PURCHASE AGREEMENT
dated as of
May 7, 2000
between
TYCO GROUP S.A.R.L.
and
THOMAS & BETTS CORPORATION
TABLE OF CONTENTS
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PAGE
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ARTICLE 1DEFINITIONS
SECTION 1.01. DEFINITIONS....................................................1
ARTICLE 2PURCHASE AND SALE
SECTION 2.01. PURCHASE AND SALE..............................................6
SECTION 2.02. EXCLUDED ASSETS................................................7
SECTION 2.03. ASSUMED LIABILITIES............................................7
SECTION 2.04. EXCLUDED LIABILITIES...........................................7
SECTION 2.05. ASSIGNMENT OF CONTRACTS AND RIGHTS.............................7
SECTION 2.06. PURCHASE PRICE.................................................7
SECTION 2.07. CLOSING........................................................7
SECTION 2.08. CLOSING STATEMENT..............................................8
SECTION 2.09. ADJUSTMENT OF PURCHASE PRICE..................................10
ARTICLE 3REPRESENTATIONS AND WARRANTIES OF SELLER
SECTION 3.01. CORPORATE EXISTENCE AND POWER.................................11
SECTION 3.02. CORPORATE AUTHORIZATION.......................................11
SECTION 3.03. GOVERNMENTAL AUTHORIZATION....................................11
SECTION 3.04. NONCONTRAVENTION..............................................11
SECTION 3.05. REQUIRED CONSENTS.............................................12
SECTION 3.06. ACQUIRED SUBSIDIARIES; OTHER EQUITY INTERESTS.................12
SECTION 3.07. MATERIAL CONTRACTS............................................13
SECTION 3.08. LITIGATION....................................................14
SECTION 3.09. COMPLIANCE WITH LAWS AND COURT ORDERS.........................14
SECTION 3.10. REAL PROPERTY.................................................14
SECTION 3.11. INTELLECTUAL PROPERTY.........................................15
SECTION 3.12. INSURANCE COVERAGE............................................17
SECTION 3.13. FINDERS' FEES.................................................17
SECTION 3.14. EMPLOYEES.....................................................17
SECTION 3.15. EMPLOYEE BENEFIT PLANS........................................17
SECTION 3.16. LABOR MATTERS.................................................20
SECTION 3.17. ENVIRONMENTAL COMPLIANCE......................................21
SECTION 3.18. SUFFICIENCY OF ASSETS; PERSONAL PROPERTY......................21
SECTION 3.19. POWERS OF ATTORNEY............................................22
SECTION 3.20. GUARANTIES....................................................22
SECTION 3.21. NOTES AND ACCOUNTS RECEIVABLE.................................22
SECTION 3.22. RESTRICTIONS ON BUSINESS ACTIVITIES...........................22
SECTION 3.23. PRODUCT LIABILITY AND RECALL..................................22
SECTION 3.24. PRODUCT WARRANTY..............................................23
SECTION 3.25. UNDISCLOSED LIABILITIES.......................................23
ARTICLE 4REPRESENTATIONS AND WARRANTIES OF BUYER
SECTION 4.01. CORPORATE EXISTENCE AND POWER.................................23
SECTION 4.02. CORPORATE AUTHORIZATION.......................................23
SECTION 4.03. GOVERNMENTAL AUTHORIZATION....................................24
SECTION 4.04. NONCONTRAVENTION..............................................24
SECTION 4.05. FINANCING.....................................................24
SECTION 4.06. LITIGATION....................................................24
SECTION 4.07. FINDERS' FEES.................................................24
SECTION 4.08. NO OTHER REPRESENTATIONS......................................24
ARTICLE 5COVENANTS OF SELLER
SECTION 5.01. CONDUCT OF THE BUSINESS.......................................25
SECTION 5.02. ACCESS TO INFORMATION; CONFIDENTIALITY........................26
SECTION 5.03. NOTICES OF CERTAIN EVENTS.....................................27
SECTION 5.04. RESIGNATIONS..................................................27
SECTION 5.05. NON-COMPETITION AGREEMENT.....................................27
SECTION 5.06. BANK ACCOUNTS; SAFE DEPOSIT BOXES.............................29
SECTION 5.07. DIVIDENDS.....................................................29
SECTION 5.08. CERTAIN SECURITY INTERESTS....................................29
ARTICLE 6COVENANTS OF BUYER
SECTION 6.01. CONFIDENTIALITY...............................................29
SECTION 6.02. ACCESS........................................................30
SECTION 6.03. USE OF NAMES AND TRADEMARKS...................................30
ARTICLE 7COVENANTS OF BUYER AND SELLER
SECTION 7.01. REASONABLE BEST EFFORTS; FURTHER ASSURANCES...................33
SECTION 7.02. CERTAIN FILINGS...............................................33
SECTION 7.03. PUBLIC ANNOUNCEMENTS..........................................34
SECTION 7.04. WARN ACT......................................................34
SECTION 7.05. TRANSITION SERVICES AGREEMENT.................................34
SECTION 7.06. NOTICE OF OCCURRENCE OR NON-OCCURRENCE........................34
SECTION 7.07. INTELLECTUAL PROPERTY LICENSES................................34
SECTION 7.08. PRODUCT RECALL MATTERS........................................35
ARTICLE 8TAX MATTERS
SECTION 8.01. DEFINITIONS...................................................36
SECTION 8.02. TAX REPRESENTATIONS...........................................37
SECTION 8.03. PURCHASE PRICE ALLOCATION; TAX COVENANTS......................38
SECTION 8.04. TAX SHARING...................................................40
SECTION 8.05. COOPERATION ON TAX MATTERS....................................40
SECTION 8.06. INDEMNIFICATION BY SELLER.....................................40
SECTION 8.07. SURVIVAL......................................................42
ARTICLE 9EMPLOYEE BENEFITS
SECTION 9.01. EMPLOYEES AND OFFERS OF EMPLOYMENT............................42
SECTION 9.02. SELLER PLANS..................................................44
SECTION 9.03. THIRD PARTY BENEFICIARIES.....................................45
SECTION 9.04. EXCLUDED EMPLOYEES............................................45
SECTION 9.05. RETENTION AGREEMENTS..........................................45
ARTICLE 10CONDITIONS TO CLOSING
SECTION 10.01. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER................46
SECTION 10.02. CONDITIONS TO OBLIGATION OF BUYER............................47
SECTION 10.03. CONDITIONS TO OBLIGATION OF SELLER...........................47
ARTICLE 11SURVIVAL; INDEMNIFICATION
SECTION 11.01. SURVIVAL.....................................................48
SECTION 11.02. INDEMNIFICATION..............................................48
SECTION 11.03. PROCEDURES...................................................50
SECTION 11.04. CALCULATION OF DAMAGES.......................................53
SECTION 11.05. ASSIGNMENT OF CLAIMS.........................................53
SECTION 11.06. EXCLUSIVITY..................................................54
ARTICLE 12TERMINATION
SECTION 12.01. GROUNDS FOR TERMINATION......................................54
SECTION 12.02. EFFECT OF TERMINATION........................................54
ARTICLE 13MISCELLANEOUS
SECTION 13.01. NOTICES......................................................55
SECTION 13.02. AMENDMENTS AND WAIVERS.......................................56
SECTION 13.03. EXPENSES.....................................................56
SECTION 13.04. SUCCESSORS AND ASSIGNS.......................................56
SECTION 13.05. GOVERNING LAW................................................57
SECTION 13.06. JURISDICTION.................................................57
SECTION 13.07. WAIVER OF JURY TRIAL.........................................57
SECTION 13.08. COUNTERPARTS; THIRD PARTY BENEFICIARIES......................57
SECTION 13.09. ENTIRE AGREEMENT.............................................57
SECTION 13.10. BULK SALES LAWS..............................................58
SECTION 13.11. CAPTIONS.....................................................58
SECTION 13.12. DISCLOSURE SCHEDULES.........................................58
PAGE
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ANNEXES
Annex A Reorganization
Annex B Purchased Assets
Annex C Excluded Assets
Annex D Assumed Liabilities
Annex E Excluded Liabilities
Annex F Product Lines
Annex G Buyer's Knowledge
Annex H Seller's Knowledge
Annex I Acquired Subsidiaries
Annex J Transitional Services
vi
PURCHASE AGREEMENT
PURCHASE AGREEMENT dated as of May 7, 2000 between Tyco Group S.a.r.l.,
a Luxembourg corporation ("BUYER"), and Thomas & Betts Corporation, a Tennessee
corporation ("SELLER").
W I T N E S S E T H :
WHEREAS, Seller and certain of its subsidiaries conduct a business
engaged in the manufacture, sale and distribution of electronic connectors and
related products to the telecommunications, datacom, personal computer,
automotive and other industries known as the Seller's Electronic OEM business;
WHEREAS, Buyer desires to acquire the assets and assume certain
liabilities of such business from Seller, and Seller desires to sell such assets
and transfer certain of such liabilities to Buyer, upon the terms and subject to
the conditions hereinafter set forth; and
WHEREAS, in furtherance of the transactions described above, Seller
will undertake the Reorganization (as defined below).
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1. DEFINITIONS.
(a) The following terms, as used herein, have the following meanings:
"ACCOUNTING REFEREE" means an internationally recognized accounting
firm mutually acceptable to Buyer and Seller with no material relationship with
Buyer and Seller or their Affiliates.
"ACQUIRED SUBSIDIARIES" means the Domestic Acquired Subsidiaries and
the Foreign Acquired Subsidiaries.
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such other Person.
"ASSUMED LIABILITIES" means the liabilities and obligations set forth
on Annex D to this Agreement.
"BUSINESS" means essentially all of the Electronic OEM business of
Seller and its subsidiaries consisting of the manufacture, sale and distribution
of the Products as currently conducted by Seller and its subsidiaries.
"BUYER DESIGNEE" means an Affiliate of Buyer notified to Seller not
less than five days prior to the Closing Date.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended on or prior to the Closing Date, and any
rules or regulations promulgated thereunder on or prior to the Closing Date.
"CLOSING DATE" means the date of the Closing.
"DOMESTIC ACQUIRED SUBSIDIARIES" means each of the entities so
identified on Annex I to this Agreement.
"EMPLOYEE PLAN" means each employment, severance, retention, consulting
or similar contract, plan, arrangement or policy and each other plan or
arrangement providing for compensation, bonuses, profit-sharing, stock purchase,
stock option or other equity-related rights or other forms of incentive or
deferred compensation, vacation benefits, insurance coverage, health, medical or
dental benefits, employee assistance program disability benefits, workers'
compensation, supplemental unemployment benefits, severance benefits and
post-employment or retirement benefits, including, without limitation, for any
of the foregoing, any "employee benefit plan", as defined in Section 3(3) of
ERISA, which is not an International Plan and (i) which is maintained,
administered or contributed to by Seller or any of its ERISA Affiliates and
covers any Business Employee or former Business Employee of Seller or any of its
ERISA Affiliates or (ii) under which Seller or any of its ERISA Affiliates has
any liability of any U.S. Business Employee or former Business Employee.
"ENVIRONMENTAL LAWS" means any federal, state, local or foreign
statutes, laws, regulations, rules, judgments, orders or decrees relating to
human health and safety, the environment or to pollutants, contaminants, wastes
or any toxic or
otherwise hazardous substance, waste or material, each as in effect on or prior
to the Closing Date.
"ENVIRONMENTAL LIABILITIES" means any and all liabilities arising in
connection with or in any way relating to the Business (as currently or
previously conducted), the Purchased Assets or any activities or operations
occurring or conducted at or in connection with the ownership or operation of
the Real Property or any other real property or facility now or previously
owned, leased or operated by Seller or any of its Subsidiaries in connection
with the Business or by any Acquired Subsidiaries (including, without
limitation, offsite disposal), whether accrued, contingent, absolute,
determined, determinable or otherwise, which arise under or relate to any
Environmental Law, but only to the extent such liabilities arise out of actions
occurring or conditions existing prior to the Closing Date.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE" of any entity means any other Person which, together
with such Person, would be treated as a single employer under Section 414 of the
Code.
"EUROPEAN HEADQUARTERS" means the operations of Thomas & Betts Euro
Distribution, Thomas & Betts European Centre, and Thomas & Betts Euro Service
Centre that are primarily related to the Business.
"EXCLUDED ASSETS" means the assets set forth on Annex C to this
Agreement.
"EXCLUDED EMPLOYEES" means (i) all employees of Thomas & Betts Euro
Distribution S.A. and (ii) such employees of the European Headquarters that are
not designated as "Business Employees" pursuant to Section 9.04
"EXCLUDED LIABILITIES" means the obligations and liabilities set forth
on Annex E to this Agreement.
"FOREIGN ACQUIRED SUBSIDIARIES" means each of the entities so
identified on Annex I to this Agreement.
"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
3
"INTELLECTUAL PROPERTY RIGHT" means all United States and foreign
patents, patent applications, all software programs and information technology
(including any licenses therefore), trademarks (whether registered or
unregistered), service marks, trade names, brand names, domain names, logos,
copyrights and any applications therefor, and any other proprietary rights,
including, without limitation, know-how, inventions, discoveries and
improvements, shop rights, processes, methods and formulae, trade secrets,
product drawings, specifications, designs, opinions of counsel and other
technical information.
"INTERNATIONAL PLAN" means each employment, severance, consulting or
similar contract, plan, arrangement or policy and each other plan or arrangement
providing for compensation, bonuses, profit-sharing, stock purchase, stock
option or other equity-related rights or other forms of incentive or deferred
compensation, vacation benefits, insurance coverage, health, medical or dental
benefits, employee assistance program, disability benefits, workers'
compensation, supplemental unemployment benefits, severance benefits and
post-employment or retirement benefits which is maintained primarily for the
benefit of Other Business Employees or former Other Business Employees.
"KEY COUNTRIES" means the United States, Germany, France, the United
Kingdom, Italy, Singapore, Switzerland and Japan.
"KNOWLEDGE OF BUYER", "BUYER'S KNOWLEDGE" or any other similar
knowledge qualification in this Agreement means to the actual knowledge of the
individuals set forth on Annex G to this Agreement.
"KNOWLEDGE OF SELLER," "SELLER'S KNOWLEDGE" or any other similar
knowledge qualification in this Agreement means to the actual knowledge of the
individuals set forth on Annex H to this Agreement.
"LIEN" means, with respect to any property or asset, any mortgage,
lien, pledge, charge, security interest or encumbrance in respect of such
property or asset.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the
business, assets or results of operations of the Business, except any such
effect resulting from or arising in connection with (i) changes or conditions
affecting the electronic components industry generally or (ii) changes in
economic, regulatory or political conditions generally.
4
"PERSON" means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
"PRODUCTS" means those product lines set forth on Annex F hereto.
"PURCHASED ASSETS" means the assets set forth on Annex B to this
Agreement.
"REORGANIZATION" means the transactions set forth on Annex A to this
Agreement.
"SELLER DESIGNEE" means a Subsidiary of Seller which owns any of the
Purchased Assets notified to Buyer not less than ten days prior to the Closing
Date.
