third party seeking to recover from Seller US, an Acquired Company or a Pre-Restructuring Company damages for personal injury or property damage caused by a defective product of the Business which was sold by Seller US, an Acquired Company or a Pre-Restructuring Company prior to the Effective Time. Except as described on Section 3.25 of the Seller Disclosure Letter, there is no pending or, to Sellers’ Knowledge, threatened recall by any Governmental Authority or customer of the Business of any products of the Business which were sold by Seller US, an Acquired Company or a Pre-Restructuring Company prior to the Effective Time.

Section 3.26      Payment of Liabilities . Sellers, the Acquired Companies and the Pre-Restructuring Companies are able to pay all of their Liabilities and debts as such Liabilities and debts mature or become due in the usual course of business. As of the Closing Date, none of the Acquired Companies will have declared any dividend or distribution that will not be fully paid.

Section 3.27      Powers of Attorney . Except as listed in Section 3.27 of the Sellers Disclosure Letter, there are no powers of attorney (that are currently in force) which have been granted to any Person with respect to the Acquired Companies. Notwithstanding the foregoing, no representation or warranty is made under this Section 3.27 in respect of any Powers of Attorney necessary to effectuate the Business Intellectual Property assignments contemplated under this Agreement .

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyers, jointly and severally, represent and warrant to Sellers as follows as of the date of this Agreement and, subject to any updated Buyers Disclosure Letter delivered by Buyers to Sellers prior to or at the Closing, as of the Closing Date:

Section 4.1      Organization and Authority of Buyers . Each Buyer has been duly formed, is validly existing and is in good standing under the laws of its jurisdiction of formation, with the requisite power (corporate or otherwise) and authority to own, operate or lease the properties that it purports to own, operate or lease and to carry on its business as now being conducted. Except as disclosed in Section 4.1 of the Buyers Disclosure Schedule, each Buyer has the full corporate power and authority to enter into this Agreement and the Ancillary Agreements and to perform its obligations hereunder and thereunder. This Agreement has been duly authorized, executed and delivered by each Buyer and constitutes a legal, valid and binding obligation of each Buyer, enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles, and no other proceedings on the part of Buyers are necessary to authorize this Agreement and the consummation of the transactions contemplated hereby.

Section 4.2     No Conflict . Neither the execution and delivery of this Agreement and such Ancillary Agreement to which Buyers is a party nor compliance by Buyers and such Acquired Companies with the terms and provisions of this Agreement and each such Ancillary Agreement will violate (a) any provision of the certificate of incorporation or by-laws or other similar organizational document of Buyers; or (b) any Law or any injunction, order or decree of any Governmental Authority to which a Buyer is subject, except in any such case for any violations, breaches, defaults or other matters that would not prohibit or materially impair either Buyers’ ability to perform its obligations under this Agreement or Buyers’ ability to perform its respective obligations under any of the Ancillary Agreements.

Section 4.3     Consents and Approvals . The execution, delivery and performance of this Agreement by Buyers and the Ancillary Agreements by Buyers that are parties thereto do not and will not require any consent, approval, authorization or other action by, or filing with or notification to, any Governmental Authority, except (a) as set forth in Section 4.3 of the Buyers Disclosure Letter, (b) for the notification requirements of the HSR Act and any applicable Foreign Competition Law, (c) where the failure to obtain such consent, approval, authorization or action, or to make such filing or notification, would not prevent or materially delay the consummation by Buyers of the transactions contemplated by this Agreement and the Ancillary Agreements and (d) as may be necessary as a result of facts or circumstances relating solely to Sellers.

Section 4.4     Brokers and Finders . Except for the retention of such Persons, the fees and expenses of which will be paid by Buyers in accordance with Section 11.6 , Buyers have not employed any broker, finder or investment banker or incurred any liability for any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement and the Ancillary Agreements.

Section 4.5     Financial Capability . Buyers have sufficient funds or debt and/or equity financing commitments in place to purchase the Acquired Company Shares and the Acquired US Assets on the terms and conditions contained in this Agreement and will have such funds and commitments on the Closing Date. Buyers have provided Sellers evidence of their available funding or copies of such financing commitments, as the case may be. Availability of funding and financing is not a condition to Buyers’ obligation to consummate the transactions contemplated by this Agreement.

