MASTER PURCHASE AND SALE AGREEMENT

Eaton Corporation
2005 Annual Report on Form 10-K
Item 15 (b)
Exhibit 10.a

MASTER PURCHASE AND SALE AGREEMENT

BY AND BETWEEN

PERKINELMER, INC.

and

EATON CORPORATION

October 6, 2005

TABLE OF CONTENTS

- i -

- ii -

- iii -

Disclosure Schedule

- iv -

TABLE OF DEFINED TERMS

- v -

- vi -

- vii -

- viii -

MASTER PURCHASE AND SALE AGREEMENT

     This MASTER PURCHASE AND SALE AGREEMENT (the “ Agreement ”) is entered into as of October 6, 2005 by and between PerkinElmer, Inc., a Massachusetts corporation (“ PKI ”), and Eaton Corporation, an Ohio corporation (“ Buyer ”). PKI and Buyer are sometimes referred to herein individually as a “ Party ” and together as the “ Parties .”

INTRODUCTION

     1. PKI and certain of its direct and indirect subsidiaries are engaged in, among other matters, the business of developing, manufacturing, marketing, servicing and repairing sealing valve and pneumatic products and systems and ducting products for the aerospace and industrial market, and design and manufacturing support services for aircraft engine manufacturers and airframe OEMs (such business, as conducted by PKI and such subsidiaries on the date hereof, being referred to herein as the “ Business ”); provided , however ; that the definition of Business as used herein shall not include the business and operations of PKL, LLC, a Delaware limited liability company (“ PKL ”), which involves primarily the machining and assembly of tools used in the manufacture of valves, seals, bellows and pneumatic joints (the “ PKL Business ”);

     2. PerkinElmer Singapore Pte Ltd. (“PKI Singapore Parent”), in its capacity as a holder of outstanding shares of the capital stock of PKI Indonesia, a private limited company organized under the laws of Singapore and an indirect subsidiary of PKI, owns all of the outstanding shares of capital stock of Fluid Sciences Singapore Pte Ltd., a private limited company organized under the laws of Singapore (“ PKI Singapore ”); and PKI Singapore, in its capacity as a holder of outstanding shares of capital stock of PKI Indonesia (as defined below),

and PKI Singapore Parent together own all of the outstanding shares of capital stock of P.T. Fluid Sciences Batam, a corporation organized under the laws of Indonesia (“ PKI Indonesia ”);

     3. PKI, PKI Singapore and PKI’s indirect subsidiary PerkinElmer S.A.S., a corporation organized under the laws of France (“ PKI France ”, and together with PKI and PKI Singapore, the “ Asset Sellers ”), collectively own or lease all of the Acquired Assets (as defined in Section 1.1(b)). PKI, PKI Singapore and PKI France, in their capacity as the Asset Sellers, and PKI Singapore Parent and PKI Singapore, in their capacity as a holder of outstanding shares of capital stock of PKI Indonesia, are collectively referred to herein as the “ Sellers ”;

     4. Buyer desires to purchase from PKI Singapore Parent and PKI Singapore, and PKI desires to cause PKI Singapore Parent and PKI Singapore to sell to Buyer, all of the outstanding shares of capital stock of PKI Indonesia (the “ Stock ”), upon the terms and subject to the conditions set forth herein;

     5. Buyer desires to purchase from the Asset Sellers, and PKI desires, and desires to cause PKI France and PKI Singapore, to sell to Buyer, the Acquired Assets, subject to the assumption of certain liabilities and upon the terms and subject to the conditions set forth herein; and

     6. Although the Parties expect to enter into such ancillary agreements, deeds and instruments of conveyance and assumption as may be required under applicable law (including without limitation the laws of France) or otherwise desirable in order to fully consummate the transactions contemplated hereby, including without limitation the purchase and sale of the Acquired Assets and assumption of the Assumed Liabilities (as defined in Section 1.1(d)), the

Parties have entered into this Agreement as the master and primary agreement governing the terms and conditions of the transactions contemplated hereby.

     NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement and other good and valuable consideration, the receipt of which is hereby acknowledged, the Parties agree as follows:

ARTICLE I

STOCK AND ASSET PURCHASE

     1.1 Sale and Transfer of Stock and Assets; Assumption of Liabilities .

          (a) Sale and Transfer of Stock . On the terms and subject to the conditions of this Agreement, on the Closing Date (as defined in Section 1.3(a)), PKI shall cause PKI Singapore Parent and PKI Singapore to sell, convey, assign, transfer and deliver to Buyer (or its designee), and Buyer (or its designee) shall purchase and acquire from PKI Singapore Parent and PKI Singapore, the Stock.

          (b) Sale and Transfer of Assets . On the terms and subject to the conditions of this Agreement, on the Closing Date, PKI shall, and shall cause PKI France and PKI Singapore to, sell, convey, assign, transfer and deliver to Buyer (or its designee), and Buyer (or its designee) shall purchase and acquire from each Asset Seller, all of such Asset Seller’s right, title and interest in all assets, rights, properties, claims, contracts and business of such Asset Seller as of the Closing Date, in each case to the extent used primarily by such Asset Seller in the conduct of the Business (such assets, rights, properties, claims, contracts and business of each Asset Seller collectively, the “ Acquired Assets ”). The Acquired Assets include, without limitation, the following assets, rights, properties, claims, contracts and business of each Asset Seller, in each

case to the extent used primarily by such Asset Seller in the conduct of the Business, but the Acquired Assets specifically exclude the Excluded Assets as described in Section 1.1(c):

               (i) The real property described on Schedule 1.1(b)(i) attached hereto (the “ Owned Real Property ”);

               (ii) The leasehold interests in real property described on Schedule 1.1(b)(ii) attached hereto (the “ Leased Facilities ”);

               (iii) All equipment, furniture, furnishings, fixtures, machinery, vehicles, tools and other tangible personal property (collectively, the “ Equipment ”) and all warranties and guarantees, if any, express or implied, existing for the benefit of such Asset Seller in connection with the Equipment to the extent transferable;

               (iv) All inventory of raw materials, work in process, finished goods, office supplies, maintenance supplies and packaging materials, together with spare parts, supplies, promotional materials and inventory (collectively, the “ Inventory ”);

               (v) All management information systems, including hardware and software, to the extent that such systems and software are transferable, and all customer lists, vendor lists, catalogs, research material, technical information, trade secrets, technology, know-how, specifications, designs, drawings and processes and quality control data, if any (collectively, the “ Systems and Information ”); provided , however , that Buyer and PKI shall each pay one half (1/2) of all payments to third parties required to effect the transfer of such Systems and Information (except that PKI shall cooperate with Buyer with respect to, but the Buyer shall pay all amounts payable to, Microsoft Corporation in connection with any consents or additional licenses required from Microsoft Corporation);

               (vi) All contracts, maintenance and service agreements, joint venture agreements, purchase commitments for materials and other services, advertising and promotional agreements, real and personal property leases, collective bargaining agreements (to the extent assignable and subject to the limitations set forth in Section 10.6(b)) and other agreements (including any agreements of such Asset Seller with customers, suppliers, sales representatives, agents, personal property lessors, personal property lessees, licensors, licensees, consignors and consignees specified therein), except for those contracts, agreements (including collective bargaining agreements), commitments or leases set forth on Schedule 1.1(b)(vi) attached hereto (collectively, the “ Contracts ”);

               (vii) The patents, patent registrations and patent applications set forth on Schedule 1.1(b)(vii) , and all trademarks, trademark registrations and trademark applications, trade names (together with the goodwill associated therewith), copyrights, copyright applications and copyright registrations, including all rights to sue for past infringement (collectively, “ Intellectual Property ”, and together with the Systems and Information, the “ Intangible Assets ”);

               (viii) All licenses, permits or franchises issued by any federal, state, municipal or foreign authority relating to the development, use, maintenance or occupation of the Owned Real Property, the Leased Facilities or the operations of the Business, to the extent that such licenses, permits or franchises are transferable;

               (ix) All accounts receivable and other receivables in existence at the Closing Date (whether or not billed) (collectively, the “ Accounts Receivable ”);

               (x) All goods and services and all other economic benefits to be received subsequent to the Closing Date arising out of prepayments and payments by the Asset Seller prior to the Closing Date (collectively, the “ Prepaid Assets ”);

               (xi) All books (other than stock record books), records, accounts, ledgers, files, documents, correspondence, employment records, studies, reports and other printed or written materials, including, without limitation, historical financial and manufacturing information; and

               (xii) All goodwill (the “ Goodwill ”).

          (c) Excluded Assets . It is expressly understood and agreed that, notwithstanding anything to the contrary set forth herein, the Acquired Assets shall not include each Asset Seller’s right, title or interest in or to any of the following (each, an “ Excluded Asset ”):

               (i) Any assets (including all rights, properties, claims, contracts, business, real property, leasehold interests in real property, equipment, machinery, vehicles, tools and other tangible personal property) other than those primarily used by such Asset Seller in the conduct of the Business;

               (ii) The capital stock of all subsidiaries of the Asset Sellers (other than the Stock);

               (iii) All cash and cash equivalents or similar type investments, bank accounts, certificates of deposit, Treasury bills and other marketable securities;

               (iv) The contracts and agreements listed on Schedule 1.1(b)(vi) attached hereto;

               (v) All insurance policies and all rights of such Asset Seller to insurance claims, related refunds and proceeds thereunder;

               (vi) The rights which accrue or will accrue under this Agreement;

               (vii) All refunds of Taxes (as defined in Section 2.9(a)) relating to all periods ending on or prior to the Closing Date;

               (viii) All actions, claims, causes of action, rights of recovery, choses in action and rights of setoff of any kind arising before, on or after the Closing Date relating to the items set forth above in this Section 1.1(c) or to any Excluded Liabilities; and

               (ix) All assets of any US or Foreign Business Benefits Plans relating to the Business.