"SELLER NAME" means "Thomas & Betts", "T&B" and any and all derivations
thereof.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
____ _______
TERM SECTION
Accounting Certification 2.08
Acquired Business 5.05
Acquired Subsidiary Securities 3.06(b)
Allocation Statement 8.03
Base Long-Term Tangible Assets 2.09
Base Working Capital 2.09
Basket Amount 11.02
Business Employee 3.14
Business Intellectual Property Rights 3.11
Buyer Preamble
Cap Amount 11.02
Closing 2.07
Closing Long-Term Tangible Assets 2.08
Closing Statement 2.08
Closing Working Capital 2.08
Code 8.01
Collective Bargaining Agreement 3.16
Combined Tax 8.01
Competing Business 5.05
Damages 11.02
5
____ _______
TERM SECTION
Environmental Deductible 11.02
Excluded Employees 9.04
Existing Inventory 6.03
Final Long-Term Tangible Assets 2.09
Final Working Capital 2.09
Indemnified Party 11.03
Indemnifying Party 11.03
Loss 8.06(a)
Marked Instrumentalities 6.03
Other Business Employee 3.14
Other Marked Assets 6.03
Permitted Liens 3.10
Potential Contributor 11.05
Pre-Closing Tax Period 8.01
Price Allocation 8.03(b)
Primary Closing 10.01
Purchase Price 2.06
Real Property 3.10
Required Consents 3.05
Returns 8.02
Section 338(h)(10) Election 8.03(b)
Seller Preamble
Seller Group 8.01
Seller 401(k) Plans 9.02
Subsequent Closing 10.01
Subsidiary 8.01
Tax 8.01
Tax Asset 8.01
Tax Benefit 8.06(c)
Tax Sharing Agreement 8.01
Taxes Act 3.15
Taxing Authority 8.01
Third Party Claim 11.03
Transferred Employees 9.01
UK Pension Schemes 3.15
U.S. Business Employee 3.14
WARN Act 7.04
ARTICLE 2
6
PURCHASE AND SALE
SECTION 2.1. PURCHASE AND SALE. Except as otherwise provided below,
upon the terms and subject to the conditions of this Agreement, Buyer agrees to
purchase, accept and acquire or cause one or more Buyer Designees to purchase,
accept and acquire from Seller or one or more Seller Designees and Seller agrees
to sell, convey, transfer, assign and deliver, or cause to be sold, conveyed,
transferred, assigned and delivered, to Buyer or one or more Buyer Designees at
the Closing, free and clear of all Liens, other than Permitted Liens, all of
Seller's right, title and interest in, to and under the Purchased Assets.
SECTION 2.2. EXCLUDED ASSETS. Buyer expressly understands and agrees
that the Excluded Assets shall be excluded from the Purchased Assets.
SECTION 2.3. ASSUMED LIABILITIES. Upon the terms and subject to the
conditions of this Agreement, Buyer agrees, effective at the time of the
Closing, to assume, or to cause one or more Buyer Designees to assume, any and
all Assumed Liabilities and to subsequently pay, honor and discharge when due
and payable the Assumed Liabilities, subject to the terms of this Agreement.
SECTION 2.4. EXCLUDED LIABILITIES. Seller expressly understands and
agrees that the Excluded Liabilities shall be excluded from the Assumed
Liabilities and Seller shall, or shall cause one or more Seller Designees to
subsequently pay, honor and discharge when due and payable all of the Excluded
Liabilities, subject to the terms of this Agreement.
SECTION 2.5. ASSIGNMENT OF CONTRACTS AND RIGHTS. Anything in this
Agreement to the contrary notwithstanding, this Agreement shall not constitute
an agreement to assign any Purchased Asset or any right thereunder if an
attempted assignment, without the consent of a third party, would constitute a
breach or in any way adversely affect the rights of Buyer or Seller thereunder.
If such consent is not obtained, Seller and Buyer will cooperate in a mutually
agreeable arrangement under which Buyer would obtain the benefits and assume the
obligations thereunder in accordance with this Agreement.
SECTION 2.6. PURCHASE PRICE. The purchase price for the Purchased
Assets (the "PURCHASE PRICE") is $750,000,000 in cash, less any indebtedness for
borrowed money of any Acquired Subsidiary outstanding as of the Closing Date.
The Purchase Price shall be paid as provided in Section 2.07 and shall be
subject to adjustment as provided in Section 2.09.
7
SECTION 2.7. CLOSING. (a The closing (the "CLOSING") of the purchase
and sale of the Purchased Assets and the assumption of the Assumed Liabilities
hereunder shall take place at the offices of Davis Polk & Wardwell, 450
Lexington Avenue, New York, New York, as soon as possible, but in no event later
than ten business days, after satisfaction of the conditions set forth in
Article 10, or at such other time or place as Buyer and Seller may agree. At the
Closing:
(i Buyer shall deliver $750,000,000, less any indebtedness for
borrowed money of any Acquired Subsidiary outstanding as of the Closing
Date, in immediately available funds by wire transfer to an account or
accounts designated by Seller, by notice to Buyer, not later than two
business days prior to the Closing Date.
(ii Seller and Buyer shall enter into such assignment and
assumption agreements, deeds, purchase agreements, bills of sale,
endorsements, consents, and other good and sufficient instruments of
conveyance and assignment and shall make all appropriate filings as the
parties and their respective counsel shall deem reasonably necessary
for Buyer and/or one or more Buyer Designees to acquire all right,
title and interest in, to and under the Purchased Assets and to assume
all of the Assumed Liabilities.
(b With respect to Acquired Subsidiaries as to which directors or
other nominees of Seller or its subsidiaries own shares of capital stock for the
purpose of satisfying requirements of applicable law, Seller and Buyer shall
take all necessary or appropriate action to effect the transfer of such shares
to new directors or other nominees designated by Buyer as, when and to the
extent permitted by applicable law.
(c In the event that Buyer desires to have any tangible Purchased
Assets delivered to a location other than the location at which such assets are
located on the Closing Date, as promptly as practicable following the Closing,
Seller shall cause such assets to be shipped to the location specified in
writing by Buyer, the cost of such shipment and all applicable duties, customs
and similar fees relating to such shipments to be borne by Buyer.
SECTION 2.8. CLOSING STATEMENT. (a As promptly as practicable, but no
later than 90 days, after the Closing Date, Buyer will cause to be prepared and
delivered to Seller a statement setting forth Buyer's calculation of Closing
Working Capital and Closing Long-Term Tangible Assets (the "CLOSING STATEMENT")
and the Accounting Certification. The Closing Statement shall fairly present the
book value of all items relevant to the calculation of Closing Working
8
Capital and Closing Long-Term Tangible Assets as at the close of business on the
Closing Date in accordance with generally accepted accounting principles in the
United States applied on a consistent basis with Thomas & Betts Corporation's
audited financial statements for prior years. "ACCOUNTING CERTIFICATION" means a
report in which PriceWaterhouseCoopers LLP, or such other firm of similar
stature as selected by Buyer and reasonably satisfactory to Seller, certifies
that the Closing Statement and all values and calculations therein have been
calculated in accordance with this Section 2.08. "CLOSING WORKING CAPITAL" means
the excess of (x) all inventories net of reserves, accounts receivable net of
reserves which are classified as current assets, and cash, cash equivalents,
marketable securities and similar investments over (y) trade payables, in each
case as shown on the Closing Statement, and determined excluding the effect
(including the Tax effect) of any act, event or transaction occurring after the
Closing. "CLOSING LONG-TERM TANGIBLE ASSETS" means all property, plant and
equipment net of accumulated depreciation and the equity investment of the
Acquired Subsidiaries in Exemplar/T&B L.L.C., in each case as shown on the
Closing Statement, and determined excluding the effect (including the Tax
effect) of any act, event or transaction occurring after the Closing.
(b If Seller disagrees with Buyer's calculation of Closing Working
Capital or Closing Long-Term Tangible Assets delivered pursuant to Section
2.08(a), Seller may, within 30 days after delivery of the documents referred to
in Section 2.08(a), deliver a notice to Buyer disagreeing with such calculation
and setting forth Seller's calculation of such amount. Any such notice of
disagreement shall specify those items or amounts as to which Seller disagrees,
and Seller shall be deemed to have agreed with all other items and amounts
contained in the Closing Statement and the calculations of Closing Working
Capital and Closing Long-Term Tangible Assets delivered pursuant to Section
2.08(a).
(c If a notice of disagreement shall be duly delivered pursuant to
Section 2.08(b), Buyer and Seller shall, during the 30 days following such
delivery, use their best efforts to reach agreement on the disputed items or
amounts in order to determine, as may be required, the amount of Closing Working
Capital and Closing Long-Term Tangible Assets, which amounts shall not be less
than the amounts thereof shown in Buyer's calculations delivered pursuant to
Section 2.08(a) nor more than the amounts thereof shown in Seller's calculation
delivered pursuant to Section 2.08(b). If during such period, Buyer and Seller
are unable to reach such agreement, they shall promptly thereafter cause the
Accounting Referee promptly to review this Agreement and the disputed items or
amounts for the purpose of calculating Closing Working Capital and Closing
Long-Term Tangible Assets. In making such calculation, the
9
Accounting Referee shall consider only those items or amounts in the Closing
Statement or Buyer's calculation of Closing Working Capital and Closing
Long-Term Tangible Assets as to which Seller has disagreed. The Accounting
Referee shall deliver to Buyer and Seller, as promptly as practicable, a report
setting forth such calculation. Such report shall be final and binding upon
Buyer and Seller. The cost of such review and report shall be borne equally by
Buyer and Seller.
(d Buyer and Seller agree that they will, and agree to cause their
respective independent accountants to, cooperate and assist in the preparation
of the Closing Statement and the calculation of Closing Working Capital and
Closing Long-Term Tangible Assets and in the conduct of the audits and reviews
referred to in this Section 2.08, including without limitation, the making
available to the extent necessary of books, records, work papers and personnel.
Notwithstanding the generality of the foregoing, Buyer agrees that
representatives of Seller and Seller's independent accounting firm may
participate in any physical inventory and observation of assets at the Business'
facilities undertaken by Buyer in connection with the preparation of the Closing
Statement, the costs of such participation to be for Seller's account.
(e If there shall occur a Primary Closing and one or more Subsequent
Closings (as defined below) as contemplated by Section 10.01(b), for purposes of
this Section 2.08 the "Closing Date" shall be the date of the Primary Closing
(as defined below), and the calculations required hereunder shall be made with
respect to the entirety of the Business as of such date.
SECTION 2.9. ADJUSTMENT OF PURCHASE PRICE. (a If Base Working Capital
exceeds Final Working Capital, Seller shall pay to Buyer, as an adjustment to
the Purchase Price, in the manner and with interest as provided in Section
2.09(c), the amount of such excess. "BASE WORKING CAPITAL" means $233,000,000.
"FINAL WORKING CAPITAL" means Closing Working Capital (i) as shown in Buyer's
calculation delivered pursuant to Section 2.08(a), if no notice of disagreement
with respect thereto is duly delivered pursuant to Section 2.08(b); or (ii) if
such a notice of disagreement is delivered, (A) as agreed by Buyer and Seller
pursuant to Section 2.08(c) or (B) in the absence of such agreement, as shown in
the Accounting Referee's calculation delivered pursuant to Section 2.08(c);
PROVIDED that in no event shall Final Working Capital be less than Buyer's
calculation of Closing Working Capital delivered pursuant to Section 2.08(a) or
more than Seller's calculation of Closing Working Capital delivered pursuant to
Section 2.08(b).
(b If Base Long-Term Tangible Assets exceeds Final Long-Term Tangible
Assets, Seller shall pay to Buyer, as an adjustment to the Purchase Price,
10
in the manner and with interest as provided in Section 2.09(c), the amount of
such excess. "BASE LONG-TERM TANGIBLE ASSETS" means $191,000,000. "FINAL
LONG-TERM TANGIBLE ASSETS" means Closing Long-Term Tangible Assets (i) as shown
in Buyer's calculation delivered pursuant to Section 2.08(a), if no notice of
disagreement with respect thereto is duly delivered pursuant to Section 2.08(b);
or (ii) if such a notice of disagreement is delivered, (A) as agreed by Buyer
and Seller pursuant to Section 2.08(c) or (B) in the absence of such agreement,
as shown in the Accounting Referee's calculation delivered pursuant to Section
2.08(c); PROVIDED that in no event shall Final Long-Term Tangible Assets be less
than Buyer's calculation of Closing Long-Term Tangible Assets delivered pursuant
to Section 2.08(a) or more than Seller's calculation of Closing Long-Term
Tangible Assets delivered pursuant to Section 2.08(b).
(c Any payment pursuant to Section 2.09(a) or 2.09(b) shall be made at
a mutually convenient time and place within 10 days after Final Working Capital
and Final Long-Term Tangible Assets have been determined pursuant to this
Section 2.09, by delivery by Seller, by wire transfer of immediately available
funds, to Buyer. The amount of any payment to be made pursuant to this Section
2.09 shall bear interest from and including the Closing Date to but excluding
the date of payment at a rate per annum equal to the Prime Rate as published in
the WALL STREET JOURNAL, Eastern Edition in effect from time to time during the
period from the Closing Date to the date of payment. Such interest shall be
payable at the same time as the payment to which it relates and shall be
calculated daily on the basis of a year of 365 days and the actual number of
days elapsed.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Except as previously disclosed to Buyer in writing, Seller represents
and warrants to Buyer as of the date hereof and as of the Closing Date that:
SECTION 3.1. CORPORATE EXISTENCE AND POWER. Seller is a corporation
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate powers and all material
governmental licenses, authorizations, permits, consents and approvals required
to carry on its business as now conducted.
SECTION 3.2. CORPORATE AUTHORIZATION. The execution, delivery and
performance by Seller of this Agreement and the consummation of the
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transactions contemplated hereby are within Seller's corporate powers and have
been duly authorized by all necessary corporate action on the part of Seller.
This Agreement constitutes a valid and binding agreement of Seller.
SECTION 3.3. GOVERNMENTAL AUTHORIZATION. Except as set forth on
Schedule 3.03, the execution, delivery and performance by Seller of this
Agreement and the consummation of the transactions contemplated hereby require
no action by or in respect of, or filing with, any governmental body, agency or
official other than (i) compliance with any applicable requirements of the HSR
Act and any other applicable antitrust, competition or merger control laws; (ii)
any such action or filing as to which the failure to make or obtain would not
materially delay the consummation of the transactions contemplated hereby or
materially impair the ability of Buyer to conduct the Business as currently
conducted, and (iii) any filings or notices not required to be made or given
until after the Closing Date.