Section 4.6     Investment . The Buyer Brazil and Buyers Mexico are acquiring the Acquired Company Shares solely for the purpose of investment and not with a view to, or for sale in connection with, any distribution thereof in violation of the Securities Act of 1933, as amended (the “ Securities Act ”). Each of Buyer Brazil and Buyers Mexico acknowledges the Acquired Company Shares are not registered under the Securities Act or any applicable state securities law or other applicable laws, and that the Acquired Company Shares may not be transferred or sold except pursuant to the registration provisions of such Securities Act or pursuant to an applicable exemption therefrom and pursuant to state securities laws and regulations as applicable. Each of Buyer Brazil and Buyers Mexico is an “accredited investor” within the meaning of Rule 501(a) promulgated under the Securities Act. Each of Buyer Brazil and Buyers Mexico has such knowledge and experience in financial and business matters and investments in general that make it capable of evaluating the merits and risks of purchasing the Acquired Company Shares. Each of Buyer Brazil and Buyers Mexico acknowledges that it has been afforded: (a) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of Sellers and the Acquired Companies concerning the merits and risks of investing in the Acquired Company Shares; (b) access to information about the Acquired Companies, their respective results of operations, financial condition and cash flow, and business, in each case sufficient to enable Buyers to evaluate whether to proceed with the execution and delivery of this Agreement and the purchase of the Acquired Company Shares; and (c) the opportunity to obtain such additional information that either Sellers or the Acquired Companies possess, or can acquire without unreasonable effort or expense, that is necessary to make an informed investment decision with respect to the execution and delivery of this Agreement and the consummation of the purchase of the Acquired Company Shares.

Section 4.7     Litigation . There is no suit, investigation, action or other proceeding pending or, to Buyers’ Knowledge, threatened before any court, arbitration tribunal, or judicial, governmental or administrative agency, against Buyers which would materially restrict or limit the ability of Buyers to perform their obligations hereunder or which seeks to prevent the consummation of the transactions contemplated herein.

Section 4.8      Payment of Liabilities . Buyers are able to pay all of their Liabilities and debts as such Liabilities and debts mature or become due in the usual course of business.

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CERTAIN COVENANTS OF SELLERS AND BUYERS

5.1      Access and Information .

(a)     Sellers shall permit Buyers and their representatives, after the date of this Agreement until the Closing, to have reasonable access solely for confirmatory diligence purposes, during regular business hours and upon reasonable advance notice, subject to Sellers’ right to have their representatives accompany Buyers’ representatives and subject to other reasonable rules and regulations of Sellers, to (i) the Business Assets; provided , however , Buyers shall not be permitted to perform any environmental site assessments or other testing, sampling or investigations without Sellers’ prior written consent, which consent shall be granted or withheld in Sellers’ sole discretion, (ii) the offices, facilities, properties and the financial, accounting and other books and records of Seller US, the Acquired Companies and the Pre-Restructuring Companies relating to the Business, and (iii) the appropriate management personnel of Sellers and their Affiliates, the Pre-Restructuring Companies and the Acquired Companies. Sellers shall furnish, or cause to be furnished, to Buyer any financial and operating data and other information with respect to the Business as Buyers shall from time to time reasonably request for the purpose of verifying the accuracy of the representations and warranties of Sellers in Article III . It is expressly understood by the Parties that, notwithstanding the provisions of this Section 5.1(a) , Sellers, in their sole discretion, may deny or restrict any access (i) involving likely breaches of applicable confidentiality agreements with third parties or possible waivers of any applicable attorney-client privileges; (ii) to any formulae, know-how, operating instructions or other proprietary knowledge of Sellers or any of their Affiliates (including the Acquired Companies) with respect to the products, materials and services used in or produced by the Business; or (iii) in the event Buyers are in material breach of this Agreement. It is further understood that Sellers shall be under no obligation to grant Buyers or their representatives any access if such access would, under the circumstances, unreasonably interfere with Sellers’ or their Affiliates’ (including the Acquired Companies) operations, activities or employees, or if such access would, in the reasonable judgment of Sellers, violate applicable antitrust or similar Laws, violate privacy Laws, violate labor Laws or contracts, or breach any provision of any contract. Prior to Closing and subject to Section 5.2 and any actions taken in order to cause the closings of the transactions contemplated hereby or any actions taken to enforce rights pursuant to this Agreement, with respect to any third parties with which a Seller or any Acquired Company has a direct business relationship, and any Governmental Authorities with jurisdiction over or which regulates Sellers, any Acquired Company, the Business or the Business Locations, Buyers shall not make any independent inquiry with respect to Sellers, any Acquired Company, the Business or the Business Locations without Sellers’ prior written consent, which consent may not be unreasonably withheld, and providing Sellers with the opportunity to participate in the independent inquiry, it being understood that for purposes hereof an “independent inquiry” shall mean a meeting whether by phone or in person by an officer, director or member of senior management of Buyers organized in order to address any matters relating to Sellers, any Acquired Company, the Business or the Business Locations.