          (d) Assumed Liabilities . On the Closing Date, Buyer shall deliver to each Asset Seller an undertaking (the “ Assumption Agreement ”), in the form attached hereto as Exhibit A , pursuant to which Buyer, on and as of the Closing Date, shall assume and agree to pay, perform and discharge when due all liabilities and obligations (other than Excluded Liabilities) of each Asset Seller, of every kind, nature, character and description, whether known or unknown, primary or secondary, direct or indirect, absolute or contingent, due or to become due, in each case to the extent primarily arising out of or relating primarily to the Acquired Assets or the conduct of the Business before, on or after the Closing Date, including (without intending to expand or reduce the scope of the foregoing provisions) the following obligations and liabilities, in each case to the extent primarily arising out of or relating primarily to the Business or the Acquired Assets (collectively, the “ Assumed Liabilities ”):

               (i) All obligations and liabilities (A) reflected on the Most Recent Balance Sheet (as defined in Section 2.6) or (B) otherwise arising out of or relating to the Business or the Acquired Assets as of the date of the Most Recent Balance Sheet and which are not required to be reflected thereon according to United States generally accepted accounting

principles (“ U.S. GAAP ”), except to the extent that such obligations and liabilities are satisfied prior to the Closing;

               (ii) All obligations and liabilities incurred subsequent to the Balance Sheet Date (as defined in Section 2.6) and on or prior to the Closing Date, except to the extent that such obligations and liabilities are satisfied prior to the Closing;

               (iii) All obligations and liabilities arising or incurred by Buyer on or after the Closing Date;

               (iv) All obligations and liabilities which arise out of Buyer’s operation of the Business, the use of the Acquired Assets and/or sale of any products manufactured and/or sold by Buyer or any of its Affiliates (as defined in Section 2.12(d)) on or after the Closing Date;

               (v) All obligations and liabilities under or arising out of the contracts, agreements, commitments and leases transferred pursuant to Section 1.1(b)(vi);

               (vi) All obligations and liabilities under the licenses, permits and franchises transferred pursuant to Section 1.1(b)(viii);

               (vii) All obligations and liabilities arising out of the ownership or operation of any Owned Real Property, whether incurred prior to, on or following the Closing Date, except for Taxes which shall be allocated in accordance with Section 9.2(b);

               (viii) All obligations and liabilities arising out of the ownership, leasing or operation of any Leased Facility, whether incurred prior to, on or following the Closing Date;

               (ix) All obligations and liabilities in respect of Transferred Employees assumed by, or which are otherwise the responsibility of, Buyer pursuant to Section 10.6;

               (x) All obligations and liabilities for any Taxes and expenses assumed by, or which are otherwise the responsibility of, Buyer pursuant to Article IX;

               (xi) All obligations and liabilities arising out of or relating to Deferred Items (as defined in Section 1.5) under Section 1.5 except for PKI’s obligation to pay one-half of any payments made to a third party to obtain a Deferred Consent;

               (xii) All obligations and liabilities constituting Environmental Matters (as defined in Section 2.17(a)(vi)) assumed by Buyer, or which are otherwise the responsibility of Buyer, pursuant to Article VIII;

               (xiii) All obligations and liabilities with respect to all actions, suits, proceedings, disputes, claims or investigations arising out of or relating to the Acquired Assets or the conduct and operation of the Business prior to, on or after the Closing Date, regardless of whether any such action, suit, proceeding, dispute, claim or investigation was commenced prior to, on or after the Closing Date;

               (xiv) All obligations and liabilities arising out of or relating to the repair, rework, replacement or return of, or any claim for breach of warranty in respect of or refund of the purchase price of, products or goods of the Business manufactured or sold prior to, on or after the Closing Date, regardless of whether any such claim was brought prior to, on or after the Closing Date;

               (xv) The first $2,000,000 of obligations and liabilities arising out of or relating to any retention agreements, including without limitation those listed on Schedule 1.1(b)(vi) (the “Retention Agreements”) (it being understood, however, that all liabilities and obligations in excess of $2,000,000 in the aggregate under such retention agreements shall constitute Excluded Liabilities);

               (xvi) All obligations and liabilities arising out of or relating to any product liability claim (including any such claim arising out of or relating to injury to or death of

persons), damage to or destruction of property or any worker’s compensation claim, in each case relating to products or goods of the Business manufactured or sold prior to, on or after the Closing Date, regardless of whether any such claim was brought prior to, on or after the Closing Date;

               (xvii) All obligations and liabilities relating to the termination of employment of any Business Employee or the offer (or failure to offer) employment to any Business Employee; and

               (xviii) One-half of the first $3,000,000 of obligations and liabilities arising out of or relating to the carbon seal product warranty issue described on Schedule 1.1(e)(ix) (it being understood that all such obligations and liabilities in excess thereof are Excluded Liabilities).

          (e) Excluded Liabilities . It is expressly understood and agreed that, notwithstanding anything to the contrary in this Agreement, Assumed Liabilities shall not include the following (collectively, the “ Excluded Liabilities ”):

               (i) All obligations and liabilities arising out of or relating to the Excluded Assets, which include any properties formerly owned, occupied or operated by the Business;

               (ii) All obligations and liabilities assumed by, or which are otherwise the responsibility of, any Asset Seller pursuant to this Agreement in accordance with Articles VIII and IX;

               (iii) All liabilities and obligations of any Asset Seller for costs and expenses incurred in connection with this Agreement or the consummation of the transactions

contemplated by this Agreement (it being understood, however, that the first $2,000,000 of liabilities and obligations under the Retention Agreements shall constitute Assumed Liabilities);

               (iv) All liabilities for indebtedness for borrowed money of Sellers to third parties or to Sellers or any of their subsidiaries or Affiliates, or any guarantees or obligations to reimburse a bank or any other person under any letter of credit or similar obligations;

               (v) All obligations and liabilities arising in connection with any disposition prior to the Closing Date by Sellers, or any of their affiliates, of stock or assets (whether by stock or asset sale, merger or other transaction) formerly comprising a product line, segment, portion or division of the Business (by way of merger, consolidation, sale or otherwise);

               (vi) All obligations and liabilities related to all US and Foreign Business Benefit Plans that are the responsibility of Sellers pursuant to Section 10.6;

               (vii) All fines, penalties or other assessments by a Governmental Entity for violations of Environmental Laws (as defined in Section 2.17), and all Off Site Liabilities (as defined in Section 2.17), in each case, to the extent related to ownership or operation of the Business prior to the Closing Date;

               (viii) All liabilities related to any asbestos or any asbestos-containing materials (A) to the extent such liabilities arise within any Business Property (as defined in Section 2.17(a)(viii)) on or prior to the Closing Date; or (B) arising in connection with exposure to such materials contained in any products of the Business that were manufactured, distributed, marketed, processed or sold prior to the Closing Date;

               (ix) Taxes, except as specifically provided for in Article IX; and

               (x) One-half of the first $3,000,000 of obligations and liabilities arising out of or relating to the carbon seal product warranty issue described on Schedule 1.1(e)(ix) and all of such obligations and liabilities in excess thereof.

     1.2 Purchase Price and Related Matters .

          (a) Purchase Price . Regardless of whether the transfer of any Acquired Asset has been deferred pursuant to the provisions of Section 1.5, in consideration for the sale and transfer of the Stock and the Acquired Assets, and subject to the terms and conditions of this Agreement, Buyer shall on the Closing Date assume the Assumed Liabilities as provided in Section 1.1(d) hereof and shall pay to Sellers in cash, by wire transfer of immediately available funds, (i) U.S. $333,000,000, less (ii) the amount of any capitalized lease obligations included on the balance sheet of the Business as of the Closing Date and less the amount by which $1,300,000 exceeds the payments made by PKI pursuant to Section 4.1 hereof, plus (iii) the amount, if any, of any payment of the participation fee made by any Seller to General Electric under the General Electric RSP Agreement for the CF6 engine program and the GE RSP Agreement for the CFM56 engine program, each dated June 30, 2005 (the “ Purchase Price ”).

          (b) Allocation . (i) The Purchase Price shall be allocated among the Sellers as set forth on Schedule 1.2 attached hereto. As soon as practicable following the determination of the Adjusted Purchase Price (as defined in Section 1.4(i)), PKI shall prepare and deliver to Buyer an allocation schedule (the “ Allocation Schedule ”) allocating the Adjusted Purchase Price and the Assumed Liabilities (to the extent treated as liabilities for United States federal income tax purposes) among the Sellers and among the Acquired Assets, the Stock and the covenant contained in Section 10.3 hereof, and which shall be identical to Schedule 1.2 except that it will take into account the following adjustments:

                    (A) If the Adjusted Purchase Price exceeds the Purchase Price, the amount of such excess shall increase the amount allocated to the Tax jurisdiction(s) to which the increase in Working Capital that gave rise to such excess relates as determined in good faith by PKI;

                    (B) If the Purchase Price exceeds the Adjusted Purchase Price, the amount of such excess shall decrease the amount allocated to the Tax jurisdiction(s) to which the decrease in Working Capital that gave rise to such excess relates as determined in good faith by PKI; and

                    (C) The amount of Assumed Liabilities (to the extent treated as liabilities for United States federal income tax purposes) shall increase the amount allocated to the Tax jurisdiction(s) to which such Assumed Liabilities relate as determined in good faith by PKI.