SECTION 3.4. NONCONTRAVENTION. Except as set forth on Schedule 3.04,
the execution, delivery and performance by Seller of this Agreement and the
consummation of the transactions contemplated hereby by Seller and any Seller
Designee do not and will not (i) violate the certificate of incorporation or
bylaws of Seller or any Acquired Subsidiary, (ii) assuming compliance with the
matters referred to in Section 3.03, violate in any material respect any
applicable law, rule, regulation, judgment, injunction, order or decree, (iii)
assuming the obtaining of all Required Consents, constitute a material default
under or give rise to any right of termination, cancellation or acceleration of
any material right or obligation or to a loss of any material benefit under any
agreement disclosed or required to be disclosed pursuant to Section 3.07 or (iv)
result in the creation or imposition of any Lien on any Purchased Asset, except
for Permitted Liens.
SECTION 3.5. REQUIRED CONSENTS. Schedule 3.05 sets forth each agreement
disclosed or required to be disclosed pursuant to Section 3.07 or Section
3.11(e) requiring a consent or other action by any Person as a result of the
execution, delivery and performance of this Agreement (the "REQUIRED CONSENTS").
SECTION 3.6. ACQUIRED SUBSIDIARIES; OTHER EQUITY INTERESTS. (a Each
Acquired Subsidiary is a corporation, partnership or company duly organized,
validly existing and, to the extent applicable in such jurisdiction, in good
standing under the laws of its jurisdiction of incorporation, has all corporate
powers and all material governmental licenses, authorizations, permits, consents
and approvals required to carry on its business as now conducted, and is duly
qualified to do business as a foreign corporation and is, to the extent
applicable in such
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jurisdiction, in good standing in each jurisdiction where such qualification is
necessary, except for those jurisdictions where failure to be so qualified would
not, individually or in the aggregate, have a Material Adverse Effect.
(b Except as set forth on Schedule 3.06(b), all of the outstanding
capital stock or other voting securities of each Acquired Subsidiary is owned by
Seller, directly or indirectly, free and clear of any Lien and free of any other
limitation or restriction (including any restriction on the right to vote, sell
or otherwise dispose of such capital stock or other voting securities). There
are no outstanding (i) securities of Seller or any Acquired Subsidiary
convertible into or exchangeable for shares of capital stock or voting
securities of any Acquired Subsidiary or (ii) options or other rights to acquire
from Seller or any Acquired Subsidiary, or other obligation of Seller or any
Acquired Subsidiary to issue, any capital stock, voting securities or securities
convertible into or exchangeable for any capital stock or voting securities of
any Acquired Subsidiary (the items in clauses 3.06(b)(i) and 3.06(b)(ii) being
referred to collectively as the "ACQUIRED SUBSIDIARY SECURITIES"). There are no
outstanding obligations of Seller or any Acquired Subsidiary to repurchase,
redeem or otherwise acquire any outstanding Acquired Subsidiary Securities.
(c Except as set forth on Schedule 3.06(c), none of the Acquired
Subsidiaries owns, directly or indirectly, any interest or investment in any
corporation, company, partnership, joint venture, trust or other entity.
SECTION 3.7. MATERIAL CONTRACTS. (a Except as disclosed in Schedule
3.07, with respect to the Business, neither Seller nor any Acquired Subsidiary
is a party to or bound by:
(i any lease (whether of real or personal property) providing
for annual rentals of $250,000 or more that cannot be terminated on not
more than 60 days' notice without payment by Seller or any Acquired
Subsidiary of a penalty in excess of $200,000;
(ii any agreement for the purchase of materials, supplies,
goods, services, equipment or other assets providing for annual
payments by Seller or any Acquired Subsidiary of $500,000 or more that
cannot be terminated on not more than 60 days' notice without payment
by Seller or any Acquired Subsidiary of a penalty in excess of
$100,000;
(iii any sales, distribution or other similar agreement
providing for the sale by Seller or any Acquired Subsidiary of
materials, supplies,
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goods, services, equipment or other assets that provides for annual
payments to Seller or any Acquired Subsidiary of $350,000 or more;
(iv any partnership, joint venture or other similar agreement
or arrangement;
(v any agreement relating to the acquisition or disposition of
any business (whether by merger, sale of stock, sale of assets or
otherwise);
(vi any agreement relating to indebtedness for borrowed money
that will be outstanding as of the Closing, except trade payables
incurred in the ordinary course of business;
(vii any agreement that limits in any material respect the
freedom of any Acquired Subsidiary to compete in any line of business
or with any Person or in any area;
(viii any material agreement with or for the benefit of any
Affiliate of Seller (other than the Acquired Subsidiaries) or any
director or officer of Seller or any Acquired Subsidiary, other than
agreements that will not survive the Closing Date and for which neither
any Acquired Subsidiary nor Buyer or any Buyer Designee will have any
liability following the Closing; or
(ix any other agreement, commitment, arrangement or plan not
made in the ordinary course of business that is material to the
Business.
(b Each contract, agreement or arrangement required to be disclosed
pursuant to this Section 3.07 a valid and binding agreement of Seller or an
Acquired Subsidiary and is in full force and effect. Neither Seller nor any
Seller Designee or any Acquired Subsidiary is in default in any material respect
under the terms of any such contract, agreement or arrangement. To the knowledge
of Seller, no party thereto (other than Seller or any Seller Designee or any
Acquired Subsidiary) is in default or breach in any material respect under the
terms of any such contract, agreement or arrangement.
(c Neither Seller nor any Acquired Subsidiary or Seller Designee is in
breach in any material respect under the terms of any contract, agreement or
arrangement required to be disclosed pursuant to this Section 3.07, except for
such defaults or breaches that could not reasonably be expected to have a
Material Adverse Effect.
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SECTION 3.8. LITIGATION. (a Except as set forth on Schedule 3.08(a),
there is no action, suit, investigation or proceeding pending against the
Business before any court or arbitrator or any governmental body, agency or
official which could reasonably be expected to have a Material Adverse Effect.
(b Except as set forth on Schedule 3.08(b), to Seller's knowledge,
there is no action, suit, investigation or proceeding threatened against the
Business before any court or arbitrator or any governmental body, agency or
official which could reasonably be expected to result in a material adverse
judgment against any Acquired Subsidiary or which in any manner challenges or
seeks to prevent, enjoin, alter or materially delay the transactions
contemplated by this Agreement.
SECTION 3.9. COMPLIANCE WITH LAWS AND COURT ORDERS. Neither Seller nor
any Acquired Subsidiary is in violation in any material respect of any law,
rule, regulation, judgment, injunction, order or decree applicable to the
Purchased Assets or the conduct of the Business.
SECTION 3.10. REAL PROPERTY. (a Schedule 3.10 describes all real
property used or held for use primarily in the Business which Seller, directly
or indirectly, owns, leases, operates or subleases (the "REAL PROPERTY").
(b Seller or an Acquired Subsidiary has good title to, or in the case
of any leased Real Property has valid leasehold interests in, all Real Property,
except where the failure to have such good title or valid leasehold interests
would not materially impair the value or materially interfere with the present
use of such Real Property. There are no events or circumstances affecting any of
the Real Property pending or, to the knowledge of Seller threatened, which could
reasonably be expected to materially impair the value or materially interfere
with the present use of such Real Property. Except as set forth on Schedule
3.10, all leases of Real Property are in good standing and are valid, binding
and enforceable in accordance with their respective terms. There does not exist
under any such lease any default or any event which with notice or lapse of time
or both would constitute a material default by Seller or an Acquired Subsidiary
thereunder. No Real Property is subject to any Lien, except:
(i Liens disclosed on Schedule 3.10;
(ii Liens for taxes, assessments and similar charges that are
not yet due or are being contested in good faith;
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(iii mechanic's, materialman's, carrier's, repairer's and
other similar Liens arising or incurred in the ordinary course of
business or that are not yet due and payable or are being contested in
good faith;
(iv other Liens which would not individually or in the
aggregate materially interfere with the present use of the Real
Property or materially detract from its value (clauses (i) - (iv) of
this Section 3.10(b) are, collectively, the "PERMITTED LIENS").
SECTION 3.11. INTELLECTUAL PROPERTY. (a Except as set forth in Schedule
3.11 and except for any licenses (including those in commercially available "off
the shelf" software), Seller or an Affiliate of Seller solely owns (or in the
case of licenses, including those in commercially available "off the shelf"
software, has the non-exclusive right to use), free and clear of any lien or
other encumbrance or restriction (except in the case of licenses, any lien or
other encumbrance or restriction arising from the terms of the license itself),
all of the Business Intellectual Property Rights. "BUSINESS INTELLECTUAL
PROPERTY RIGHTS" shall mean all Intellectual Property Rights owned or licensed
(where permitted) by Seller or any Affiliate of Seller and primarily used in the
conduct of the Business, and all goodwill associated therewith.
(b Schedule 3.11 hereto sets forth a complete and correct list of all
material Business Intellectual Property Rights and their respective legal
status, including (i) the nature of such Business Intellectual Property Right,
(ii) the owner of such Business Intellectual Property Right, (iii) the
jurisdictions by or in which such Business Intellectual Property Right (A) is
recognized (without regard to registration) or (B) has been issued or registered
or in which an application for such issuance or registration has been filed,
(iv) the registration or application numbers, and (v) whether such Business
Intellectual Property Right is the subject of a license (but only to the extent
that such licenses are not already disclosed on Schedule 3.11). Except as set
forth on Schedule 3.11 hereto, Seller and/or its Affiliates have made all
necessary filings and recordations to protect and maintain their interest in all
patents, patent applications, trademark and service mark registrations,
trademark and service mark applications, copyright registrations and copyright
applications and licenses included in the Business Intellectual Property Rights.
(c Except as set forth in Schedule 3.11, there is no claim of any
person pertaining to, or any proceeding pending or, to Seller's knowledge,
threatened, which challenges the exclusive rights of Seller or any of its
Affiliates in respect of the Business Intellectual Property Rights, or which
relates to the Intellectual Property Rights of a third party and arises out of
any use, reproduction or
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distribution in connection with the Business of such third-party Intellectual
Property Rights by Seller or any of its Affiliates. Except as set forth on
Schedule 3.11, none of the Business Intellectual Property Rights is subject to
any outstanding order, ruling, decree, judgment or stipulation by or with any
court, arbitrator or administrative agency. Except as set forth on Schedule
3.11, all products manufactured, distributed, licensed and/or sold by Seller and
its Affiliates and any products proposed for manufacture, distribution,
licensing or sale in connection with the Business do not infringe any
Intellectual Property Rights held, owned or used by any third party as of the
Closing Date and, to Seller's knowledge, none of the Business Intellectual
Property Rights is being infringed upon by others, whether or not such use
constitutes infringement, or has been the subject of dispute, whether or not
resulting in litigation, except for orders, rulings, decrees, judgments,
stipulations, alleged infringements or disputes set forth in Schedule 3.11
hereto.
(d) Except as set forth in Schedule 3.11: (i) each patent, patent
application, trademark or service mark registration, trademark or service mark
application, copyright registration and copyright application of Seller and/or
each of its Affiliates included in the Business Intellectual Property Rights is
valid and subsisting and (ii) each material license of Business Intellectual
Property Rights is valid, subsisting and enforceable.
(e) Except as set forth in Schedule 3.11, there are no material
agreements relating to any Business Intellectual Property Right which require
consents of any third party in connection with the consummation of the
transactions contemplated by this Agreement. Except as set forth in Schedule
3.11, neither the execution, delivery and performance of this Agreement by
Seller nor the consummation of the transactions contemplated hereby by Seller or
any Affiliate of Seller will (i) require Seller or any Affiliate of Seller to
obtain any other consent or approval of or by any other contracting party with
respect to any material Business Intellectual Property Right; or (ii) result in
a material breach or violation of or a material default (or give rise to any
right of termination or a claim for injunctive relief) under any of the terms,
conditions or provisions of any material contract relating to Business
Intellectual Property Rights.
SECTION 3.12. INSURANCE COVERAGE. Seller has made available to Buyer a
list of, and true and complete copies of, all insurance policies and fidelity
bonds relating to the Purchased Assets. Except as set forth on Schedule 3.12,
there are no material claims by Seller or any Acquired Subsidiary pending under
any of such policies or bonds as to which coverage has been questioned, denied
or disputed by the underwriters of such policies or bonds or in respect of which
such underwriters have reserved their rights. To Seller's knowledge, Seller has
not
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suffered the involuntary cancellation of any existing insurance, in each case,
with respect to the Business in the past five years.
SECTION 3.13. FINDERS' FEES. Except for Morgan Stanley & Co.
Incorporated, whose fees will be paid by Seller, there is no investment banker,
broker, finder or other intermediary which has been retained by or is authorized
to act on behalf of Seller who might be entitled to any fee or commission in
connection with the transactions contemplated by this Agreement.
SECTION 3.14. EMPLOYEES. Schedule 3.14 sets forth a true and complete
list of (a) the names, titles, service dates, annual salaries and other
compensation of all Business Employees whose annual base salary exceeds $100,000
(or, in the case of an Other Business Employee, an amount equivalent to $100,000
in such person's local currency), and (b) a list of the total number of Business
Employees by location, including status as a temporary or regular, salaried,
direct or indirect. "BUSINESS EMPLOYEES" means persons employed by Seller or any
Acquired Subsidiary (including such persons on a leave of absence, but expressly
excluding those persons on long-term disability) primarily in connection with
the Business in the United States ("U.S. BUSINESS EMPLOYEES") and outside of the
United States ("OTHER BUSINESS EMPLOYEES"), other than Excluded Employees.
SECTION 3.15. EMPLOYEE BENEFIT PLANS. (a) Schedule 3.15 identifies each
Employee Plan and International Plan. Seller has delivered or made available to
Buyer copies of the Employee Plans or, with respect to the International Plans,
will make available within 15 days after the date hereof, copies of all
International Plans, including any communications to plan participants that are
materially inconsistent with such plans and all amendments thereto together
with, to the extent relevant and required, the most recent annual report (Form
5500 including, if applicable, Schedule B thereto) the most recent actuarial
valuation report prepared in connection with any Employee Plan and International
Plan, the most recent summary plan descriptions for such Plans, and, if
applicable, the most recent trust, custody, administrative services or insurance
or investment management agreement (including policies) with respect to each
Plan.
(b) Neither Seller nor any ERISA Affiliate of Seller has (i) engaged
in, or, to the knowledge of Seller, is a successor or parent corporation to an
entity that has engaged in, a transaction described in Sections 4069 or 4212(c)
of ERISA or (ii) incurred, or reasonably expects to incur prior to the Closing
Date, (A) any liability under Title IV of ERISA arising in connection with the
termination of, or a complete or partial withdrawal from, any plan covered or
previously covered by Title IV of ERISA or (B) any liability under Section 4971
of the Code that in either case could become a liability of Buyer or any of its
ERISA Affiliates after
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the Closing Date. None of the Acquired Subsidiaries has engaged in any
transaction that could result in a material tax or penalty to such Acquired
Subsidiary under Section 4975 of the Code.