 

(b)     All information provided or obtained pursuant to clause (a) above shall be held by Buyers in accordance with, and subject to the terms of, and shall constitute “Evaluation Material” under, the Confidentiality Agreement, dated May 8, 2009, between Iochpe Maxion S.A. and ArvinMeritor, Inc. (the “ Confidentiality Agreement ”). In addition Buyers agree to comply with Section 5.1(b) of the Buyers Disclosure Letter.

Section 5.2      Registrations, Filings, Notices and Licenses .

(a)     Subject to Sellers’ and Buyers’ additional obligations under paragraphs (b) and (c) below, Sellers and Buyers will, prior to and after the Closing, cooperate and use commercially reasonable efforts to make all registrations, filings and applications, to give all notices and to obtain any governmental transfers, orders, qualifications, Permits and waivers necessary for the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements (including the Pre-Closing Spin Off Transactions).

(b)     Sellers and Buyers shall use commercially reasonable efforts to take all actions necessary to make all filings required of each of them or their Affiliates under the HSR Act and the Foreign Competition Laws (the “ Competition Law Filings ”) with respect to the transactions contemplated hereby no later than the fifteenth (15 ^th ) Business Day following the date of this Agreement with respect to filings in Brazil and otherwise no later than the tenth (10 ^th ) Business Day following the date of this Agreement including with respect to filings in the United States and Mexico. The Competition Law Filings shall be in substantial compliance with the requirements of the applicable Laws. Each Party shall cooperate with the other Party to the extent necessary to assist the other Party in the preparation of its Competition Law Filings, to request early termination of the waiting period required by the HSR Act and any of the Foreign Competition Laws and, if requested, to promptly amend or furnish additional information thereunder. In addition, each of Buyers and Sellers shall as promptly as practicable comply with all Laws that are applicable to any of the transactions contemplated by this Agreement and the Ancillary Agreements and pursuant to which any consent, approval, advice, order or authorization of, or registration, declaration or filing with, such Governmental Authority is necessary (including the HSR Act and any applicable Foreign Competition Laws). Buyers and Sellers shall furnish to each other all such information as is necessary to prepare any such registration, declaration or filing. Buyers and Sellers shall keep each other apprised of the status of any communications with, and any inquiries or requests for additional information from, any Governmental Authority with respect to the transactions contemplated by this Agreement and the Ancillary Agreements. Buyers and Sellers shall bear the costs and expenses of their respective filings contemplated in this Section 5.2(b) ; provided , however , that Buyers shall pay the filing fees in connection with filings in Brazil and Mexico and Sellers in connection with filings in the US.

(c)     Each Buyer and each Seller agrees that it will, if necessary to enable Sellers and Buyers to consummate the transactions contemplated by this Agreement and the Ancillary Agreements, use commercially reasonable efforts to defend against any suits, actions or proceedings, judicial or administrative, challenging this Agreement or any of the Ancillary Agreements or the consummation of the transactions contemplated hereby or thereby, including by seeking to vacate or reverse any temporary restraining order, preliminary injunction or other legal restraint or prohibition entered or imposed by any court or other Governmental Authority that is not yet final and nonappealable; provided , however , that (i) Sellers and Buyers shall not be under any such obligation to take any commercially unreasonable actions to defend against any such actions or proceedings commenced by any Governmental Authority in respect of the HSR Act, any Foreign Competition Laws or other antitrust, competition, merger control or similar Laws, and (ii) Buyers and Sellers agree that they shall engage in active negotiations with, the FTC, the Antitrust Division and/or any other Governmental Authority to prevent the commencement of any action or proceeding seeking, and/or prevent the entry of, or effect the dissolution of, a decree, restraining or other order and/or preliminary or permanent injunction preventing the consummation, in whole or in part, of the transactions contemplated by this Agreement or any of the Ancillary Agreements.