               (ii) As soon as practicable following the delivery of the Allocation Schedule to the Buyer, Buyer shall review such proposed Allocation Schedule and shall notify PKI of any proposed revisions thereto. Buyer and PKI shall negotiate in good faith in an attempt to reach agreement as to the proposed allocations. If Buyer and PKI fail to agree on a final version of the Allocation Schedule within 60 days of the date that the proposed Allocation Schedule was first delivered to Buyer, the items in dispute shall be referred to the Neutral Accountant for resolution in accordance with the procedures set forth in Section 1.4 hereof.

               (iii) In the event that any subsequent adjustment to the Purchase Price or Adjusted Purchase Price occurs as a result of (i) any indemnity payments made pursuant to this Agreement, or (ii) for any other reason, PKI and the Buyer shall adjust the allocations under this Section 1.2(b) in such manner as they shall agree.

               (iv) The Parties agree to act in accordance with the computations and allocations contained in the Allocation Schedule as finally agreed upon or determined by the Neutral Accountant (as they may be subsequently adjusted pursuant to Section 1.2(b)(iii)) in any relevant Tax Returns (as defined in Section 2.9(a)) or filings (including any forms or reports required to be filed pursuant to Section 1060 of the Internal Revenue Code of 1986, as amended (the “ Code ”), or pursuant to any similar provisions of local, state and foreign Tax laws (the “ 1060 Forms ”) unless otherwise required by law or pursuant to a determination as defined in Section 1313(a) of the Code or any similar provision of local, state or foreign law. They further agree to prepare all other forms, financial statements, reports and similar items in a manner that is consistent with the allocations to Tax jurisdictions contained in the Allocation Schedule, to cooperate in the preparation of any 1060 Forms and to file such 1060 Forms in the manner required by law. In the event that any Section 1060 Form is required to be filed with any Taxing authority prior to final resolution of the Allocation Schedules, the Parties shall file all such 1060 Forms in a manner that is consistent with Schedule 1.2.

     1.3 The Closing.

          (a) Time and Location . The closing of the transactions contemplated by this Agreement (the “ Closing ”) shall take place at the offices of Wilmer Cutler Pickering Hale and Dorr LLP in Boston, Massachusetts, commencing at 10:00 a.m., local time, on October 31, 2005, or, if all of the conditions to the obligations of the Parties to consummate the transactions contemplated hereby (excluding the delivery of any documents to be delivered at the Closing by any of the Parties and other than satisfaction of those conditions that by their terms are to be satisfied or waived at Closing, it being understood that the occurrence of the Closing shall remain subject to the delivery of such documents and the satisfaction or waiver of such

conditions) have not been satisfied or waived by such date, on such mutually agreeable later date as soon as practicable (but in no event more than three Business Days (as defined below)) after the first date on which the conditions to the obligations of the Parties to consummate the transactions contemplated hereby (excluding the delivery of any documents to be delivered at the Closing by any of the Parties and other than satisfaction of those conditions that by their terms are to be satisfied or waiver at Closing, it being understood that the occurrence of the Closing shall remain subject to the delivery of such documents and the satisfaction or waiver of such conditions) have been satisfied or waived (the “ Closing Date ”). For purposes of this Agreement, a “ Business Day ” shall be any day other than (i) a Saturday or Sunday or (ii) a day on which banking institutions located in New York, New York are permitted or required by law, executive order or governmental decree to remain closed.

          (b) Actions at the Closing .

               At the Closing:

               (i) PKI shall deliver (or cause to be delivered) to Buyer the various certificates, instruments and documents required to be delivered under Section 5.1;

               (ii) Buyer shall deliver (or cause to be delivered) to Sellers the various certificates, instruments and documents required to be delivered under Section 5.2;

               (iii) PKI shall deliver (or cause to be delivered) to Buyer certificate(s) evidencing all of the Stock, duly endorsed in blank, or with stock powers or other instruments of transfer reasonably acceptable to Buyer duly executed by PKI Singapore Parent and PKI Singapore;

               (iv) PKI shall, and shall cause PKI France to, deliver to Buyer an executed Bill of Sale in substantially the form attached hereto as Exhibit B ;

               (v) PKI shall cause PKI France to deliver to Buyer, and Buyer shall deliver to PKI France, an executed Sale of an On Going Concern Agreement in substantially the form attached hereto as Exhibit C , which Sale of an On Going Concern Agreement shall, among other things, evidence (A) the sale, conveyance, assignment, transfer and delivery by PKI France to Buyer of all of PKI France’s right, title and interest in the Acquired Assets and (B) the assumption and agreement by Buyer to pay, perform and discharge when due all of the Assumed Liabilities of PKI France (the “ French Agreement ”). For the avoidance of doubt, the Parties hereby agree that the French Agreement shall not expand or reduce the rights and obligations and liabilities of the Parties under this Agreement, and, if there is any conflict between this Agreement and the French Agreement, this Agreement shall control;

               (vi) PKI shall deliver to Buyer an executed Patent Assignment in substantially the form attached hereto as Exhibit D ;

               (vii) PKI shall deliver to Buyer an executed Trademark Assignment in substantially the form attached hereto as Exhibit E ;

               (viii) PKI shall deliver to Buyer an executed Copyright Assignment in substantially the form attached hereto as Exhibit F ;

               (ix) PKI shall deliver (or cause to be delivered) such other instruments of conveyance as Buyer may reasonably request in order to effect the sale, transfer, conveyance and assignment to Buyer of valid ownership of the Acquired Assets owned by the Asset Sellers;

               (x) PKI shall transfer (or cause to be transferred) all the books, records, files and other data (or copies thereof) (other than stock record books) within the possession of the Asset Sellers relating primarily to the Acquired Assets and reasonably necessary for the continued operation of the Business by Buyer;

               (xi) PKI shall deliver or make available (or shall cause to be delivered or made available) to Buyer the minute books, stock books, ledgers and registers, corporate seals and other similar corporate records of PKI Indonesia;

               (xii) Buyer shall deliver to each Asset Seller an executed Assumption Agreement and such other instruments as PKI may reasonably request in order to effect the assumption by Buyer of the Assumed Liabilities;

               (xiii) Buyer shall deliver to each applicable Asset Seller an executed Lease Assignment and Assumption Agreement in substantially the form attached hereto as Exhibit G (or such other form as may be reasonably requested by the applicable Asset Seller or landlord) (collectively, the “ Lease Assignment and Assumption Agreements ”) in connection with those Leases (as defined in Section 2.11(b)) as are designated by the Asset Sellers;

               (xiv) Buyer shall pay to Sellers the Purchase Price in cash by wire transfer of immediately available funds to one or more accounts designated by PKI;

               (xv) PKI shall cause PKI France to deliver to Buyer an executed Deed in substantially the form attached hereto as Exhibit H in connection with the sale and transfer by PKI France to Buyer of the Owned Real Property (as defined in Section 2.11(a)) located at 2 Rue Lavoisier, Coignieres, France (the “ French Real Property Deed ”);

               (xvi) PKI shall deliver (or cause to be delivered) to Buyer, or otherwise put Buyer (or cause Buyer to be put) in possession and control of, all of the Acquired Assets of a tangible nature owned by the Asset Sellers;

               (xvii) The Parties shall execute and deliver to each other a cross-receipt evidencing the transactions referred to above; and

               (xviii) The Parties shall execute and deliver the Transition Services Agreement in substantially the form attached hereto as Exhibit I .

     1.4 Post-Closing Adjustment . The Purchase Price shall be subject to adjustment after the Closing Date as follows:

          (a) Within 45 days after the Closing Date, PKI shall prepare and deliver to Buyer a statement (the “ Closing Working Capital Statement ”) calculating the Working Capital (as defined in this Section 1.4(a)) of the Business as of the Closing Date (the “ Closing Working Capital Amount ”). PKI shall conduct full physical inventories as of the Closing Date within 30 calendar days prior to or following the Closing Date, and the results of such inventories, after appropriately adjusting for intervening activity between the date of such physical inventories and the Closing Date, shall be used in preparing the Closing Working Capital Statement. Representatives of PKI and Buyer will be permitted to observe the physical inventories. For purposes of this Agreement, “ Working Capital ” shall mean the current assets of the Business as of the Closing Date (including accounts receivable (net of allowance for doubtful accounts), inventory (net of reserve for excess and obsolete inventory but excluding the LIFO reserve and the related LIFO excess and obsolete reserve adjustment) and other current assets, excluding prepaid Taxes and deferred Tax assets, investments and cash and cash equivalents, which cash and cash equivalents shall be distributed to, or retained by, Sellers prior to the Closing), less the current liabilities of the Business as of the Closing Date (including accounts payable, accrued expenses, but excluding Tax liabilities, deferred Taxes, restructuring liabilities, capital lease obligations, accrued management incentives, employee labor costs for employees of the business who are not Transferred Employees, accrued Pension costs for employees of the Business who work primarily at the Warwick, Rhode Island facility and accrued revenue sharing agreement

liabilities), and shall be calculated in accordance with U.S. GAAP on a basis consistent with PKI’s accounting methods, treatments, principles and procedures used in the preparation of the Financial Statements referred to in Section 2.6 of this Agreement. For the avoidance of doubt, Working Capital shall exclude all Excluded Assets and Excluded Liabilities.