(c) Each Employee Plan that is intended to be qualified under Section
401(a) of the Code has been determined by the Internal Revenue Service to be so
qualified and, to the knowledge of Seller, there has been no event since the
date of such determination which would adversely affect such qualification; each
trust created under any such Employee Plan has been determined by the Internal
Revenue Service to be exempt from tax under Section 501(a) of the Code and, to
the knowledge of Seller, there has been no event since the date of such
exemption which would adversely affect such exemption. Seller has made available
to Buyer copies of the most recent Internal Revenue Service determination
letters relating to each such Employee Plan. Each Employee Plan has been
maintained in substantial compliance with its terms and with the requirements
prescribed by any and all applicable statutes, orders, rules and regulations,
including but not limited to ERISA and the Code, and may according to their
terms be amended or terminated at any time subject to applicable law. Seller is
not in any material respect in default or violation of the terms of any Employee
Plan or International Plan.
Each Employee Plan that is an "employee pension benefit plan" as
defined in Section 3(2) of ERISA:
(i) is not, except as provided in Schedule 3.15, subject to
Title IV of ERISA or to the minimum funding requirements of Section 412
of the Code or Part 3 of Title I of ERISA nor is it a "multiemployer"
plan under within the meaning of Section 4001(a)(3) of ERISA;
(ii) is a plan to which all material contributions required to
be made (pursuant to the terms of such plan, Section 412 of the Code,
any Collective Bargaining Agreement or otherwise pursuant to applicable
law) have been made on or before their due dates (including any
extensions thereof);
(iii) has had no "reportable event" within the meaning of
Section 4043 of ERISA (excluding any such event for which the 30-day
notice requirement has been waived under the regulations to Section
4043 of ERISA) for which there is any material outstanding liability to
any Acquired Subsidiary or any ERISA Affiliate nor would the
consummation of the transactions contemplated hereby (including the
execution of this
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Agreement) constitute a reportable event for which the 30-day
requirement has not been waived;
(iv) has not incurred within the past two years, nor
reasonably expects to incur any material liability under Title IV of
ERISA including, without limitation, with respect to an event described
in Section 4062, 4063 or 4041 of ERISA (other than liability for
premium payments to the Pension Benefit Guaranty Corporation (the
"PBGC") arising in the ordinary course);
(v) does not give rise to any obligation to pay any amount
that would be treated as a "parachute payment" as defined in Section
280G of the Code.
(d) With respect to any Benefit Plan where the principal employer or
any associated employer is a selling company established or registered in the
United Kingdom ("UK PENSION SCHEMES"):
(i) save pursuant to the UK Pension Schemes, the Seller or
selling companies are under no obligation or commitment nor are party
to any custom or practice to pay, provide or contribute towards the
provision of any relevant benefits within the meaning of Section 612 of
the Income & Corporation Taxes Act of 1988 (the "TAXES ACT") or any
other death, retirement, sickness or disability benefits to or in
respect of any employee and have not at any time participated in or
contributed towards any scheme or arrangement which has as its purpose
or one of its purposes the provision of any such benefits (other than
schemes which have been fully and effectively wound up);
(ii) Seller and all Controlled Group Members have not made or
proposed and before all Closing Dates will not make or propose any
voluntary or ex gratia payments to any person in the UK in respect of
any benefit referred to in 2.23(h)(i) of these warranties;
(iii) the UK Pension Schemes are exempt-approved schemes
within the meaning of Chapter I of Part XIV of the Taxes Act, and there
is in force in respect of the Pension Scheme an appropriate
contracting-out certificate (within the meaning of Section 7 of the
Pension Schemes Act 1993) naming the relevant Acquired Subsidiary and
to Seller's best knowledge nothing has been done or omitted to be done
which will or may result in the UK Pension Schemes ceasing to be exempt
approved or the
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contracting-out certificate for the Pension Scheme being cancelled,
surrendered or varied;
(iv) all amounts due from any Controlled Group Member to the
trustees of each UK Pension Scheme and to any insurance company in
connection with the Pension Scheme have been paid; and
(v) all lump sum benefits (other than a refund of
contributions with interest where appropriate) payable under the UK
Pension Schemes on the death of a member or beneficiary while in an
employment to which the UK Pension Schemes relate are fully insured
under a policy effected in the name of the trustees of the relevant UK
Pension Scheme.
(e) Except as set forth in Schedule 3.15, Seller has no current or
projected liability in respect of post-employment or post-retirement health or
medical or life insurance benefits for retired, former or current Business
Employees, except as required to avoid excise tax under Section 4980B of the
Code.
(f) There are no pending or, to Seller's knowledge, threatened claims
or investigations with respect to any Employee Plan or International Plan (other
than routine claims for benefits).
SECTION 3.16. LABOR MATTERS. (a) Schedule 3.16 sets forth all
collective bargaining agreements, works council agreements or other labor union
contracts covering Business Employees (each a "COLLECTIVE BARGAINING
AGREEMENT").
(b) Except as set forth on Schedule 3.16, (i) there are no material
controversies pending or, to Seller's knowledge, threatened between any Acquired
Subsidiary and any of their respective employees; (ii) Seller and the Acquired
Subsidiaries are in compliance in all material respects with all currently
applicable laws respecting employment and employment practices with respect to
employees of the Business; (iii) neither Seller (with respect to the Business)
nor any Acquired Subsidiary is in breach in any material respect of any
Collective Bargaining Agreement, or (iv) to Seller's knowledge, there are no
material strikes, slowdowns, work stoppages, lockouts or threats thereof, by or
with respect to any Business Employees.
SECTION 3.17. ENVIRONMENTAL COMPLIANCE. (a) Except as disclosed on
Schedule 11.02(c) with respect to the Business:
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(i) no written notice, request for information, order,
complaint or penalty has been received, and there are no judicial,
administrative or other actions, suits or proceedings pending or, to
the knowledge of Seller, threatened which allege a material violation
of any Environmental Law;
(ii) Seller has obtained or caused to be obtained all material
environmental permits necessary for the operation of the Business as
currently operated to comply with all applicable Environmental Laws and
Seller is in compliance with the terms of such permits and other
applicable Environmental Laws;
(iii) there has been no written environmental audit conducted
within the past five years by Seller of any Purchased Asset which has
not been delivered to Buyer prior to the date hereof; and
(iv) to Seller's knowledge, neither Seller nor any Acquired
Subsidiary has been identified as a potentially responsible party at
any federal or state National Priorities List site.
(b) To Seller's knowledge, except as disclosed on Schedule 11.02(c),
there are no Environmental Liabilities.
Except as set forth in Section 3.08, 3.09 or this Section 3.17, no
representations or warranties are being made with respect to any environmental
matters.
SECTION 3.18. SUFFICIENCY OF ASSETS; PERSONAL PROPERTY. (a) At the
Closing Date, the Purchased Assets will constitute all of the property and
assets of Seller and its subsidiaries used or held for use primarily in the
Business and will, together with the rights available to Buyer and its
Affiliates under the Transition Services Agreement and under Section 7.07, be
adequate and sufficient in all material respects to conduct the Business as
currently conducted. Except as set forth in Schedule 3.18 hereto and except for
any Purchased Assets that will be transferred directly to Buyer or a Buyer
Designee by Seller or a Seller Designee upon Closing, Seller or an Acquired
Subsidiary or a Seller Designee, as the case may be, has or will have at the
Closing (a) good and valid title to all of the material personal property used
in the Business, including, without limitation, the personal property acquired
after the date of this Agreement (except for inventories and other assets sold
or otherwise disposed of in the ordinary course of business or otherwise in
accordance with the provisions of this Agreement).
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(b) Except as set forth on Schedule 3.18 hereto, the material personal
property included in the Purchased Assets is maintained in all material respects
in good operating condition, reasonable wear and tear excepted, for the purposes
for which it is currently being used.
SECTION 3.19. POWERS OF ATTORNEY. There are no powers of attorney
executed on behalf of any of the Acquired Subsidiaries other than those listed
in Schedule 3.19.
SECTION 3.20. GUARANTIES. None of the Acquired Subsidiaries is a
guarantor for any liability or obligation (including indebtedness) of any third
party (except another Acquired Subsidiary), other than in the ordinary course of
business consistent with past practice.
SECTION 3.21. NOTES AND ACCOUNTS RECEIVABLE. All notes and accounts
receivable of the Business arose in the ordinary course of business.
SECTION 3.22. RESTRICTIONS ON BUSINESS ACTIVITIES. Except for this
Agreement or as set forth in Schedule 3.22 hereto, to Seller's knowledge, with
respect to the Business, there is no agreement, judgment, injunction, order or
decree binding upon Seller or any of the Acquired Subsidiaries, which has or
could reasonably be expected to have the effect of materially prohibiting or
impairing any business practice of Seller or any of the Acquired Subsidiaries,
acquisition of property by Seller or any of the Acquired Subsidiaries, or the
conduct of the Business by Seller or any of the Acquired Subsidiaries as
currently conducted by Seller or any of the Acquired Subsidiaries.
SECTION 3.23. PRODUCT LIABILITY AND RECALL. (a) Except as set forth in
Schedule 3.23 hereto, there is no action, suit, claim or proceeding by or before
any court or governmental body pending against or involving the Business
relating to any product designed, manufactured or sold by the Business and
alleged to have been defective or improperly designed or manufactured that, if
determined adversely to the Business, would reasonably be expected to have a
Material Adverse Effect.
(b) Except as set forth on Schedule 3.23 hereto, to Seller's knowledge,
there is no action, suit, claim or proceeding threatened against the Business
relating to any product designed, manufactured or sold by the Business and
alleged to have been defective or improperly designed or manufactured.
(c) Except as set forth in Schedule 3.23 hereto, there is no pending,
or to Seller's knowledge, threatened recall or investigation of any product sold
by Seller in connection with the Business.
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SECTION 3.24. PRODUCT WARRANTY. Except as may arise under applicable
law, no product manufactured, sold or delivered by the Business is subject to
any guaranty, warranty, or other indemnity materially beyond the standard terms
and conditions of sale offered by the Business, true and complete copies of
which have been previously provided to Buyer.
SECTION 3.25. UNDISCLOSED LIABILITIES. To Seller's knowledge, neither
Seller nor any Acquired Subsidiary has any liabilities, whether accrued,
absolute, contingent or otherwise, which are material to the Business taken as a
whole, except (i) liabilities or obligations incurred in the ordinary course of
business, (ii) liabilities or obligations disclosed in this Agreement or any
Schedule hereto, or (iii) Excluded Liabilities.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as of the date hereof and as of
the Closing Date that:
SECTION 4.1. CORPORATE EXISTENCE AND POWER. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of Luxembourg
and has all corporate powers and all material governmental licenses,
authorizations, permits, consents and approvals required to carry on its
business as now conducted.
SECTION 4.2. CORPORATE AUTHORIZATION. The execution, delivery and
performance by Buyer of this Agreement and the consummation of the transactions
contemplated hereby are within the corporate powers of Buyer and have been duly
authorized by all necessary corporate action on the part of Buyer. This
Agreement constitutes a valid and binding agreement of Buyer.
SECTION 4.3. GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by Buyer of this Agreement and the consummation of the transactions
contemplated hereby require no material action by or in respect of, or material
filing with, any governmental body, agency or official other than compliance
with any applicable requirements of the HSR Act and any other applicable
antitrust, competition or merger control laws in any jurisdiction.
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SECTION 4.4. NONCONTRAVENTION. The execution, delivery and performance
by Buyer of this Agreement and the consummation of the transactions contemplated
hereby by Buyer and any Buyer Designee do not and will not (i) violate the
certificate of incorporation or bylaws of Buyer, (ii) assuming compliance with
the matters referred to in Section 4.03, violate in any material respect any
applicable law, rule, regulation, judgment, injunction, order or decree, (iii)
require any consent or other action by any Person under, constitute a material
default under or give rise to any right of termination, cancellation or
acceleration of any material right or obligation or to a loss of any material
benefit under any provision of any material agreement or other instrument
binding upon Buyer or (iv) result in the creation or imposition of any Lien on
any material asset of Buyer.
SECTION 4.5. FINANCING. Buyer has sufficient cash, available lines of
credit or other sources of immediately available funds to enable it to make
payment of the Purchase Price and any other amounts to be paid by it hereunder.
SECTION 4.6. LITIGATION. There is no action, suit, investigation or
proceeding pending against, or to the knowledge of Buyer threatened against or
affecting, Buyer before any court or arbitrator or any governmental body, agency
or official which in any manner challenges or seeks to prevent, enjoin, alter or
materially delay the transactions contemplated by this Agreement.
SECTION 4.7. FINDERS' FEES. There is no investment banker, broker,
finder or other intermediary which has been retained by or is authorized to act
on behalf of Buyer who might be entitled to any fee or commission from Seller or
any of its Affiliates upon consummation of the transactions contemplated by this
Agreement.
SECTION 4.8. NO OTHER REPRESENTATIONS. Buyer agrees to accept the
Purchased Assets and the Business without reliance upon any express or implied
representations or warranties of any nature made by or on behalf of or imputed
to Seller, except as expressly set forth in this Agreement.
ARTICLE 5
COVENANTS OF SELLER
Seller agrees that:
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SECTION 5.1. CONDUCT OF THE BUSINESS. Except as described on Schedule
5.01, from the date hereof until the Closing Date, Seller shall conduct the
Business in the ordinary course consistent with past practice and shall use its
reasonable best efforts to preserve intact the business organizations and
relationships with third parties and to keep available the services of current
Business Employees. Without limiting the generality of the foregoing, from the
date hereof until the Closing Date, except as may be required in connection with
the Reorganization or as otherwise disclosed on Schedule 5.01, Seller will not,
without the prior consent of Buyer, with respect to the Business:
(a) voluntarily incur or permit to be incurred any obligation
or other liabilities (exclusive of health and property insurance
premiums) not covered by any other provision of this Section 5.01 in
excess of $250,000, except for inventory purchases in the ordinary
course of business consistent with past practice;
(b) sell, lease, license or otherwise dispose of any Purchased
Assets, except (i) pursuant to existing contracts or commitments or
(ii) otherwise in the ordinary course of business consistent with past
practice;
(c) take any action that would make any representation or
warranty of Seller hereunder inaccurate in any material respect at the
Closing Date such that the closing condition set forth in Section
10.02(a)(ii) shall not be satisfied as of such date; or
(d) increase the compensation payable or to become payable to
any of the employees of the Business, except for increases in the
ordinary course and consistent with past practice, or otherwise enter
into or alter any employment, consulting, or service agreement, except
in the ordinary course of business consistent with past practice, or
enter into any retention agreements or agreements for enhanced or
extraordinary severance with any Business Employees other than at the
request of Buyer;
(e) commence, enter into, or alter any profit sharing,
deferred compensation, bonus, stock option, stock purchase, pension,
retirement, or incentive plan or any fringe benefit plan for employees
of the Business, except in the ordinary course of business consistent
with past practice;
(f) voluntarily permit to be incurred any lien or encumbrance
on any material Purchased Assets which would materially impair the
value or materially interfere with the present use of such Purchased
Assets;
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(g) sever or terminate any employees of the Business except
for cause or in the ordinary course of business;
(h) make or commit to any capital expenditures in excess of
$250,000 individually or $1,000,000 in the aggregate;
(i) make any tax election or settle or compromise any Tax
liability without the prior consent of Buyer, which consent shall not
be unreasonably withheld;
(j) change any of the organizational documents of the Acquired
Subsidiaries;
(k) issue, pledge, dispose or encumber, or authorize the
issuance, sale, pledge, disposition or encumbrance of, any shares of
capital stock of any class, or any options, warrants, convertible
securities or other rights of any kind to acquire any shares of capital
stock of, or any other ownership interest in any of the Acquired
Subsidiaries; or
(l) agree or commit to do any of the foregoing.