 

Section 5.3      Conduct of Business .

(a)     Prior to the earlier to occur of the Closing or such time as this Agreement shall be terminated pursuant to Section 11.1, and except as otherwise contemplated or permitted by this Agreement (including Sections 5.16 , 5.17 , 5.19 and 5.23 ) or any of the Ancillary Agreements, set forth in Section 5.3(a) of the Sellers Disclosure Letter or consented to or approved in writing by Buyers, Sellers covenant and agree that they and the Acquired Companies shall operate the Business only in the ordinary course and use commercially reasonable efforts to preserve the properties, Business Assets, Business and relationships with suppliers and customers of the Business and shall not, other than (i) in the ordinary course of business or (ii) in connection with the cash management transactions contemplated in Section 5.16, the Pre-Closing Brazil Spin-Off Transactions, the Pre-Closing Mexico Employee Transfer or the Mexico Conversion (but with respect to clause (ii) only to the extent and in the manner contemplated herein), undertake any of the following with respect to the Business:

(i)      acquire any material Business Assets other than (A) in accordance with the Business’ fiscal year 2009 capital expenditure plan previously made available to Buyers, (B) in connection with the repair or replacement of Business Assets or facilities destroyed or damaged due to casualty or accident (whether or not covered by insurance) or (C) otherwise as permitted by clause (xvii) below;

 

(ii)     agree to assume or incur any Liabilities, or guarantee any such Liabilities, Related to the Business, other than in the ordinary course of business;

(iii)     agree to assume, incur or guarantee any Liabilities of any Person other than in the ordinary course of business;

(iv)     accelerate the rate of collection of accounts receivable (except accounts receivable from an Affiliate) and other than in the ordinary course of business in all material respects consistent with past practice;

(v)     except for cash dividends fully paid prior to Closing, declare or pay any in-kind dividend or make any other distribution to its stockholders or quotaholders (or set a record date for any such dividend or other distribution), or otherwise enter into any agreement or take any action that grants rights to receive any such dividend or other distribution to its stockholders;

(vi)     enter into any new line of business or discontinue, in whole or in part, any current line of business;

(vii)     authorize, recommend, propose, accept or announce an intention to adopt a plan of complete or partial liquidation or dissolution or declare or file for bankruptcy or judicial or extrajudicial reorganization of any kind;

(viii)     not settle any legal proceeding or any other claim, lawsuit or the like with respect to the Acquired Companies or the Business for an amount in excess of $500,000, or which would reasonably be likely to prevent or impair or delay the consummation of the transactions contemplated by this Agreement;

(ix)     not file amended Tax Returns, make elections other than in the ordinary course of business consistent with past practice, or settle or compromise any Tax Claims or proceedings;

(x)     dispose, sell, assign or otherwise transfer any Business Assets other than assets not deemed suitable for production or their uses or intended uses or beyond their useful lives;

(xi)     create an Encumbrance (other than a Permitted Encumbrance) on any of the Business Assets;

(xii)     enter into any leases of real or personal property or any renewals thereof involving a rental obligation exceeding $100,000 per annum in the aggregate;

(xiii)     except for increases in accordance with past practices, or if required by Law, existing employment agreements or collective bargaining agreements, materially increase the rate of compensation or the benefits payable to any of the Business Employees;

(xiv)     except as required by Law, establish or modify any (i) targets, goals or similar provisions in respect of any fiscal year under any Benefit Plan or employment contract or other compensation arrangement with or for employees or (ii) salary ranges, guidelines or similar provisions in respect of any Benefit Plan or any employment contract or other compensation arrangement with or for employees, in each case under (i) or (ii) except for establishments or modifications applicable to the employees covered generally and not disproportionately affecting Business Employees;

(xv)