          (b) If Buyer in good faith disputes the Closing Working Capital Amount as shown on the Closing Working Capital Statement prepared by PKI, Buyer shall deliver to PKI within 60 days after receipt of the Closing Working Capital Statement a statement (the “ Dispute Notice ”) setting forth Buyer’s calculation of the correct Closing Working Capital Amount and describing in reasonable detail the basis for the determination of such different Closing Working Capital Amount. The Parties shall use reasonable efforts to resolve such differences regarding the determination of the Closing Working Capital Amount for a period of 30 days after Buyer has given the Dispute Notice. If the Parties resolve such differences, the Closing Working Capital Amount agreed to by the Parties shall be deemed to be the “ Final Closing Working Capital Amount ” and the Closing Working Capital Statement agreed to by the Parties shall be deemed to be the “ Final Closing Working Capital Statement .”

          (c) If the Parties do not reach a final resolution on the Closing Working Capital Amount within 30 days after Buyer has given the Dispute Notice, unless the Parties mutually agree to continue their efforts to resolve such differences, KPMG LLP (the “ Neutral Accountant ”) shall resolve such differences, pursuant to an engagement agreement executed by the Parties and the Neutral Accountant, in the manner provided below. The Parties shall each be entitled to make a presentation to the Neutral Accountant, pursuant to procedures to be agreed to among PKI, Buyer and the Neutral Accountant (or, if they cannot agree on such procedures, pursuant to procedures determined by the Neutral Accountant), regarding such Party’s

calculation of the Closing Working Capital Amount; and the Neutral Accountant shall be required to resolve the differences between the Parties and determine the Closing Working Capital Amount within twenty (20) Business Days after such presentations have been made. The Closing Working Capital Amount determined by the Neutral Accountant shall be deemed to be the Final Closing Working Capital Amount and the Closing Working Capital Statement, as adjusted to reflect such determination, shall be deemed to be the Final Closing Working Capital Statement. Such determination by the Neutral Accountant shall be conclusive and binding upon the Parties, absent fraud or manifest error.

          (d) The Neutral Accountant shall not be authorized or permitted to:

               (i) determine any questions or matters whatsoever under or in connection with this Agreement except for the resolution of differences between the Parties regarding the determination of the Closing Working Capital Amount in accordance with this Section 1.4;

               (ii) resolve any such differences by making an adjustment to the Closing Working Capital Statement that is outside of the range defined by amounts as finally proposed by the Parties; or

               (iii) apply any accounting methods, treatments, principles or procedures other than as described in Section 1.4(a).

          (e) PKI, on the one hand, and Buyer, on the other hand, shall each pay one half of the fees and expenses of the Neutral Accountant; provided that if the Neutral Accountant determines that one Party has adopted a position or positions with respect to the Closing Working Capital Statement that is frivolous or clearly without merit, the Neutral Accountant (i) may, in its discretion, assign a greater portion of any such fees and expenses to such Party and

(ii) shall provide to the Parties a written explanation of its reasons for making such a determination.

          (f) The Parties agree that the procedure set forth in this Section 1.4 for resolving disputes with respect to the Closing Working Capital Amount shall be the sole and exclusive method for resolving any such disputes, provided that this provision shall not prohibit any Party from instituting litigation to enforce the ruling of the Neutral Accountant.

          (g) Failure of Buyer to deliver a Dispute Notice within 60 days after receiving the Closing Working Capital Statement shall constitute acceptance of the Closing Working Capital Amount set forth on the Closing Working Capital Statement, whereupon such Closing Working Capital Amount shall be deemed to be the Final Closing Working Capital Amount and the Closing Working Capital Statement shall be deemed to be the Final Closing Working Capital Statement. Delivery by Buyer of a Dispute Notice shall constitute final and binding acceptance by Buyer of all portions of the Closing Working Capital Statement other than those specifically identified in the Dispute Notice as being subject to a good faith dispute.

          (h) If the Final Closing Working Capital Amount is less than $22,900,000, as adjusted to exclude all Tax assets and liabilities of Sellers and PKI Indonesia as of the Balance Sheet Date, including without limitation accrued payroll taxes, accrued real estate taxes, accrued personal property taxes, accrued sales and use taxes, accrued employment taxes and accrued value-added taxes (the “ Target Working Capital Amount ”), then PKI shall pay to Buyer an amount equal to the difference between the Target Working Capital Amount and the Final Closing Working Capital Amount. If the Final Closing Working Capital Amount is more than the Target Working Capital Amount, then Buyer shall pay to Sellers an amount equal to the difference between the Final Closing Working Capital Amount and the Target Working Capital

Amount. Any payment pursuant to this Section 1.4(h) shall be made in cash by wire transfer of immediately available funds into an account or accounts designated by the Buyer or Sellers, as the case may be, within five Business Days after the date on which the Final Closing Working Capital Amount is determined pursuant to this Section 1.4.

          (i) For purposes of this Agreement, “ Adjusted Purchase Price ” means the Purchase Price plus, if applicable, the amount of the payment required to be made by Buyer to PKI pursuant to the second sentence of Section 1.4(h) or minus, if applicable, the amount of the payment required to be made by PKI to Buyer pursuant to the first sentence of Section 1.4(h).

     1.5 Consents to Assignment . Anything in this Agreement to the contrary notwithstanding, this Agreement shall not constitute an agreement to assign or transfer any asset, agreement, lease, authorization, license or permit, or any claim, right or benefit arising thereunder or resulting therefrom, if an attempted assignment or transfer thereof, without the consent of a third party thereto or of the issuing Governmental Entity (as defined in Section 2.4(b)), as the case may be, would constitute a breach or default thereof, would result in a violation of the rights of any such third party, would be ineffective, or would in any way adversely affect the rights of PKI or Buyer thereunder. If such consent (a “ Deferred Consent ”) is not obtained, then (a) the asset, agreement, lease, authorization, license or permit to which such Deferred Consent relates (a “ Deferred Item ”) shall be withheld from sale pursuant to this Agreement without any reduction in the Purchase Price, (b) from and after the Closing, the Sellers and Buyer will cooperate, in all reasonable respects, to obtain such Deferred Consent as soon as practicable after the Closing, provided that (i) no Party shall be required to make any material payments or agree to any material undertakings in connection therewith and (ii) if the Parties agree to make any payments (whether or not material) to a third party to obtain a

Deferred Consent, all such payments that are made shall be paid one half (1/2) by the Buyer and one half (1/2) by PKI, and (c) until such Deferred Consent is obtained, the Sellers and the Buyer shall cooperate, in all reasonable respects, in any lawful and commercially reasonable arrangement reasonably proposed by the Buyer under which (i) the Buyer would obtain (without infringing upon the legal rights of any third party) the economic claims, rights and benefits (net of the amount of any related Tax costs and any other liabilities or obligations imposed on the Sellers or any of their Affiliates under the Deferred Item) and (ii) the Buyer would assume any related economic burden (including the amount of any related Tax costs and any other liabilities or obligations imposed on the Sellers or any of their Affiliates) with respect to the Deferred Item.

     1.6 Further Assurances . At any time and from time to time after the Closing Date, as and when reasonably requested by any Party hereto and at such Party’s expense (it being understood that such Party shall be required to reimburse only out-of-pocket expenses paid to third parties, and not internal costs), the other Party shall promptly execute and deliver, or cause to be executed and delivered, all such documents, instruments and certificates and shall take, or cause to be taken, all such further or other actions as are necessary to evidence and effectuate the transactions contemplated by this Agreement.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF PKI

     PKI represents and warrants to Buyer that, except as set forth in the disclosure schedule provided by PKI to Buyer (the “ Disclosure Schedule ”):

     2.1 Organization, Qualification and Corporate Power .

          (a) Sellers . Each of the Sellers is a corporation duly organized, validly existing and, where applicable, in good standing under the laws of its respective jurisdiction of

organization and is duly qualified to conduct business under the laws of each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its activities, in each case as they relate exclusively to the Business, makes such qualification necessary, except for any such failures to be qualified that would not reasonably be expected to result in a Business Material Adverse Effect (as defined below). Each of the Sellers has all requisite corporate power and authority to carry on the business in which it is now engaged and to own and use the properties now owned and used by it. For purposes of this Agreement, “ Business Material Adverse Effect ” means any change, effect or circumstance that (i) is materially adverse to the business, financial condition or results of operations of the Business or (ii) materially impairs the ability of the Sellers to consummate the transactions contemplated by this Agreement; provided , however , that a “Business Material Adverse Effect” shall not include any adverse change, effect or circumstance resulting from or arising out of (I) the actions contemplated by the Parties in connection with this Agreement, (II) the announcement or performance of this Agreement or the transactions contemplated by this Agreement, (III) changes, effects or circumstances resulting from conditions in the Business’s industry or in markets generally, except to the extent the effect of such conditions on the Business and PKI Indonesia is materially disproportionate to the effect of such conditions on other participants in industries in which the Business and PKI Indonesia are engaged, (IV) changes in national or international general economic conditions or (V) national or international political conditions or instability, including the engagement by the United States in hostilities, whether or not pursuant to a declaration of emergency or war, or the occurrence of any military or terrorist attack upon the United States or any other nation.