SECTION 5.2. ACCESS TO INFORMATION; CONFIDENTIALITY. (a) From the date
hereof until the Closing Date, Seller will (i) give Buyer, its counsel,
financial advisors, auditors and other authorized representatives reasonable
access to the offices, properties, books and records of Seller relating to the
Business, (ii) furnish to Buyer, its counsel, financial advisors, auditors and
other authorized representatives such financial and operating data and other
information relating to the Business as such Persons may reasonably request and
(iii) instruct Business Employees and counsel and financial advisors of Seller
to cooperate with Buyer in its investigation of the Business. Any investigation
pursuant to this Section shall be conducted in such manner as not to interfere
unreasonably with the conduct of the business of Seller. Notwithstanding the
foregoing, Buyer shall not have access to personnel records of Seller relating
to individual performance or evaluation records, medical histories or other
information which in Seller's good faith opinion is sensitive or the disclosure
of which could subject Seller to risk of liability.
(b) On and after the Closing Date, Seller will afford promptly to
Buyer and its agents reasonable access to its books of account, financial and
other records (including, without limitation, accountant's work papers),
information, employees and auditors to the extent necessary or useful for Buyer
in connection with any audit, investigation, dispute or litigation or any other
reasonable business
27
purpose relating to the Business; PROVIDED that any such access by Buyer shall
not unreasonably interfere with the conduct of the business of Seller. Buyer
shall bear all of the out-of-pocket costs and expenses (including, without
limitation, attorneys' fees, but excluding reimbursement for general overhead,
salaries and employee benefits) reasonably incurred in connection with the
foregoing.
SECTION 5.3. NOTICES OF CERTAIN EVENTS. Seller shall promptly notify
Buyer of:
(a) any notice or other communication from any Person alleging
that the consent of such Person is or may be required in connection
with the transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement; and
(c) any actions, suits, claims, investigations or proceedings
commenced relating to Seller or the Business that, if pending on the
date of this Agreement, would have been required to have been disclosed
pursuant to Section 3.08.
SECTION 5.4. RESIGNATIONS. At or prior to the Closing Date, Seller will
deliver to Buyer the resignations of all directors of each Acquired Subsidiary
who will be directors, officers or employees of Seller or any of its Affiliates
after the Closing Date.
SECTION 5.5. NON-COMPETITION AGREEMENT. (a) Seller agrees that, as part
of the consideration for the payment by Buyer of the Purchase Price, for a
period of five (5) years immediately following the Closing Date, neither Seller
nor any of its Affiliates will, directly or indirectly, operate, perform, have
any interest in or otherwise be engaged in a business which competes with the
Business as it exists on the Closing Date. For these purposes, ownership of
securities of a company whose securities are publicly traded on a recognized
securities exchange or quotation system not in excess of five percent (5%) of
any class of such securities shall not be considered to be competition with the
Business.
(b) Further, Seller agrees that for a period of five (5) years
following the Closing Date, neither Seller nor any of its controlled Affiliates
will solicit the employment of any of Seller's employees hired by Buyer on the
Closing Date; PROVIDED, that this Section 5.05(b) shall not prohibit any general
solicitation or advertising activities not targeted to any such employee
described in this Section
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5.05(b), and PROVIDED FURTHER, that this Section 5.05(b) shall not apply to any
individual whose employment is terminated by Buyer or any Affiliate of Buyer.
(c) Seller acknowledges that the restrictions on its activities under
Sections 5.05(a) and (b) hereof constitute a material inducement to Buyer's
entering into and performing this Agreement. Seller further acknowledges,
stipulates and agrees that a breach of any of such obligations and agreements
will result in irreparable harm and continuing damage to Buyer for which there
will be no adequate remedy at law and further agrees that in the event of any
breach of said obligations and agreements, Buyer and its successors and assigns
will be entitled to injunctive relief and to such other relief as is proper
under the circumstances.
(d) Notwithstanding anything in this Section 5.05 to the contrary,
nothing herein shall prevent Seller or any of its Affiliates from purchasing or
otherwise acquiring a diversified company (an "ACQUIRED BUSINESS") if not more
than 5% of the sales of such Acquired Business (based on its most recent annual
financial statements) are derived from activities that compete with the Business
as it exists on the Closing Date (such part of the Acquired Business, the
"COMPETING BUSINESS"); PROVIDED, that Seller or its Affiliates shall contact
Buyer within 30 days after the acquisition of such Acquired Business and offer
Buyer the opportunity of negotiating in good faith the purchase of the Competing
Business. In the event that Buyer and Seller, acting in good faith, fail to
agree on the terms of a sale transaction and are unable to enter into a
definitive agreement for the sale of the Competing Business after a period of
ninety (90) days following Seller's notification to Buyer, the provisions of
Section 5.05(a) shall not apply to such Competing Business and Seller shall be
able to retain such Competing Business without any further obligation to Buyer
under this Section 5.05 with respect to such Competing Business.
(e) Whenever possible, each provision and term of this Section 5.05
shall be interpreted in a manner to be effective and valid but if any provision
or term of this Section 5.05 is held to be prohibited or invalid, then such
provision or term will be ineffective only to the extent of such prohibition or
invalidity, without invalidating or affecting in any manner whatsoever the
remainder of such provision or term or the remaining provisions or terms of this
Section 5.05. If any of the covenants set forth in Sections 5.05(a) or 5.05(b)
hereof are held to be unreasonable, arbitrary, or against public policy, such
covenants will be considered divisible with respect to scope, time, and
geographic area, and in such lesser scope, time and geographic area, will be
effective, binding and enforceable against Seller.
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SECTION 5.6. BANK ACCOUNTS; SAFE DEPOSIT BOXES. Prior to the Closing
Date, Seller will deliver to Buyer a complete list of each account with any
bank, trust company, securities broker or other financial institution with which
any of the Acquired Subsidiaries has any account and all safe deposit boxes
maintained by any of such Acquired Subsidiaries, the identifying numbers or
symbols thereof, and the name of each person authorized to draw thereon or to
have access thereto.
SECTION 5.7. DIVIDENDS. Seller shall notify Buyer no less than 48 hours
prior to the payment of any dividends or other distributions or payments in
respect of the capital stock of any of the Acquired Subsidiaries.
SECTION 5.8. CERTAIN SECURITY INTERESTS. In the event that any security
interests held by any Person in any accounts receivable or notes receivable
included in the Purchased Assets have not been obtained prior to the Closing,
Seller agrees to (i) use its reasonable best efforts to obtain the release of
such security interests as promptly as practicable after the Closing Date, and
(ii) indemnify and hold Buyer and its Affiliates harmless against any and all
liability, costs and expenses arising from the existence of such security
interests after the Closing.
ARTICLE 6
COVENANTS OF BUYER
Buyer agrees that:
SECTION 6.1. CONFIDENTIALITY. Prior to the Closing Date and after any
termination of this Agreement, Buyer and its Affiliates will hold, and will use
their best efforts to cause their respective officers, directors, employees,
accountants, counsel, consultants, advisors and agents to hold, in confidence,
unless compelled to disclose by judicial or administrative process or by other
requirements of law, all confidential documents and information concerning the
Business or Seller furnished to Buyer or its Affiliates in connection with the
transactions contemplated by this Agreement, except to the extent that such
information can be shown to have been (i) previously known on a nonconfidential
basis by Buyer, (ii) in the public domain through no fault of Buyer or (iii)
later lawfully acquired by Buyer from sources other than Seller; PROVIDED that
Buyer may disclose such information to its officers, directors, employees,
accountants, counsel, consultants, advisors and agents in connection with the
transactions contemplated by this Agreement so long as such Persons are informed
by Buyer
30
of the confidential nature of such information and are directed by Buyer to
treat such information confidentially. Buyer shall be responsible for any
failure to treat such information confidentially by such Persons. The obligation
of Buyer and its Affiliates to hold any such information in confidence shall be
satisfied if they exercise the same care with respect to such information as
they would take to preserve the confidentiality of their own similar information
but, in no event shall Buyer or its Affiliates exercise less than a reasonable
degree of care. If this Agreement is terminated, Buyer and its Affiliates will,
and will use their best efforts to cause their respective officers, directors,
employees, accountants, counsel, consultants, advisors and agents to, destroy or
deliver to Seller, upon request, all documents and other materials, and all
copies thereof, obtained by Buyer or its Affiliates or on their behalf from
Seller in connection with this Agreement that are subject to such confidence.
SECTION 6.2. ACCESS. On and after the Closing Date, Buyer will afford
promptly to Seller and its agents reasonable access to its properties, books,
records, employees and auditors to the extent necessary to permit Seller to
determine any matter relating to its rights and obligations hereunder or to any
period ending on or before the Closing Date; PROVIDED that any such access by
Seller shall not unreasonably interfere with the conduct of the business of
Buyer. Seller will hold, and will use its best efforts to cause its officers,
directors, employees, accountants, counsel, consultants, advisors and agents to
hold, in confidence, unless compelled to disclose by judicial or administrative
process or by other requirements of law, all confidential documents and
information concerning Buyer or the Business provided to it pursuant to this
Section.
SECTION 6.3. USE OF NAMES AND TRADEMARKS.
(a) Buyer and Seller Agree as follows:
(i) Within three (3) months after the Closing Date, Buyer
shall, and shall cause each of the Acquired Subsidiaries to, remove the
Seller Name and any other trademark, design or logo previously or
currently used by Seller or any of its subsidiaries that is not part of
the Business Intellectual Property Rights from all buildings, signs and
vehicles of the Business;
(ii) Within three (3) months after the Closing Date, Buyer
shall, and shall cause each of the Acquired Subsidiaries to, cease
using the Seller Name and any other trademark, design or logo
previously or currently used by Seller or any of its subsidiaries that
is not part of the Business Intellectual Property Rights in all
invoices, letterhead,
31
advertising and promotional materials, office forms, business cards,
electronics databases, web sites, product instructions, packaging
(except as provided below) and other materials, printed or otherwise
(all such materials, together with buildings, signs and vehicles of the
Business described in clause (i) above, "MARKED ASSETS").
Notwithstanding the foregoing, Buyer shall not be restricted in using
any packaging materials that are in inventory as of the Closing Date;
(iii) Within three (3) months after the Closing Date, Buyer
shall, and shall cause each of the Acquired Subsidiaries to, amend the
constituent documents of the Acquired Subsidiaries so as to remove any
reference to the Seller Name from their respective corporate names;
(iv) When such qualifications, certifications, licenses or
permits become renewable, Buyer shall, and shall cause each of the
Acquired Subsidiaries to, file amendments to all qualifications or
certifications to do business, governmental licenses and other similar
licenses or permits of the Acquired Subsidiaries so as remove any
reference to the Seller Name from such qualifications, certifications,
licenses and permits;
(v) Buyer shall not be required at any time to remove the
Seller Name and any other trademark, design or logo previously or
currently used by Seller that is not part of the Business Intellectual
Property Rights from inventory of the Business that is in existence as
of the Closing Date ("EXISTING INVENTORY"), nor shall Buyer be required
at any time to remove such Seller Name and any such other trademark,
design or logo from schematics, plans, manuals, drawings, machinery,
tooling including hand tools, and the like of the Business in existence
as of the Closing Date to the extent that such instrumentalities are
used in the ordinary internal conduct of the business and are not
generally observed by the public or are intended for use as means to
effectuate or enhance sales (such items, "MARKED INSTRUMENTALITIES").
Buyer shall use reasonable efforts to remove the Seller Name and any
other trademark, design or logo previously or currently used by Seller
that is not part of the Business Intellectual Property Rights from
those assets of the Business that are not Marked Assets or Existing
Inventory, including those assets (such as, but not limited to, tools,
molds, and machines) used in association with the manufacture of the
Products or otherwise reasonably used in the conduct of the Business
after the Closing Date (such assets, "OTHER MARKED ASSETS"). For the
purposes of this Section 6.03(a)(v), "Reasonable Efforts" means the
Buyer shall remove the Seller Name from such Other Marked Assets but
only at such time
32
when such asset is not operated or otherwise is taken out of service in
the normal course of business due to regular maintenance or repair (but
only for such repairs or maintenance where such removal could normally
be undertaken, for example, repair or maintenance of a mold cavity)
whichever occurs first; PROVIDED that, in no event shall Buyer use the
Seller Name after the date which is two (2) years from the Closing
Date. Buyer shall not be required to perform such removal on such Other
Marked Assets that are not or no longer used to manufacture the
Products or other parts, or if discontinuance of use of such Other
Marked Assets is reasonably anticipated during such time period. Buyer
agrees to provide assurances and notice to Seller as to its
undertakings under this Section 6.03(a)(v) in accordance with Section
7.01 and Section 7.06 hereof;
(vi) Seller shall not be required at any time to remove any
trademark, design or logo that is part of the Business Intellectual
Property Rights from the fiber optic and co-axial cable product lines
previously or currently (as of the Closing Date) sold by Seller in the
normal course of its business under a Business Intellectual Property
Right (for example, "AUGAT") or any inventory thereof (whether or not
in existence as of the Closing Date). Seller shall use reasonable
efforts to remove any such trademark, logo or design that is part of
the Business Intellectual Property Rights from such fiber optic and
co-axial cable product lines after the Closing Date. For purposes of
this Section 6.03(a)(vi), "Reasonable Efforts", means that Seller shall
diligently pursue the introduction and use of any trademark, design, or
logo that is not part of the Business Intellectual Property Right with
regard to fiber optic and co-axial cable product lines and shall
further contemporaneously and diligently pursue the discontinuance of
any such trademark, design or logo. Buyer and Seller recognize and
agree that concurrent use of such trademark, design or logo shall be
permissible between them, but in no event shall Seller use such
trademark, design or logo after the date which is two (2) years from
the Closing Date. Seller agrees to provide assurances and notice to
Buyer as to its undertakings under this Section 6.03(a)(vi) in
accordance with Section 7.01 and Section 7.06 hereof;
(vii) Seller hereby grants to Buyer a limited right to use
Seller's name and associated trademarks, designs and logos with regard
to the Marked Assets during the three month period specified in clauses
(i) - (iii) above. Seller further grants to Buyer a limited right to
use Seller's name and associated trademarks, designs and logos with
regard to the
33
Existing Inventory during such time period that Buyer requires to sell,
transfer, or otherwise dispose of the Existing Inventory; PROVIDED
that, in no event shall such time period exceed two (2) years from the
Closing Date. Seller hereby grants to Buyer a limited right to use
Seller's name and associated trademarks, designs and logos with regard
to the Marked Instrumentalities. Seller hereby grants to Buyer a
limited right to use Seller's name and associated trademarks, designs
and logos with regard to the Other Marked Assets during the time period
for which Buyer uses Reasonable Efforts described in clause (v) above;
PROVIDED that, in no event shall such time period exceed two (2) years
from the Closing Date. Seller further grants to Buyer a limited right
to use Seller's name and associated trademarks, designs and logos with
regard to any parts or Products produced by the operation of such Other
Marked Assets during such two year period; and
(viii) Buyer hereby grants to Seller a limited right to use any
trademark, design or logo that is part of the Business Intellectual
Property Rights with regard to the fiber optic and co-axial cable
product lines in accordance with this Section 6.03.