          (b) PKI Indonesia . PKI Indonesia is a corporation duly organized, validly existing and, if applicable, in good standing under the laws of its jurisdiction of organization and

is duly qualified to conduct business under the laws of each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its activities makes such qualification necessary, except for any such failures to be qualified that would not reasonably be expected to result in a Business Material Adverse Effect. PKI Indonesia has all requisite corporate power and authority to carry on the business in which it is now engaged and to own and use the properties now owned and used by it.

          (c) Charter and Corporate Records . PKI Indonesia has made available to Buyer correct and complete copies of its corporate charter and bylaws or other organizational documents (as amended to date). The minute books (containing the records of meetings of the stockholders and the board of directors) and the stock record books of PKI Indonesia are correct and complete in all material respects. PKI Indonesia is not in default under or in violation of any provision of its corporate charter or bylaws or other organizational documents.

     2.2 Capitalization; Title to Property .

          (a) The capitalization of PKI Indonesia is set forth in Section 2.2 of the Disclosure Schedule. All of the issued and outstanding shares of Stock of PKI Indonesia are duly authorized, validly issued, fully paid and nonassessable. Except for the Stock, there are no shares of capital stock or other equity securities of PKI Indonesia outstanding. There are no outstanding or authorized options, warrants, rights, agreements or commitments to which PKI Indonesia is a party or which are binding upon PKI Indonesia providing for the issuance, disposition or acquisition of any shares of capital stock of PKI Indonesia. There are no outstanding or authorized stock appreciation, phantom stock or similar rights (i) providing for the issuance, disposition or acquisition of any shares of capital stock of PKI Indonesia or (ii) that give any person the right to receive any benefits or rights similar to any rights enjoyed by or

accruing to the holders of shares of capital stock of PKI Indonesia. There are no agreements, voting trusts or proxies with respect to the voting, or registration under the Securities Act of 1933, as amended (the “ Securities Act ”), of the Stock.

          (b) All of the issued and outstanding shares of Stock are owned of record and beneficially by PKI Singapore Parent and PKI Singapore, and PKI Singapore Parent and PKI Singapore have good title to the Stock, free and clear of any Security Interest (as defined in Section 2.2(d)), contractual restriction or covenant, option or other adverse claim (whether arising by contract or by operation of law), other than applicable securities law restrictions.

          (c) Each Asset Seller has good title to, or a valid leasehold interest in, the material property included in the Acquired Assets of such Asset Seller, free and clear of any Security Interests. Upon consummation of the Closing, Buyer (or its designees) will have good title to, or a valid leaseholder interest in, the Acquired Assets and the Stock, free and clear of any Security Interests (other than any Securities Interests created by or as a result of the identity of Buyer (or its designees)).

          (d) For purposes of this Agreement, “ Security Interest ” means any mortgage, pledge, security interest, encumbrance, charge or other lien (whether arising by contract or by operation of law), other than (i) mechanic’s, materialmen’s, landlord’s and similar liens, (ii) liens arising under worker’s compensation, unemployment insurance, social security, retirement and similar legislation, (iii) liens on goods in transit incurred pursuant to documentary letters of credit, in each case arising in the ordinary course of business, (iv) liens for Taxes not yet due and payable, (v) liens for Taxes which are being contested in good faith and by appropriate proceedings, to the extent such Taxes are accrued for on the Most Recent Balance Sheet or were incurred after the date of the Most Recent Balance Sheet in the ordinary course of business, (vi)

liens relating to capitalized lease financings or purchase money financings that have been entered into in the ordinary course of business and (vii) liens arising solely by action of Buyer.

     2.3 Authority . PKI has all requisite corporate power and authority to execute and deliver this Agreement and each Seller has all requisite corporate power and authority to perform its obligations hereunder. The execution and delivery of this Agreement by PKI, the performance by each Seller of its obligations hereunder and the consummation by each Seller of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of each such Seller. This Agreement has been duly and validly executed and delivered by PKI and, assuming this Agreement constitutes the valid and binding agreement of Buyer, constitutes a valid and binding obligation of PKI, enforceable against PKI in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws relating to or affecting the rights of creditors generally and by equitable principles, including those limiting the availability of specific performance, injunctive relief and other equitable remedies and those providing for equitable defenses.

     2.4 Noncontravention . Subject to compliance with the applicable requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ Hart-Scott-Rodino Act ”), applicable Environmental Laws (as defined in Section 2.17(a)(v)), and applicable foreign antitrust or trade regulation laws, neither the execution and delivery of this Agreement by PKI, nor the consummation by any Seller of the transactions contemplated hereby, will:

          (a) conflict with or violate any provision of the charter or bylaws or other organizational documents of PKI Indonesia or any Seller;

          (b) require on the part of PKI Indonesia or any Seller any material filing with, or any material permit, authorization, consent or approval of, any court, arbitrational tribunal, administrative agency or commission or other governmental or regulatory authority or agency (a “ Governmental Entity ”);

          (c) materially conflict with, result in a material breach of, constitute (with or without due notice or lapse of time or both) a material default under, result in the acceleration of, create in any party the right to accelerate, terminate, materially modify or cancel, or require any material notice, consent or waiver under, any material contract (including, without limitation, any Designated Contract), lease, sublease, license, sublicense, franchise, permit, indenture, agreement or mortgage for borrowed money, instrument of indebtedness or Security Interest to which PKI Indonesia or any Seller is a party or by which PKI Indonesia or any Seller is bound or to which any of their respective assets is subject; or

          (d) violate any material order, writ, injunction or decree specifically naming, or material statute, rule or regulation applicable to, PKI Indonesia or any Seller or any of or their respective properties or assets.

     2.5 Subsidiaries . None of PKI Singapore or, with respect to the Business, the Asset Sellers controls, directly or indirectly, or has any direct or indirect equity participation in, any corporation, limited liability company, partnership, trust or other business association (other than in a money market, mutual fund or other short-term investment and, in the case of (a) PKI, in PKI France, PKI Singapore and PKI Indonesia and (b) PKI Singapore, in PKI Indonesia).

     2.6 Financial Statements . PKI has provided to Buyer copies of the consolidated balance sheets as of the last day of each of the three fiscal years in the period ended January 2, 2005 and as of July 3 and August 28, 2005, and consolidated statements of operations and cash

flows of the Business for each of the two fiscal years in the period ended January 2, 2005 and for the six and eight-month periods ended July 3 and August 28, 2005, respectively (collectively, the “ Financial Statements ”). The consolidated balance sheet as of August 28, 2005 is referred to herein as the “ Most Recent Balance Sheet ” and the date of such Most Recent Balance Sheet, August 28, 2005, is referred to herein as the “ Balance Sheet Date ”. Such Financial Statements have been prepared in accordance with U.S. GAAP and fairly present, in all material respects, the financial condition and consolidated results of operations and cash flows of the Business as of the respective dates thereof and for the periods referred to therein; provided , however , that (i) the Financial Statements as of, and for the six and eight-month periods ended July 3 and August 28, 2005, respectively, are subject to year-end adjustments and (ii) all of the Financial Statements do not include footnotes and do not include allocations of corporate expenses that are made on a periodic basis.

     2.7 Absence of Certain Changes . Except as contemplated by this Agreement (including those matters contemplated by Section 4.3 of this Agreement or listed on Schedule 4.3 ), since the Balance Sheet Date, there have not been any adverse changes in the financial condition or results of operations of the Business, except for any adverse changes that would not reasonably be expected to result in a Business Material Adverse Effect. Except as contemplated by this Agreement (including those matters contemplated by Section 4.3 of this Agreement or listed on Schedule 4.3 ), since the Balance Sheet Date, no Seller has taken any of the following actions:

          (a) sold, assigned or transferred any portion of the Acquired Assets or any assets of PKI Indonesia, in each case that is material to the Business, other than (i) in the

ordinary course of business or (ii) sales or other dispositions of obsolete or excess equipment or other assets not used in the Business;

          (b) waived any rights of material value to the Business;

          (c) issued, sold or transferred any Stock or other equity securities, securities convertible into Stock or other equity securities or warrants, options or other rights to acquire Stock or other equity securities of PKI Indonesia;

          (d) declared or paid any dividends or made any distributions on Stock or other equity securities of PKI Indonesia or redeemed or purchased any shares of Stock or other equity securities of PKI Indonesia, except for dividends, distributions or redemptions paid solely in cash, cash equivalents and/or other short term liquid investments;

          (e) except as required by law, granted any rights to severance benefits, “stay pay” or termination pay to any director, officer or other employee of the Business or increased benefits payable or potentially payable to any such director, officer or other employee of the Business under any previously existing severance benefits, “stay-pay” or termination pay arrangements (in each case, other than grants or increases that are substantially consistent with the past practice of the Business or grants or increases for which neither the Business nor the Buyer will be obligated following the Closing);

          (f) except in the ordinary course of business or in accordance with the Business’ capital expenditure budget attached to Section 2.7(f) of the Disclosure Schedule, made any capital expenditures or commitments therefor with respect to the Business in an amount in excess of $500,000 in the aggregate;

          (g) acquired any entity or business (whether by the acquisition of stock, the acquisition of assets, merger or otherwise), other than acquisitions that have not or will not become integrated into the Business;

          (h) except in the ordinary course of business, entered into any employment, compensation or deferred compensation agreement (or any amendment to any such existing agreement) with any officer or other employee of the Business whose annual base salary exceeds $150,000;

          (i) amended the terms of any existing US or Foreign Business Benefit Plan (each as defined in Section 2.16(a)), except (i) as required by law, (ii) in a manner substantially consistent with the past practices of the Business or (iii) in any manner that would not reasonably be expected to result in a Business Material Adverse Effect;

          (j) materially changed the accounting principles, methods or practices of the Business, except in each case to conform to changes in U.S. GAAP or applicable local generally accepted accounting principles; or

          (k) entered into any agreement or commitment with respect to any of the matters referred to in paragraphs (a) through (j) of this Section 2.7.