(b) Buyer hereby covenants and agrees that, except as otherwise
contemplated by this Agreement, it will not, and will cause its subsidiaries
(including, after the Closing Date, the Acquired Subsidiaries) not to, seek the
protection or registration of or employ any trademark, design or logo similar to
any of the Seller Names or any trademark, design or logo previously or currently
used by Seller or any of its subsidiaries that is not part of the Business
Intellectual Property Rights.
ARTICLE 7
COVENANTS OF BUYER AND SELLER
Buyer and Seller agree that:
SECTION 7.1. REASONABLE BEST EFFORTS; FURTHER ASSURANCES. Subject to
the terms and conditions of this Agreement, Buyer and Seller will use their
reasonable best efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary or desirable under applicable laws and
regulations to consummate the transactions contemplated by this Agreement.
Seller and Buyer agree to execute and deliver such other documents,
certificates, agreements
34
and other writings and to take such other actions as may be necessary or
desirable in order to consummate or implement expeditiously the transactions
contemplated by this Agreement and to vest in Buyer or one or more Buyer
Designees good title to the Purchased Assets.
SECTION 7.2. CERTAIN FILINGS. Seller and Buyer shall cooperate with one
another (i) in determining whether any action by or in respect of, or filing
with, any governmental body, agency, official or authority is required, or any
actions, consents, approvals or waivers are required to be obtained from parties
to any material contracts, in connection with the consummation of the
transactions contemplated by this Agreement and (ii) in taking such actions or
making any such filings, furnishing information required in connection therewith
and seeking timely to obtain any such actions, consents, approvals or waivers.
SECTION 7.3. PUBLIC ANNOUNCEMENTS. The parties agree to consult with
each other before issuing any press release or making any public statement with
respect to this Agreement or the transactions contemplated hereby and, except as
may be required by applicable law or any listing agreement with any national
securities exchange, will not issue any such press release or make any such
public statement prior to such consultation.
SECTION 7.4. WARN ACT. Buyer shall assume all obligations and
liabilities for the provision of notice or payment in lieu of notice or any
applicable penalties under the Worker Adjustment and Retraining Notification Act
(the "WARN ACT") or any similar state or local law arising as a result of any
employee termination covered by the WARN Act or any similar state or local law
following the Closing and for any liability resulting therefrom.
SECTION 7.5. TRANSITION SERVICES AGREEMENT. Prior to the Closing,
Seller and Buyer shall negotiate in good faith one or more transition services
agreements incorporating the terms and conditions set forth on Annex J attached
hereto.
SECTION 7.6. NOTICE OF OCCURRENCE OR NON-OCCURRENCE. Prior to the
Closing, each party hereto shall promptly give notice thereof to the other party
of the occurrence (or non-occurrence) of any event, circumstance or fact of
which it becomes aware arising subsequent to the date of this Agreement which
would result in a breach of any representation or warranty set forth in Article
3 and 4, as applicable; PROVIDED that the delivery of any notice pursuant to
this Section 7.06 shall not limit the remedies available under this Agreement.
SECTION 7.7. INTELLECTUAL PROPERTY LICENSES. Subject to the limitations
set forth in Section 6.03 hereof:
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(a) Seller, on behalf of itself and its Affiliates, hereby grants to
Buyer and its Affiliates, as of the Closing Date, a perpetual, paid-up,
royalty-free, nonexclusive license to manufacture, use and sell worldwide the
products and to provide the services which are made, used, sold or offered by
the Business as of the Closing Date under any patents, patent applications,
copyright registrations, copyright applications, maskwork registrations or
applications (except any patents, patent applications, copyright registrations,
copyright applications, maskwork registrations or applications which are
conveyed to Buyer or Buyer's Affiliates pursuant to this Agreement), owned as of
the Closing Date by Seller or any of its Affiliates, subject to any rights
previously granted to third parties.
(b) Buyer, on behalf of itself and its Affiliates, hereby grants to
Seller and its Affiliates a perpetual, paid-up, royalty-free, nonexclusive
license to manufacture, use and sell worldwide the products and to provide the
services which are made, used, sold or offered by Seller and its Affiliates
(excluding the Business) as of the Closing Date under any patents, patent
applications, copyright registrations, copyright applications, maskwork
registrations or applications, which are conveyed to Buyer or Buyer's Affiliates
pursuant to this Agreement, subject to any rights previously granted to third
parties.
(c) Seller, on behalf of itself and its Affiliates, hereby grants to
Buyer and its Affiliates, as of the Closing Date, a worldwide, perpetual,
paid-up, royalty-free, nonexclusive license to manufacture, use and sell the
products and to provide the services which are made, used, sold or offered by
the Business as of the Closing Date using any software, copyrights, trade
secrets, know-how, and technical information owned as of the Closing Date by
Seller or any of its Affiliates and which were originally obtained by the
Business from Seller or any of its Affiliates and are in the possession of the
Business at the Closing Date, subject to any rights previously granted to third
parties and to any continuing government restrictions.
(d) Buyer, on behalf of itself and its Affiliates, hereby grants to
Seller and its Affiliates a worldwide, perpetual, paid-up, royalty-free,
nonexclusive license to manufacture, use and sell the products and to provide
the services which are made, used, sold or offered by Seller and its Affiliates
(excluding the Business) as of the Closing Date using any software, copyrights,
trade secrets, know-how, and technical information which are in the possession
of Seller or any of its Affiliates at the Closing Date and are conveyed to Buyer
or Buyer's Affiliates pursuant to this Agreement, subject to any rights
previously granted to third parties and to any continuing government
restrictions.
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(e) It is understood and agreed that the licenses granted above in
this Section 7.07 do not include any right to use trademarks, service marks or
trade names, nor are such licenses transferable by Buyer or Seller, except in
the case of Buyer, in connection with the sale or other transfer of the Business
or part of the Business, or any of the Purchased Assets, in the case of Seller
and its Affiliates, in connection with the sale of any business using such
license.
SECTION 7.8. PRODUCT RECALL MATTERS. In the event that Buyer or any
Affiliate of Buyer incurs any liability or obligation arising out of a
third-party or first-party recall with respect to products of the Business which
is covered by insurance maintained or previously maintained by Seller or any of
its Affiliates, at the request of Buyer or its Affiliates, Seller shall use its
reasonable best efforts to pursue such claim under such insurance on behalf of
Buyer and to pay to Buyer any amounts recovered under such insurance with
respect to such liability or obligation of Buyer or an Affiliate of Buyer. Buyer
agrees to indemnify and hold harmless Seller and its Affiliates from any and all
damage, loss, liability and expense incurred or suffered by Seller or any of its
Affiliates in pursuing such claim, including, without limitation, attorneys'
fees and expenses, deductibles, self-insured retentions, and retroactive premium
adjustments.
ARTICLE 8
TAX MATTERS
SECTION 8.1. DEFINITIONS. The following terms, as used herein, have the
following meanings:
"CODE" means the United States Internal Revenue Code of 1986, as
amended, including the rules and regulations thereunder.
"COMBINED TAX" means any federal income tax or any income or franchise
tax payable to any state in which the Domestic Acquired Subsidiaries have filed
or will file a return with Seller on an affiliated, consolidated, combined or
unitary basis with respect to such Tax.
"PRE-CLOSING TAX PERIOD" means any Tax period ending on or before the
Closing Date; and, with respect to a Tax period that begins on or before the
Closing Date and ends thereafter, the portion of such Tax period ending on the
Closing Date.
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"SELLER GROUP" means, with respect to federal income taxes, the
affiliated group of corporations (as defined in Section 1504(a) of the Code) of
which Seller is a member and, with respect to any income or franchise Taxes, the
consolidated, combined or unitary group of which Seller or any of its Affiliates
is a member.
"SUBSIDIARY" means any entity of which securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at the time directly
or indirectly owned by any Acquiring Company.
"TAX" means (i) any tax, governmental fee or other like assessment or
charge of any kind whatsoever (including, but not limited to, estimated taxes
and withholding on amounts paid to or by any Person), together with any
interest, penalty, addition to tax or additional amount imposed by any
governmental authority (a "TAXING AUTHORITY") responsible for the imposition of
any such tax (domestic or foreign) and (ii) any liability for the payment of any
amount of the type described in the immediately preceding clause (i) as a result
of any Acquired Subsidiary being a transferee or a member of an affiliated,
consolidated or combined group with any other corporation at any time on or
prior to the Closing Date.
"TAX ASSET" means any net operating loss, net capital loss, investment
tax credit, foreign tax credit, charitable deduction or any other credit or tax
attribute that could be carried forward or back to reduce Taxes (including,
without limitation, deductions and credits related to alternative minimum
Taxes).
"TAX SHARING AGREEMENT" means any existing agreement or arrangement
(whether or not written) binding any Acquired Subsidiary that provides for the
allocation, apportionment, sharing or assignment of any Tax liability or
benefit, or the transfer or assignment of income, revenues, receipts, or gains
for the principal purpose of determining any person's Tax liability.
SECTION 8.2. TAX REPRESENTATIONS. The Seller represents and warrants to
Buyer as of the date hereof and as of the Closing Date that, except as set forth
on Schedule 8.02, (i) all Tax returns, statements, reports and forms that are
material and required to be filed with any Taxing Authority by or on behalf of,
the Acquired Subsidiaries (collectively, the "RETURNS") on or prior to the
Closing Date have been or will be timely filed on or before the Closing Date;
(ii) the Acquired Subsidiaries have timely paid or will timely pay all Taxes
due, or for which assessments have been received, for all periods ending on or
before the Closing Date; (iii) the Returns that have been or will be filed on or
before the Closing Date are true, correct and complete; (iv) there is no action,
suit, proceeding, investigation, audit or claim now proposed or pending against
or with
38
respect to the Acquired Subsidiaries in respect of any Tax; (v) none of the
Acquired Subsidiaries is a party to any agreement, arrangement, or practice for
the sharing of Taxes or is obligated to indemnify any other party for Taxes of
such party; (vi) there are no outstanding rulings of, or requests for rulings
with, any Tax authority that are, or if issued would be, binding on or any
Acquired Subsidiary; (vii) there are no liens for Taxes on any asset of any of
the Acquired Subsidiaries, other than for Taxes not yet due and payable; (viii)
none of the assets of the Acquired Subsidiaries directly or indirectly secures
any debt the interest on which is tax exempt under Section 103(a) of the Code;
(ix) none of the Acquired Subsidiaries will be required to include any
adjustment in taxable income for any period ending after the Closing under
Section 481 of the Code (or under any similar provision of the Tax laws of any
jurisdiction) as a result of a change in the method of accounting for a period
ending on or before the Closing or pursuant to an agreement with a Tax authority
with regard to the Tax liability of an Acquired Subsidiary for any period ending
on or before the Closing; (x) there are no outstanding powers of attorney
enabling any party to represent any of the Acquired Subsidiaries with respect to
Taxes; and (xi) any proceeds paid to the Seller are not subject to any
withholding tax imposed by the jurisdiction in which Seller is organized.
SECTION 8.3. PURCHASE PRICE ALLOCATION; TAX COVENANTS. (a) Buyer and
Seller agree to allocate the Purchase Price prior to closing with respect to the
Purchased Assets and the stock of the Acquired Subsidiaries. In connection
therewith, both Buyer and Seller agree to act in good faith and reasonably to
allocate such Purchase Price and to act in accordance with such allocation in
the preparation, filing and audit of any Tax return.
(b) Subject to Section 8.03(a), Buyer and Seller agree to make a
timely, effective and irrevocable election under Section 338(h)(10) of the Code
and under any comparable statute in any other jurisdiction located within the
United States with respect to the Domestic Acquired Subsidiaries (the "SECTION
338(h)(10) ELECTION") and to file such election in accordance with applicable
regulations. Within 120 days after the Closing Date, Seller shall deliver to
Buyer a draft statement (the "ALLOCATION STATEMENT") proposing to allocate the
Aggregate Deemed Sale Price (as defined under Treasury Regulations Section
1.338-4T) of the assets of the Domestic Acquired Subsidiaries in accordance with
the Treasury Regulations promulgated under Section 338. If within 30 days after
receipt of the Allocation Statement Buyer notifies Seller in writing that the
Buyer disagrees with such allocation, Buyer and Seller will negotiate in good
faith to resolve such dispute. Seller and Buyer agree to (i) act in accordance
with the Allocation Statement in the preparation, filing and audit of any Tax
return and (ii) cooperate fully, as and to the extent reasonably requested by
the other party, in connection
39
with making the Section 338(h)(10) Election. Seller shall also pay any income
Tax imposed on the gain recognized from the transactions described in Article 2
by any member of the Seller Group or any Acquired Subsidiary attributable to the
making of the Section 338(h)(10) Election, including, but not limited to, any
state or local income Tax imposed on the gain recognized from the transactions
described in Article 2 by any member of the Seller Group or any Acquired
Subsidiary as a result of the Section 338(h)(10) Election.
(c) Buyer covenants that it will not cause or permit the Acquired
Subsidiaries or any Affiliate of Buyer (i) to take any action on the Closing
Date other than in the ordinary course of business, including but not limited to
the distribution of any dividend or the effectuation of any redemption that
could increase any Tax liability or reduce any Tax Asset of any member of the
Seller Group or increase any Loss under Section 8.06 of this Agreement or (ii)
to make or change any Tax election (except as provided in Section 8.03(b)), seek
or request any ruling or determination from any Taxing Authority or amend any
Return, in each case in respect of the Acquired Subsidiaries which could
increase any Tax liability or reduce any Tax Asset of any member of the Seller
Group or increase any Loss under Section 8.06 of this Agreement. Buyer agrees
that Seller is to have no liability for any Tax resulting from any action
referred to in the preceding sentence and agrees to indemnify and hold harmless
Seller and its Affiliates against any such Tax (together with any interest,
penalty, addition to Tax or additional amount) and any liabilities, costs,
expenses (including, without limitation, reasonable expenses of investigation
and attorneys' fees and expenses), arising out of or incident to the imposition,
assessment or assertion of any such Tax.
(d) The Seller shall prepare and file or cause to be filed (i) all
Returns in respect of any taxable year ended prior to January 3, 2000, (ii) all
Returns in respect of any Combined Tax of the Domestic Acquired Subsidiaries
related to the Pre-Closing Tax Period. With respect to all Returns specified in
(i) but not in (ii), such Returns shall be subject to Buyer's review and
approval not to be unreasonably withheld and Seller shall deliver such Returns
to Buyer for review at least thirty days prior to the due date. Buyer agrees to
cooperate, and to cause the Acquired Subsidiaries to cooperate, with the
preparation and filing of such Returns. Such cooperation shall include making
employees and representatives of Buyer, the Acquired Subsidiaries or their
Affiliates available to Seller upon the reasonable request of Seller.
(e) All Returns not specified in Section 8.03(d) required to be filed
by any Acquired Subsidiary after the Closing Date with respect to any
Pre-Closing Tax Period will be filed by Buyer when due (taking into account any
extension of
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a required filing date). Any such Return shall be prepared in a manner
consistent with past practice and without a change of any election or any
accounting method and shall be submitted by Buyer to Seller at least 30 days
prior to the due date (including extensions) of such Return. Such Returns shall
be subject to Seller's review and approval not to be unreasonably withheld.
(f) To the extent permitted by law and consistent with the past
practice of the Seller, Seller shall include Domestic Acquired Subsidiaries in
any Combined Tax return of the Seller Group through the close of business on the
Closing Date.
(g) All transfer, documentary, sales, use, stamp, registration and
other such Taxes and fees (including any penalties and interest) incurred in
connection with transactions contemplated by this Agreement (including any real
property transfer Tax and any similar Tax) shall be borne and paid equally by
Buyer and Seller, and Buyer will, at its own expense, file all necessary Returns
and other documentation with respect to all such Taxes and fees, and, if
required by applicable law, Seller will, and will cause its Affiliates to, join
in the execution of any such Returns and other documentation.
SECTION 8.4. TAX SHARING. Any and all existing Tax Sharing Agreements
between any Acquired Subsidiary and any member of the Seller Group shall be
terminated as of the Closing Date. After such date none of the Acquired
Subsidiaries shall have any further rights or liabilities thereunder. Except as
approved in writing by Buyer prior to Closing, all powers of attorney
authorizing any party to represent an Acquired Subsidiary shall be terminated on
or before the Closing Date.
SECTION 8.5. COOPERATION ON TAX MATTERS. Buyer and Seller agree to
furnish or cause to be furnished to each other, upon request, as promptly as
practicable, such information (including access to books and records) and
assistance relating to the Acquired Subsidiaries or the Business as is
reasonably necessary for the filing of any Return (including any report required
pursuant to Section 6043 of the Code and all Treasury Regulations promulgated
thereunder), for the preparation for any audit, and for the prosecution or
defense of any claim, suit or proceeding relating to any proposed adjustment.
Buyer and Seller agree to retain or cause to be retained all books and records
pertinent to the Acquired Subsidiaries until the applicable period for
assessment under applicable law (giving effect to any and all extensions or
waivers) has expired, and to abide by or cause the abidance with all record
retention agreements entered into with any Taxing Authority. Buyer shall give
and cause the Acquired Subsidiaries to give Seller reasonable notice prior to
transferring, discarding or destroying any such
41
books and records relating to Tax matters and, if Seller so requests, Buyer
shall allow or cause the Acquired Subsidiaries to allow Seller to take
possession of such books and records. Buyer and Seller shall cooperate with each
other in the conduct of any audit or other proceedings involving the Acquired
Subsidiaries or the Business for any Tax purposes and each shall execute and
deliver such powers of attorney and other documents as are necessary to carry
out the intent of this Section 8.05.
SECTION 8.6. INDEMNIFICATION BY SELLER. (a) Seller hereby indemnifies
Buyer against and agrees to hold it harmless from any (i) Tax of the Acquired
Subsidiaries relating to a Pre-Closing Tax Period and any Tax of the Seller or a
Seller Designee, and (ii) liabilities, costs and expenses (including, without
limitation, reasonable expenses of investigation and attorneys' fees and
expenses), arising out of or incident to the imposition, assessment or assertion
of any such Tax, including those incurred in the contest in good faith in
appropriate proceedings relating to the imposition, assessment or assertion of
any such Tax, in each case incurred or suffered by Buyer, any of its Affiliates
or, effective upon the Closing, the Acquired Subsidiaries (the sum of (i) and
(ii) being referred to as a "LOSS"). Notwithstanding the foregoing, Seller shall
have no liability for the payment of any Loss attributable to or resulting from
any action described in Section 8.03(c) hereof; PROVIDED, FURTHER, that (A)
Seller's obligation to make any payment in respect of any Loss to the extent
that such Loss is attributable to an adjustment which results in a corresponding
deduction, amortization, exclusion from income or other allowance (a "TAX
BENEFIT") to Buyer, any of its Affiliates or the Acquired Subsidiaries shall be
reduced by the present value of the Tax Benefit multiplied by the maximum
federal, state or local, as the case may be, corporate Tax rate in effect at the
time the relevant adjustment is made, or, in the case of a credit, by 100
percent. The present value referred to in the preceding sentence shall be
determined using a discount rate equal to the mid-term applicable federal rate
in effect at the time the relevant adjustment is made and assuming that the Tax
Benefit will be used at the earliest date or dates allowable by applicable law
and (B) except in the case of Excluded Liabilities, this Section 8.06 shall
provide the sole source of indemnification from Seller in respect of any Tax.
(b) For purposes of this Section 8.06, in the case of any Taxes that
are imposed on a periodic basis and are payable for a Taxable period that
includes (but does not end on) the Closing Date, the portion of such Tax related
to the portion of such Taxable period ending on the Closing Date shall (x) in
the case of any Taxes other than Taxes based upon or related to income, sales,
revenue or payroll be deemed to be the amount of such Tax for the entire Taxable
period multiplied by a fraction the numerator of which is the number of days in
the
42
Taxable period ending on the Closing Date and the denominator of which is the
number of days in the entire Taxable period, and (y) in the case of any Tax
based upon or related to income, sales, revenue or payroll be deemed equal to
the amount which would be payable if the relevant Taxable period ended on the
Closing Date. Any credits relating to a Taxable period that begins before and
ends after the Closing Date shall be taken into account as though the relevant
Taxable period ended on the Closing Date. All determinations necessary to give
effect to the foregoing allocations shall be made in a manner consistent with
prior practice of the Acquiring Subsidiaries.
(c) If any claim or demand for Taxes in respect of which indemnity may
be sought pursuant to this Section 8.06 is asserted in writing against Buyer,
any of its Affiliates or, effective upon the Closing, the Acquired Subsidiaries,
Buyer shall notify Seller of such claim or demand promptly upon the receipt
thereof, or such earlier time that would allow Seller to timely respond to such
claim or demand, and shall give Seller such information with respect thereto as
Seller may reasonably request. The failure of Buyer to notify Seller promptly
shall not relieve Seller of its obligations under this Agreement except to the
extent such failure materially prejudices Seller's ability to defend the claim
or otherwise increases Seller's liability in respect of Taxes resulted from the
claim. Seller may discharge, at any time, its indemnification obligation under
this Section 8.06 by paying to Buyer the amount payable pursuant to this Section
8.06, calculated on the date of such payment. Seller may, at its own expense,
participate in and, upon notice to Buyer, assume and control the defense of any
such claim, suit, action, litigation or proceeding (including any Tax audit). If
Seller assumes such defense, (i) Buyer shall have the right (but not the duty)
to participate in the defense thereof and to employ counsel separate from the
counsel employed by Seller; (ii) Seller shall not be liable for any expenses
incurred thereafter by Buyer in connection with the defense of any such claim,
suit, action, litigation or proceeding and (iii) Buyer shall execute or cause
the Acquired Subsidiaries to execute any power of attorney or other document
necessary to permit Seller to control or to settle or to otherwise resolve any
such claim, action, litigation or proceeding. Without the consent of Buyer
(which consent shall not be unreasonably withheld), Seller shall not settle any
such claim, assessment, or dispute with respect to any Tax if such settlement
could affect the amount of Taxes of any Acquired Subsidiary for any Tax period
after the Closing. Whether or not Seller chooses to defend or prosecute any
claim, all of the parties hereto shall cooperate in the defense or prosecution
thereof.
(d) Seller shall not be liable under this Section 8.06 for (i) any Tax
the payment of which was made without Seller's prior written consent and (ii)
any settlements effected without the consent of Seller and resulting from any
claim,
43
suit, action, litigation or proceeding in which Seller was not permitted an
opportunity to assume and control the defense.
SECTION 8.7. SURVIVAL. The indemnity obligation of Seller in Section
8.06 shall survive until 60 days after the expiration of the applicable statute
of limitations (giving effect to any waiver or extension thereof). No
representations or warranties contained in Section 8.02 shall survive after the
Closing.
ARTICLE 9
EMPLOYEE BENEFITS
SECTION 9.1. EMPLOYEES AND OFFERS OF EMPLOYMENT. (a) On the Closing
Date, Buyer shall offer employment to all Business Employees except for Roy
Burton; PROVIDED that Buyer may terminate at any time after the Closing Date the
employment of any employee who accepts such offer (PROVIDED, HOWEVER, that Buyer
shall not take or omit to take, and shall not cause any Acquired Subsidiary to
take or omit to take, any action that could result in any liability to Seller or
its Affiliates under the WARN Act). Seller shall use its reasonable best efforts
to cooperate in facilitating the performance of Buyer's obligation to make such
offers. Any such offers shall be at such salary or wage which, in the aggregate,
is no less favorable than that provided to Business Employees immediately prior
to the Closing Date. The employees offered employment by Buyer and who accept
and commence such employment are hereinafter collectively referred to as the
"TRANSFERRED EMPLOYEES". Seller will not take, and will cause each of its
Subsidiaries not to take, any action which would impede, hinder, interfere or
otherwise compete with Buyer's effort to hire any Business Employees.
(b) Schedule 9.01 sets forth a true and complete list of (a) all
material severance agreements, policies, plans, and programs of Seller other
than statutory severance plans or programs, (b) all material employment
agreements with Business Employees, including any agreement containing a
change-in-control provision, other than standard form employment agreements, and
(c) all material retention agreements or arrangements existing or anticipated
between Seller and any Business Employee. Following the Closing, Buyer shall, or
shall cause the Acquired Subsidiaries, to honor all obligations under any
employment or severance agreements or arrangements as set forth in Schedule 9.01
hereto covering any Transferred Employee. Buyer shall honor all vacation,
personal and sick days accrued by Transferred Employees under any plans,
policies, programs and arrangements of Seller or any Acquired Subsidiary
immediately prior to the
44
Closing and, except as to those employees covered under any Collective
Bargaining Agreements, Buyer shall provide, or shall cause the Acquired
Subsidiaries to provide, Transferred Employees from the Closing Date through
December 31, 2000 with (A) annual salary or wage that is not less than the
annual salary or wage which they were receiving immediately prior to the Closing
Date, and (B) benefits which, in the aggregate, are substantially comparable to
those benefits provided to such employees immediately prior to the Closing Date.
Subsequent to the Closing Date, Buyer shall be under no obligation to provide to
any Transferred Employees any defined pension plans, or any post-employment,
medical, dental or life insurance programs, unless required under any applicable
law. Buyer shall maintain, or shall cause to be maintained, a "cafeteria plan",
as defined in Section 125 of the Code, under which health care and dependant
care flexible spending accounts are maintained with respect to Transferred
Employees on no less favorable terms than the cafeteria plan maintained by
Seller for at least until the last day of the current plan year of the Seller's
cafeteria plan.
(c) With respect to each employee benefit plan of Buyer or its
Affiliates in which a Transferred Employee may participate (including any
defined benefit and defined contribution plans), for purposes of determining
eligibility to participate, vesting and entitlement to benefits (including for
severance benefits, vacation entitlement and service awards), service with the
Seller or its Affiliates shall be treated as service with Buyer and its
Affiliates; PROVIDED, HOWEVER, that such service shall not be recognized to the
extent that such recognition would result in a duplication of benefits. Such
service shall also apply for purposes of satisfying any waiting periods,
evidence of insurability requirements or the application of any preexisting
condition limitations. Transferred Employees shall be given credit for amounts
paid under a corresponding benefit plan during the same period for purposes of
applying deductibles, co-payments and out-of-pocket maximums as though such
payments had been paid in accordance with the terms and conditions of the
employee benefits plans of Buyer or its Affiliates.
(d) Following the Closing, Buyer shall assume and honor all
obligations under any Collective Bargaining Agreement as such may exist on the
Closing Date covering any Transferred Employees.
SECTION 9.2. SELLER PLANS. (a) Except as expressly set forth herein,
Seller or its designated Affiliates shall retain or reimburse Buyer for all
liabilities and obligations (including any underfunding of defined benefits
plans as of the Closing Date) in respect of benefits accrued under all benefit
plans or arrangements maintained, administered or contributed to by Seller or
its Affiliates, including the Employee Plans and International Plans, in respect
of each Transferred Employee, employee, or former employee (including any
45
beneficiary thereof). Except as expressly set forth herein, no assets of any
benefit plans or arrangements maintained, administered or contributed to by
Seller or any Affiliate thereof, including any Employee Plan or International
Plan, shall be transferred to Buyer or any of its Affiliates or to any plan of
Buyer or any of its Affiliates; PROVIDED, that Seller shall not retain, and
Buyer shall assume, any and all obligations and liabilities with respect to
benefits accrued by Transferred Employees during the transitional services
period as provided for in Annex J. Benefit accruals in respect of Transferred
Employees under any such plan shall cease at the later of the Closing Date or
end of the transitional period as provided for in Annex J. All health care and
dependant care flexible spending accounts maintained with respect to Transferred
Employees under the Seller's cafeteria plan shall be transferred to the Buyer or
one of its Affiliates.
(b) With respect to any Transferred Employee (including any
beneficiary or dependent thereof) who enters a hospital or is on short-term
disability or workers' compensation under any Employee Plan or International
Plan on or prior to the Closing Date and continues in a hospital or on
short-term disability or workers' compensation after the Closing Date, Seller
shall be responsible for claims and expenses incurred both before and after the
Closing Date in connection with such person, to the extent that such claims and
expenses are covered by an Employee Plan or International Plan until such time,
(if any) that, in the case of a Transferred Employee, such person resumes
full-time employment with Buyer or one of its Affiliates and, in the case of any
beneficiary or dependent of a Transferred Employee, such person's
hospitalization has terminated. With respect to any benefit plans or
arrangements covering medical expenses and other costs relating to pregnancies
and maternity leave, Seller shall be responsible for all claims (whether or not
reported) and expenses incurred during the period prior to and ending on the
Closing Date, and Buyer and its Affiliates shall be responsible for such benefit
plans or arrangements covering such pregnancies and maternity leave for the
period subsequent to the Closing Date.