     2.8 Undisclosed Liabilities . To Sellers’ knowledge, neither PKI Indonesia nor the Business has any liability which is required by U.S. GAAP to be shown on a balance sheet, except for (a) liabilities shown on the Most Recent Balance Sheet, (b) liabilities which have arisen since the date of the Most Recent Balance Sheet in the ordinary course of business and (c) Excluded Liabilities.

2.9 Tax Matters .

          (a) PKI Indonesia and each Asset Seller has filed or had filed on its behalf all material Tax Returns (as defined below) that it was required to file (separately or as part of a consolidated, combined or unitary group) and all such Tax Returns were correct and complete in all material respects. PKI Indonesia and each Asset Seller has paid (or had paid on its behalf) all Taxes (as defined below) that are shown to be due on any such Tax Returns. All Taxes that PKI Indonesia and each Asset Seller is or was required by law to withhold or collect have been duly withheld or collected and, to the extent required, have been paid to the proper Governmental Entity, except for any such Taxes with respect to which the failure to withhold, collect or pay would not reasonably be expected to result in a Business Material Adverse Effect. For purposes of this Agreement, “ Taxes ” means all taxes, including income, gross receipts, ad valorem , value-added, excise, real property, personal property, sales, use, transfer, withholding, employment and franchise taxes imposed by the United States of America or any state, local or foreign government, or any agency thereof, or other political subdivision of the United States or any such government, and any interest, penalties, assessments or additions to tax resulting from, attributable to or incurred in connection with any tax or any contest or dispute thereof. For purposes of this Agreement, “ Tax Returns ” means all reports, returns, declarations, statements, forms or other information required to be supplied to a taxing authority in connection with Taxes.

          (b) No examination or audit of any Tax Return of PKI Indonesia (or of any consolidated, combined or unitary group for a period for which the activities of PKI Indonesia were included on the Tax Return of such group) by any Governmental Entity is currently in progress or, to Sellers’ knowledge, threatened or contemplated. None of PKI Indonesia or the

members of any consolidated, combined or unitary group with which PKI Indonesia has filed group Tax Returns has been notified in writing by any jurisdiction that the jurisdiction believes that PKI Indonesia was required to file any Tax Return or that the consolidated, combined or unitary group with respect to which PKI Indonesia filed Tax Returns for any period was required to file any Tax Return for such period that was not filed.

          (c) PKI Indonesia has not been a member of a group with which it has filed or been included in a combined, consolidated or unitary income Tax Return other than a group the common parent of which was PKI or a subsidiary of PKI. PKI Indonesia is not liable for the Taxes of any taxpayer as a transferee or successor, by contract, or otherwise for any Pre-Closing Period.

          (d) None of the Assumed Liabilities represents a contract under which any person will make or become obligated to make, as a result of any event connected with any transaction contemplated herein and/or any termination of employment related to such transaction, any “excess parachute payment,” as defined in Section 280G of the Code (without regard to subsection (b)(4) thereof).

          (e) To the knowledge of Robert Wylie, Vice President of Tax of PKI, after due inquiry Schedule 2.9(e) sets forth a list of all countries in which (i) any tangible asset of the Business, inventory of the Business or leased or licensed property of the Business is or has been located during the immediately preceding two calendar years and (ii) any employee of the Business had conducted any activity on behalf of the Business during such two calendar years.

          (f) PKI Indonesia (i) has not waived any statute of limitations with respect to Tax obligations or agreed to any extension of time with respect to a Tax assessment or

deficiency, (ii) has not been a party to any Tax allocation or sharing agreement, or (iii) is not currently the beneficiary of any extensions of time within which to file any Tax Return.

          (g) The earliest taxable period of PKI Indonesia for which the statute of limitations relating to the assessment or collection of income Taxes is still open is for the taxable year ending December 31, 2002. Schedule 2.9(g) lists all income Tax Returns filed with respect to PKI Indonesia for all taxable periods for which the statute of limitations is still open, and indicates those Tax Returns that have been audited and those that are currently the subject of an audit. PKI has delivered or made available to the Buyer correct and complete copies of (i) all income Tax Returns of PKI Indonesia with respect to all taxable periods for which the statute of limitations is still open, and (ii) copies of all examination reports and statements of deficiencies that have been assessed against or agreed to by PKI Indonesia for any past taxable period for which the statute of limitations is still open.

          (h) There are no joint ventures, partnerships, limited liability companies, or other arrangements or contracts to which PKI Indonesia is a party and that could be treated as a partnership for income Tax purposes by any jurisdiction.

          (i) The unpaid Taxes of PKI Indonesia (A) did not, as of the Balance Sheet Date, exceed the reserve and accruals for such Tax Liability (not including any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the Most Recent Balance Sheet that has been made available to the Buyer and (B) will not, as of the Closing Date, exceed such reserve and accruals as adjusted through the Closing Date in accordance with GAAP in the ordinary course of business.

          (j) To the knowledge of the Sellers, the transactions contemplated by this Agreement will not adversely affect the amount or availability to PKI Indonesia of any such Tax credit, Tax holiday, or other Tax benefit or attribute.

     2.10 Tangible Personal Property . PKI Indonesia or one of the Asset Sellers has good title to, a valid leasehold interest in or a valid license to use, all of the material tangible personal property reflected on the Most Recent Balance Sheet (other than property sold, consumed or otherwise disposed of in the ordinary course of business since the date of the Most Recent Balance Sheet), free and clear of all Security Interests.

     2.11 Real Property .

          (a) Owned Real Property . Section 2.11(a) of the Disclosure Schedule lists the property address of all Owned Real Property. The Owned Real Property constitutes all of the real property owned by any Seller or PKI Indonesia and used primarily in the operation of the Business. With respect to each piece of Owned Real Property:

               (i) the applicable Asset Seller has good and fee simple title to such Owned Real Property, free and clear of all material liens, easements, covenants or other restrictions;

               (ii) to Sellers’ knowledge, there are no pending or threatened condemnation proceedings relating to such Owned Real Property;

               (iii) there are no leases, subleases, licenses or agreements granting to any party or parties (other than the Asset Sellers or PKI Indonesia) the right of use or occupancy of any portion of such Owned Real Property; and

               (iv) there are no outstanding options or rights of first refusal to purchase such Owned Real Property, or any portion thereof or interest therein.

          (b) Leased Property . Section 2.11(b) of the Disclosure Schedule lists all material real property leased or subleased to PKI Indonesia or included in the Acquired Assets. PKI has made available to Buyer correct and complete copies of the leases and subleases (as amended to date) listed therein (the “ Leases ”). With respect to each such Lease:

               (i) the Lease is a legal, valid, binding and enforceable obligation of the applicable Asset Seller or PKI Indonesia (as the case may be) and, to Sellers’ knowledge, each other party to such Lease, except as enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws relating to or affecting the rights of creditors generally and by equitable principles, including those limiting the availability of specific performance, injunctive relief and other equitable remedies and those providing for equitable defenses;

               (ii) no Asset Seller or PKI Indonesia or, to Sellers’ knowledge, any other party to the Lease is in breach or default and, to Sellers’ knowledge, no event has occurred which, with notice or lapse of time or both, would constitute a breach or default or permit termination, modification or acceleration thereunder, except for any such breach or default as would not reasonably be expected to result in a Business Material Adverse Effect; and

               (iii) no Asset Seller or PKI Indonesia has assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered any interest in the leasehold or subleasehold to the Lease.

     2.12 Intellectual Property .

          (a) Section 2.12 of the Disclosure Schedule lists all patents, patent applications, trademarks and trademark applications that are material to the Business (the “ Designated Intellectual Property ”). To Sellers’ knowledge, the applicable Asset Seller or PKI

Indonesia owns, or is licensed or otherwise possesses valid rights to use, the Designated Intellectual Property.

          (b) Neither PKI Indonesia or, with respect to the Business, any Asset Seller has been named in any pending suit, action or proceeding which involves a claim of infringement of any patents and patent registrations, trademarks and trademark registrations, trade names (together with the goodwill associated therewith), copyrights and copyright registrations, trade secrets, know-how or rights in design of any third party (the “ Third Party IP Rights ”). To Sellers’ knowledge, the Business as presently conducted does not infringe any Third Party IP Rights.

          (c) The applicable Asset Seller or PKI Indonesia has performed, in all material respects, the obligations required to be performed by it under the terms of any material agreement pursuant to which such Asset Seller or PKI Indonesia has rights in any Designated Intellectual Property, and none of the Asset Sellers or PKI Indonesia or, to Sellers’ knowledge, any third party is in material default under any such agreement.

          (d) Other than rights and licenses granted in the ordinary course of business, none of the Asset Sellers or PKI Indonesia or any of their respective Affiliates has granted to any third party any license or right to the commercial use of any of the Designated Intellectual Property. For purposes of this Agreement, the term “ Affiliate ” shall have the meaning assigned to it in Rule 12b-2 of the Securities Exchange Act of 1934.

     2.13 Contracts .

          (a) Except as set forth in Section 2.13 of the Disclosure Schedule, neither PKI Indonesia or (with respect to the operation or conduct of the Business) any Asset Seller is a party to, and the Acquired Assets do not include, any:

               (i) agreement (or group of related written agreements with the same person or such person’s Affiliates) for the lease of personal property from or to third parties providing for lease payments the remaining unpaid balance of which is in excess of $500,000, other than (A) purchase orders relating to the supply of goods and services to the Business in the ordinary course of business, (B) agreements executed in the ordinary course of business and (C) agreements that can be terminated by PKI Indonesia or any Asset Seller, as applicable, on 60 or fewer days’ notice without payment by PKI Indonesia or such Asset Seller of any penalty, liquidated damages or other similar payment;

               (ii) consulting agreement requiring the payment of more than $100,000 in any calendar year, other than any such agreements that can be terminated by PKI Indonesia or any Asset Seller, as applicable, on 60 or fewer days’ notice without payment by PKI Indonesia or such Asset Seller of any penalty, liquidated damages or other similar payment;

               (iii) agreement (or group of related written agreements with the same person or such person’s Affiliates) for the purchase of products or services under which the undelivered balance of such products and services is in excess of $500,000, other than any such contracts and agreements that can be terminated by PKI Indonesia or any Asset Seller, as applicable, on 60 or fewer days’ notice without payment by PKI Indonesia or such Asset Seller of any penalty, liquidated damages or other similar payment;

               (iv) agreement establishing a partnership or joint venture;

               (v) agreement (or group of related agreements) under which it has created, incurred, assumed or guaranteed (or may create, incur, assume or guarantee) indebtedness the outstanding balance of which is more than $500,000 or under which it has

imposed a Security Interest on any of its material assets, tangible or intangible, relating to the Business, except for any Security Interests relating to any capitalized lease financing;

               (vi) agreement involving the executive officers or directors of PKI Indonesia or (with respect to the Business) any Asset Seller;

               (vii) agreement for the employment of any individual on a full-time or part-time basis providing base annual compensation at a rate in excess of $150,000 during fiscal 2005;

               (viii) severance, “stay pay” or termination agreement with any officer or other employee of the Business;

               (ix) agreement for the sale of any Acquired Asset or any assets or properties of PKI Indonesia which involves a payment to be made to PKI Indonesia, any Asset Seller or any Affiliate thereof in excess of $500,000, other than agreements for the sale of goods and services in the ordinary course of business; and

               (x) agreement for the acquisition by PKI Indonesia or any Asset Seller of any operating business or the capital stock of any other person, other than acquisitions by any Asset Seller that have not or will not become integrated into the Business; provided , however , that (x) no agreement referred to in clauses (i) through (x) above need be disclosed unless PKI Indonesia or the applicable Asset Seller currently has, or may in the future have, any rights or obligations thereunder and (y) Leases are not required to be disclosed in response to any provision of this Section 2.13 and shall not constitute Designated Contracts (as defined in Section 2.13(c)).

          (b) Section 2.13(b) of the Disclosure Schedule lists each noncompetition agreement to which PKI Indonesia or (with respect to the operation or conduct of the Business) any Asset Seller is a party as of the date hereof.

          (c) PKI has made available to Buyer a correct and complete copy of each agreement (as amended to date) listed in Section 2.13(a) of the Disclosure Schedule (the “ Designated Contracts ”). Each Designated Contract is a legal, valid, binding and enforceable obligation of PKI Indonesia or the applicable Asset Seller, as the case may be, and, to Sellers’ knowledge, of each other party thereto (except as the foregoing may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws relating to or affecting the rights of creditors generally and by equitable principles, including those limiting the availability of specific performance, injunctive relief, and other equitable remedies and those providing for equitable defenses), and there exists no material defaults of PKI Indonesia or any Asset Seller, as the case may be, or, to Sellers’ knowledge, any other party thereto.

     2.14 Litigation . Section 2.14 of the Disclosure Schedule lists, as of the date of this Agreement, each judgment, order, decree, stipulation or injunction specifically naming any Asset Seller, PKI Indonesia or any of their respective property or business and relating to the Business. Section 2.14 of the Disclosure Schedule also lists, as of the date of this Agreement, each complaint, action, suit, proceeding, hearing or investigation relating to the Business of or in any Governmental Entity or, if material, before any arbitrator to which any Asset Seller or PKI Indonesia is a party or, to Sellers’ knowledge, which, if material, has been overtly threatened against any Asset Seller or PKI Indonesia and, in each case, relating to the Business.

     2.15 Labor Matters . Section 2.15 of the Disclosure Schedule lists, as of the date of this Agreement, each collective bargaining agreement relating to the Business to which any Asset

Seller or PKI Indonesia is a party or is bound. None of the Asset Sellers or PKI Indonesia has, with respect to the Business, experienced since January 1, 2003, any material strikes, grievances, claims of unfair labor practices or other collective bargaining disputes or have received, between January 1, 2003 and the date of this Agreement, any written notice of any unfair labor practice complaints or any other action, suit, complaint, charge, inquiry or investigation pending before the National Labor Relations Board (or other comparable labor relations boards or bureaus in foreign jurisdictions where Foreign Business Employees are employed).

     2.16 Employee Benefits.

          (a) For purposes of this Agreement, the following terms have the meanings hereinafter set forth:

               (i) “ COBRA ” means the health plan continuation coverage required under the provisions of Part 6 of Title I of ERISA, Section 4980B of the Code, and any applicable US state statute.

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

               (iii) “ ERISA Affiliate ” means any entity which is a member of: (i) a controlled group of corporations (as defined in Section 414(b) of the Code, (ii) a group of trades or businesses under common control (as defined in Section 414(c) of the Code), or (iii) an affiliated service group (as defined under Section 414(m) of the Code or the regulations under Section 414(o) of the Code), any of which includes any Asset Seller or PKI Indonesia.

               (iv) “ Foreign Business Benefit Arrangement ” means any material compensation or employment arrangement or program, including, but not limited to, any fringe

benefit, incentive compensation, bonus, severance, redundancy, deferred compensation, holiday, and perquisite covering or providing such benefits to Foreign Business Employees.

               (v) “ Foreign Business Benefit Plan ” means any Foreign Pension Plan, Foreign Welfare Plan, or Foreign Benefit Arrangement.

               (vi) “ Foreign Business Employee ” means each employee who is employed outside the United States by any Asset Seller or PKI Indonesia and who is engaged primarily in the Business.

               (vii) “ Foreign Business Pension Plan ” means any plan, fund or program which is maintained by any Asset Seller or PKI Indonesia or to which any Asset Seller or PKI Indonesia makes contributions or has liability in order to provide retirement income or deferral of income for periods extending beyond separation from service with respect to Foreign Business Employees.

               (viii) “ Foreign Business Welfare Plan ” means any material plan, fund or program which is maintained by any Asset Seller or PKI Indonesia or to which any Asset Seller or PKI Indonesia makes contributions or has liability for the purpose of providing Foreign Business Employees or their beneficiaries with healthcare benefits or benefits in the event of sickness, accident, death, dismemberment, unemployment or vacation.

               (ix) “ Multiemployer Plan ” means any multiemployer plan as defined in Section 4001(a)(3) of ERISA.

               (x) “ US Business Benefit Arrangement ” means any material compensation and employment arrangement which covers US Business Employees, including, but not limited to, any fringe benefit, incentive compensation, bonus, severance, deferred compensation, supplemental executive compensation and employment agreement.

               (xi) “ US Business Benefit Plan ” means any US Business Pension Plan, US Business Welfare Plan or US Business Benefit Arrangement.

               (xii) “ US Business Employee ” means each employee who is employed in the United States by an Asset Seller and who is engaged primarily in the Business.

               (xiii) “ US Business Pension Plan ” means any employee pension benefit plan (as defined in Section 3(2) of ERISA) which covers US Business Employees, excluding any plan maintained or contributed to under foreign law.

               (xiv) “ US Business Welfare Plan ” means any employee welfare benefit plan (as defined in Section 3(1) of ERISA) that is material to the Business and that covers any US Business Employee, excluding any plan which is maintained or to which contributions are made under foreign law.

          (b) Section 2.16(b) of the Disclosure Schedule sets forth as of the date of this Agreement a complete and accurate list of all US Business Benefit Plans and Foreign Business Benefit Plans. Complete and accurate copies of all written US Business Benefit Plans and Foreign Business Benefit Plans have been made available to Buyer. Each US Business Benefit Plan has been administered in all material respects in accordance with its terms and applicable law and the applicable Asset Seller or PKI Indonesia, as the case may be, has met its material obligations with respect to such plan. Each Asset Seller, each US Business Pension Plan, and each US Business Welfare Plan is in material compliance with the currently applicable provisions of ERISA and the Code. Copies of the most recent annual report and the most recent summary plan description with respect to each US Business Pension Plan and US Business Welfare Plan have been made available to Buyer.

          (c) Except as set forth on Section 2.16(c) of the Disclosure Schedule, there are no termination proceedings or other material claims (except claims for benefits payable in the normal operation of the US and Foreign Business Benefit Plans and proceedings with respect to qualified domestic relations orders under US Business Pension Plans), suits or proceedings against or involving any US or Foreign Business Benefit Plan or asserting any rights or claims to benefits under any US or Foreign Business Benefit Plan, or, to Sellers’ knowledge, investigations by any Governmental Entity involving any US or Foreign Business Benefit Plan.

          (d) Section 2.16(d) of the Disclosure Schedule lists each Multiemployer Plan to which any Asset Seller or any ERISA Affiliate contributes or is obligated to contribute for the benefit of any US Business Employee. No Asset Seller or ERISA Affiliate has withdrawn from any Multiemployer Plan in a complete or partial withdrawal that has resulted in any withdrawal liability which has not been satisfied in full. All contributions to any Multiemployer Plan required to be made by an Asset Seller or an ERISA Affiliate have been made in full.

          (e) Except as set forth in Section 2.16(e) of the Disclosure Schedule, no written or, to Sellers’ knowledge, oral representations have been made to any US Business Employee promising or guaranteeing any employer payment or funding for the continuation of healthcare, life or disability coverage beyond termination of employment, excluding continuation of COBRA health coverage.

          (f) No act or omission has occurred, and no condition exists, with respect to any US or Foreign Business Benefit Plan maintained by any Asset Seller, PKI Indonesia or any ERISA Affiliate that would subject any Asset Seller, PKI Indonesia or ERISA Affiliate to any material fine, penalty, Tax or liability of any kind imposed under applicable law, including ERISA or the Code (other than liabilities for benefits accrued under such plans).

          (g) After the execution of this Agreement, Sellers will provide Buyer with a true and complete list of the names and current base compensation rates of all employees actively employed by the Asset Sellers and PKI Indonesia in the conduct of the Business (“ Business Employees ”) and the names and current base compensation rates of all employees who are employed by the Asset Sellers in the conduct of the Business and who are temporarily absent from active employment by reason of disability, illness, injury, workers’ compensation, military leave, approved leave of absence or layoff (“ Inactive Business Employees ”) together with a summary indicating the current annual compensation of the Business Employees and Inactive Business Employees and the salaries, bonuses, incentive compensation, accrued vacation pay, group welfare benefits and perquisites, paid or payable to the Business Employees and Inactive Business Employees for the most recent fiscal year of the Asset Sellers and the amount of such benefits being accrued for the Business Employees and Inactive Business Employees as of the Closing Date.

     2.17 Environmental Matters .

          (a) When used in this Agreement, the following terms have the meanings provided below.

               (i) “ CERCLA ” shall mean the Federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42.U.S.C. §§ 9601 et seq., as in effect on the Closing Date.

               (ii) “ Release ” shall have the meaning assigned to that term in CERCLA and any other applicable Environmental Law.

               (iii) “ Environment ” shall have the meaning assigned to that term under CERCLA and any other applicable Environmental Law.

               (iv) “ Materials of Environmental Concern ” means any hazardous substance, pollutant, contaminant, solid waste, hazardous waste, oil, petroleum and petroleum products, as those terms are defined under CERCLA and any other applicable Environmental Law.

               (v) “ Environmental Law ” means any foreign, federal, state, provincial, or municipal statute, rule or regulation as in effect on the Closing Date, or any common law, relating to the Environment or occupational health and safety, including any statute, rule or regulation pertaining to (A) treatment, storage, disposal, transportation or generation of Materials of Environmental Concern; (B) air, water and noise pollution; (C) groundwater and soil contamination; or (D) the Release or threatened Release of Materials of Environmental Concern including, without limitation, CERCLA and The Solid Waste Disposal Act, 42 U.S.C. §§ 6901 et seq.

               (vi) “ Environmental Matters ” means any legal obligation or liability arising under Environmental Law.

               (vii) “ Off-Site Liabilities ” means Environmental Matters resulting from any transportation, treatment, storage, disposal or Release, or the arrangement therefor, in connection with the Business, of any Materials of Environmental Concern by the Business, or any agent or contractor of the Business, to or at any property, location, site or facility other than a Business Property.

               (viii) “ Business Properties ” means the Owned Real Property and the Leased Facilities.

          (b) To Sellers’ knowledge, except as described or identified in the Disclosure Schedule or in a document listed in the Disclosure Schedule:

               (i) the Business’ operations at the Business Properties are in compliance with applicable Environmental Laws, except for any failures to comply with applicable Environmental Laws that would not reasonably be expected to result in material liability under applicable Environmental Law;

               (ii) there is no pending or threatened civil or criminal litigation, notice of violation or administrative proceeding, investigation or information request relating to any Environmental Law involving any of the Business Properties or any property formerly owned, occupied or operated by the Business, except for such litigation, notice, proceeding, investigation or information request that would not reasonably be expected to result in material liability under applicable Environmental Law; and

               (iii) the applicable Asset Seller or PKI Indonesia has those permits, licenses and approvals required under applicable Environmental Law to operate the Business Properties as currently operated by such Asset Seller or PKI Indonesia, as the case may be, except for any such permits, licenses or approvals the absence of which would not reasonably be expected to result in a material liability under applicable Environmental Law.

          (c) To Sellers’ knowledge, except as described or identified in the Disclosure Schedule or in a document listed in the Disclosure Schedule:

               (i) with respect to the Business Properties and any property formerly owned, occupied or operated by PKI Indonesia or any Asset Seller with respect to the Business, there has been no Release of Materials of Environmental Concern that would reasonably be expected to result in material liability under applicable Environmental Law; and

               (ii) with respect to each Asset Seller and PKI Indonesia, there are no Off-Site Liabilities relating to the Business that would reasonably be expected to result in material liability under applicable Environmental Law.

          (d) The Parties agree that the only representations and warranties of PKI herein as to any Environmental Matters are those contained in this Section 2.17 and in Section 2.24. Without limiting the generality of the foregoing, Buyer specifically acknowledges that the representations and warranties contained in Sections 2.14, 2.18 and 2.19 do not relate to Environmental Matters.

     2.18 Legal Compliance . PKI Indonesia and (with respect to the Business) each Asset Seller is in compliance, in all material respects, with all material applicable laws of any federal, state or foreign government, or any Governmental Entity, currently in effect with respect to the Business. Neither PKI Indonesia nor any Asset Seller has received written notice of any material pending action, suit, proceeding, hearing, investigation, claim, demand or notice relating to the Business alleging any failure to so comply.

     2.19 Permits . To Sellers’ knowledge, (a) neither PKI Indonesia nor any Asset Seller is in material violation of or material default under any permit, license, franchise or authorization from any Governmental Authority used in its business or operations as presently conducted and material to the business or operations of the Business (collectively, the “ Permits ”) and (b) no Permit will be revoked, terminated prior to its normal expiration date or not renewed solely as a result of the consummation of the transactions contemplated by this Agreement.

     2.20 Business Relationships with Affiliates . Section 2.20 of the Disclosure Schedule lists any written agreements with respect to the Business whereby any Affiliate (other than PKI Indonesia) of any Asset Seller directly or indirectly (a) owns any property or right, tangible or

intangible, which is used in and material to the Business, (b) has any material claim or cause of action against the Business, or (c) owes any money to, or is owed any money by, the Business.

     2.21 Brokers’ Fees . Except for the fees payable to Merrill Lynch & Co., neither PKI Indonesia nor any Seller has any liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement.

     2.22 Entire Business . Except for the Excluded Assets and any Deferred Items, and assuming Buyer (or one or more of its Affiliates) has the ability to provide to the Business all corporate-level services currently provided to the Business by the Sellers, the Acquired Assets and the assets of PKI Indonesia are, when utilized by a labor force substantially similar to that employed by PKI Indonesia and the Asset Sellers in connection with the Business on the date hereof, adequate to conduct the Business immediately following the Closing in all material respects as currently conducted.

     2.23 Condition of Assets . Except as set forth on Section 2.23 of the Disclosure Schedule, as of the date hereof, the material physical Acquired Assets are, in all material respects, in light of their age and prior use, in reasonable repair and operating condition, ordinary wear and tear excepted, as is suitable for their current use.

     2.24 Asbestos Matters . Except as disclosed in Section 2.24 of the Disclosure Schedule or in a document listed in the Disclosure Schedule:

          (a) There are and, to Sellers’ knowledge, have been, no asbestos or asbestos-containing materials located on any real property or facilities currently or, to the Sellers’ knowledge, formerly owned, leased or used by the Business or, to the Sellers’ knowledge, by any of their respective predecessors, for which the materials have resulted or, due to their present condition, would reasonably be expected to result in, harmful exposures;

          (b) No products manufactured, distributed or sold by the Business since December 31, 1999 and, to the Sellers’ knowledge, prior to December 31, 1999, include or included any asbestos or any components that include or included asbestos;

          (c) To the Sellers’ knowledge, as of the date hereof, neither the Business nor any of the Sellers’ respective predecessors has incurred or been subjected to any litigation, liability, claim, action, proceeding, investigation or regulatory action resulting from or in connection with any release of or exposure of any persons to asbestos or asbestos-containing materials; or

          (d)&nb