SECTION 9.3. THIRD PARTY BENEFICIARIES. No provision of this Article 9
shall create any third party beneficiary or other rights in any employee or
former employee (including any beneficiary or dependent thereof) of Seller or
any of its Affiliates in respect of continued employment (or resumed employment)
with either Buyer or any of its Affiliate or Seller or any of its Affiliate or
in connection with the Business and no provision of this Article 9 shall create
any such rights in any such individuals in respect of any benefits that may be
provided, directly or indirectly, under any benefit plans or arrangements
maintained, administered or contributed to by Seller or any of its Affiliate,
including any Employee Plan or International Plan, or any plan or arrangement
which may be established by Buyer
46
or any of its Affiliates. No provision of this Agreement shall constitute a
limitation on rights to amend, modify or terminate after the Closing Date any
such plans or arrangements of Buyer or any of its Affiliates.
SECTION 9.4. EXCLUDED EMPLOYEES. Buyer and Seller agree that all
individuals employed by the European Headquarters (including such persons on
leave of absence) shall be Excluded Employees; PROVIDED that Buyer shall have
the right prior to Closing to designate any such employees as "Business
Employees" by written notice to Seller within 45 days after the date hereof. Any
employee so designated by Buyer shall be deemed not to be an Excluded Employee
and shall instead be deemed a Business Employee for the purposes of this
Agreement.
SECTION 9.5. RETENTION AGREEMENTS. Notwithstanding anything in this
Agreement to the contrary, Buyer shall assume all obligations and liabilities
under any retention agreements entered into by Seller or any of its Affiliates
with the consent of Buyer in accordance with Section 5.01(d) hereof (including,
without limitation, those retention agreements set forth on Schedule 9.01).
ARTICLE 10
CONDITIONS TO CLOSING
SECTION 10.1. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER. (a) The
obligations of Buyer and Seller to consummate the Closing are subject to the
satisfaction of the following conditions:
(i) Any applicable waiting period under the HSR Act relating
to the transactions contemplated hereby shall have expired or been
terminated.
(ii) No provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation
of the Closing.
(iii) All applicable governmental consents and approvals
(including such consents and approvals as required under applicable
antitrust, competition or merger control laws) shall have been
obtained.
(iv) Seller shall have obtained the Required Consents.
47
(b) Notwithstanding the foregoing, in the event that all of the
conditions set forth in this Article 10 are satisfied with respect to the Key
Countries and the condition set forth in Section 10.02(d) is satisfied, but such
conditions (except for the condition set forth in Section 10.02(d)) are not
satisfied with respect to one or more other jurisdictions, Seller and Buyer
agree to consummate the Closing with respect to those assets and liabilities of
the Business for which (i) all required approvals and consents described in
Section 10.01(a) have been obtained, or (ii) no approvals or consents are
required (a "PRIMARY CLOSING"). In the event of a Primary Closing, Buyer shall
pay the entire Purchase Price into an account (the "ESCROW ACCOUNT") established
pursuant to an escrow agreement reasonably satisfactory to both Seller and
Buyer. Funds in the escrow account will bear interest from the date of the
Primary Closing as provided in the escrow agreement, such interest to be for the
account of the Seller. At the Primary Closing, (A) Seller shall transfer and
assign to Buyer, and Buyer shall purchase and accept from Seller, those
Purchased Assets and Assumed Liabilities constituting that part of the Business
for which consents or approvals described in Section 10.01(a) have been obtained
or are not required, and (B) Buyer and Seller shall cause to be released from
the Escrow Account such amount of the Purchase Price that Buyer and Seller shall
agree in good faith to be allocated to such part of the Business being so
transferred. The closing or closings with respect to the Purchased Assets and
Assumed Liabilities not transferred, assigned, purchased and accepted at the
Primary Closing (each, a "SUBSEQUENT CLOSING") shall occur as promptly as
practical after receipt of the remaining approvals and consents referred to in
Section 10.01(a). At each Subsequent Closing, Buyer and Seller shall cause to be
released from the Escrow Account such amount of the Purchase Price that Buyer
and Seller shall agree in good faith to be allocated to such part of the
Business being so transferred. From the Primary Closing, the entirety of the
Business shall be operated for the benefit and detriment of Buyer. Buyer and
Seller agree to negotiate in good faith any appropriate modifications to this
Agreement to effectuate the foregoing.
SECTION 10.2. CONDITIONS TO OBLIGATION OF BUYER. The obligation of
Buyer to consummate the Closing is subject to the satisfaction of the following
further conditions:
(a) (i) Seller shall have performed in all material respects all of
its obligations hereunder required to be performed by it on or prior to the
Closing Date, (ii) the representations and warranties of Seller contained in
this Agreement and in any certificate or other writing delivered by Seller
pursuant hereto shall be true at and as of the Closing Date, as if made at and
as of such date without qualification as to materiality or Material Adverse
Effect, with only such
48
exceptions as would not in the aggregate have a Material Adverse Effect and
(iii) Buyer shall have received a certificate signed by an executive officer of
Seller to the foregoing effect.
(b) Buyer shall have received all documents it may reasonably request
relating to the existence of Seller and the Acquired Subsidiaries and the
authority of Seller for this Agreement, all in form and substance reasonably
satisfactory to Buyer.
(c) Seller shall have consummated the Reorganization.
(d) There shall not have been any Material Adverse Effect from the
date hereof to the Closing Date.
(e) Seller shall have provided to Buyer copies of resolutions of
Seller certified by the Secretary or an Assistant Secretary of Seller
authorizing the execution, delivery and performance of this Agreement and the
transactions contemplated hereby.
SECTION 10.3. CONDITIONS TO OBLIGATION OF SELLER. The obligation of
Seller to consummate the Closing is subject to the satisfaction of the following
further conditions:
(a) (i) Buyer shall have performed in all material respects all of its
obligations hereunder required to be performed by it at or prior to the Closing
Date, (ii) the representations and warranties of Buyer contained in this
Agreement and in any certificate or other writing delivered by Buyer pursuant
hereto shall be true in all material respects at and as of the Closing Date, as
if made at and as of such date and (iii) Seller shall have received a
certificate signed by an executive officer of Buyer to the foregoing effect.
(b) Seller shall have received all documents it may reasonably request
relating to the existence of Buyer and the authority of Buyer for this
Agreement, all in form and substance reasonably satisfactory to Seller.
(c) Buyer shall have provided to Seller copies of resolutions of Buyer
certified by the Secretary or an Assistant Secretary of Buyer authorizing the
execution, delivery and performance of this Agreement and the transactions
contemplated hereby.
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ARTICLE 11
SURVIVAL; INDEMNIFICATION
SECTION 11.1. SURVIVAL. Subject to Section 8.07 of this Agreement, the
representations and warranties of the parties hereto contained in this Agreement
shall survive the Closing until the date which is eighteen (18) months after the
Closing Date; PROVIDED that the representations and warranties contained in
Section 3.06(b) and Section 3.17(b) shall survive the Closing indefinitely.
Notwithstanding the preceding sentence, any representation or warranty in
respect of which indemnity may be sought under this Agreement shall survive the
time at which it would otherwise terminate pursuant to the preceding sentence,
if notice of the inaccuracy thereof giving rise to such right of indemnity shall
have been given to the party against whom such indemnity may be sought prior to
such time.
SECTION 11.2. INDEMNIFICATION. (a) Seller hereby indemnifies Buyer and
its Affiliates against and agrees to hold each of them harmless from any and all
damage, loss, liability and expense (including, without limitation, reasonable
expenses of investigation and reasonable attorneys' fees and expenses in
connection with any action, suit or proceeding) ("DAMAGES") incurred or suffered
by Buyer or any of its Affiliates arising out of:
(i) any misrepresentation or breach of warranty made by Seller
pursuant to this Agreement (other than any representation or warranty
contained in Section 3.07(c), 3.08(a), 3.17(b), 3.23(a), or Article 8);
(ii) any breach of any covenant or agreement made by Seller
pursuant to this Agreement (other than any covenant or agreement
contained in Article 8, which shall be governed according to the terms
of Article 8); and
(iii) any Excluded Liability;
PROVIDED that (A) Seller shall not be liable under Section 11.02(a)(i)
unless the aggregate amount of Damages with respect to all matters referred to
in Section 11.02(a)(i) exceeds $3,000,000 (the "BASKET AMOUNT") and then only to
the extent of such excess and (B) Seller's maximum liability under Section
11.02(a)(i) shall not exceed $250,000,000 (the "CAP AMOUNT"); and PROVIDED
FURTHER, that neither the Basket Amount nor the Cap Amount shall be applicable
to claims arising under the first sentence of Section 3.06(b) or under Article
8.
50
(b) Buyer hereby indemnifies Seller and its Affiliates against and
agrees to hold each of them harmless from any and all Damages incurred or
suffered by Seller or any of its Affiliates arising out of:
(i) any misrepresentation or breach of warranty made by Buyer
pursuant to this Agreement;
(ii) any breach of any covenant or agreement made by Buyer
pursuant to this Agreement;
(iii) any Assumed Liability; and
(iv) the operation of the Business by Buyer and its Affiliates
after the Closing;
PROVIDED that (A) Buyer shall not be liable under Section 11.02(b)(i)
unless the aggregate amount of Damages with respect to all matters referred to
in Section 11.02(b)(i) exceeds the Basket Amount and then only to the extent of
such excess and (B) Buyer's maximum liability under Section 11.02(b)(i) shall
not exceed the Cap Amount.
(c) Seller hereby indemnifies Buyer and its Affiliates against and
agrees to hold each of them harmless from Damages incurred or suffered by Buyer
or any of its Affiliates, subject to the terms of Section 11.03(f) below, to the
extent arising out of (A) any Environmental Liabilities and (B) any
misrepresentation or breach of warranty of Seller in Section 3.17(b), and
limited to the percentage of such Damages as follows:
(i) 100% of the Damages arising in connection with the matters
specified in Schedule 11.02(c) or arising out of any misrepresentation
or breach of warranty of Seller in Section 3.17(b);
(ii) with respect to Environmental Liabilities not identified
on Schedule 11.02(c) or not arising from a misrepresentation or breach
of warranty made by Seller in Section 3.17(b):
(A) 100% of the first $2,000,000 (the "ENVIRONMENTAL
DEDUCTIBLE") in aggregate Damages to the extent identified in
Section 11.02(c)(ii)(B) or 11.02(c)(ii)(C);
(B) with respect to any claim relating to any
Environmental Liability which is received by Buyer on or prior
to
51
the 5th anniversary of the Closing Date, 75% of any Damages
(after giving effect to the Environmental Deductible) arising
out of such Environmental Liability;
(C) with respect to any claim relating to any
Environmental Liability which is received by Buyer after the
5th anniversary of the Closing Date but on or prior to the 7th
anniversary of the Closing Date, 50% of any Damages (after
giving effect to the Environmental Deductible) arising out of
such Environmental Liability; and
(D) with respect to any claim relating to any
Environmental Liability which is received by Buyer at any time
after the 7th anniversary of the Closing Date, 0% of any
Damages arising out of such Environmental Liability.
SECTION 11.3. PROCEDURES. (a) The party seeking indemnification under
Section 11.02 (the "INDEMNIFIED PARTY") agrees to give prompt notice in
reasonable detail to the party against whom indemnity is sought (the
"INDEMNIFYING PARTY") of the assertion of any claim, or the commencement of any
suit, action or proceeding in respect of which indemnity may be sought under
such Section and will provide the Indemnifying Party such information with
respect thereto that the Indemnifying may reasonably request. Except as
otherwise provided in Section 11.02(c), the failure to so notify the
Indemnifying Party shall not relieve the Indemnifying Party of its obligations
hereunder, except to the extent such failure shall have adversely prejudiced the
Indemnifying Party.
(b) The Indemnifying Party shall be entitled to participate in the
defense of any Claim asserted by any third party ("THIRD PARTY CLAIM") and,
subject to the limitations set forth in Section 11.03(c), shall be entitled to
control and appoint lead counsel for such defense, in each case at its expense.
(c) If the Indemnifying Party shall assume the control of the defense
of any Third Party Claim in accordance with the provisions of this Section
11.03, (i) the Indemnifying Party shall obtain the prior written consent of the
Indemnified Party (which shall not be unreasonably withheld) before entering
into any settlement of such Third Party Claim, if the settlement does not
release the Indemnified Party from all liabilities and obligations with respect
to such Third Party Claim or the settlement imposes injunctive or other
equitable relief against the Indemnified Party and (ii) the Indemnified Party
shall be entitled to participate in the defense of such Third Party Claim and to
employ separate counsel of its
52
choice for such purpose. The fees and expenses of such separate counsel shall be
paid by the Indemnified Party.
(d) Each party shall cooperate, and cause their respective Affiliates
to cooperate, in the defense or prosecution of any Third Party Claim and shall
furnish or cause to be furnished such records, information and testimony, and
attend such conferences, discovery proceedings, hearings, trials or appeals, as
may be reasonably requested in connection therewith.
(e) For the avoidance of doubt, the parties acknowledge and agree that
the provisions of Section 11.03(a) through (d) above shall apply to any suit,
action or proceeding relating to any Excluded Liability, including without
limitation those items identified in Item 5 of Annex E; PROVIDED, however, that
Buyer shall not be required to give notice pursuant to Section 11.03(a) to
Seller with respect to any Excluded Liabilities that are identified on Schedule
3.08(a).
(f) ENVIRONMENTAL PROCEDURES. (i) With respect to any Damages for
which Buyer or its Affiliates are seeking indemnification pursuant to Sections
11.02(c)(i), 11.02(c)(ii)(A), or 11.02(c)(ii)(B), (x) Seller shall have the
right at its option to retain exclusive control over such matters, PROVIDED that
Seller agrees to use reasonable best efforts to avoid unreasonable interference
with the operation of the Business and agrees to provide Buyer, in advance, with
a reasonably detailed description of any proposed remedial actions and a
reasonable period of time, given the specific circumstances, to permit Buyer to
comment on such proposed actions, and Seller agrees to consider in good faith
any such comments, and (y) Buyer agrees to, and shall cause its Affiliates to,
cooperate with Seller in providing all necessary and reasonably requested access
to properties and facilities and providing Seller with copies of all
communications relating to such matter received from any governmental entity or
third party. Seller agrees to provide to Buyer copies of any and all material
environmental audits, studies, action plans, tests and communications with any
governmental entity or third party relating to Seller's remedial activities with
respect to facilities that are part of the Business at the Closing Date. With
respect to any Damages for which Buyer or its Affiliates are seeking
indemnification pursuant to Section 11.02(c)(ii)(C), Buyer shall have the right
at its option to retain exclusive control over such matters, PROVIDED that Buyer
agrees to provide Seller, in advance, with a reasonably detailed description of
any proposed remedial actions and a reasonable period of time, given the
specific circumstances, to permit Seller to comment on such proposed actions,
and Buyer agrees to consider in good faith any such comments. Buyer agrees to
provide to Seller copies of any and all material environmental audits, studies,
action plans, tests and communications with any
53
governmental entity or third party relating to Buyer's remedial activities with
respect to facilities that are part of the Business at the Closing Date.
(ii) Buyer and its Affiliates agree not to take any voluntary action,
including any sampling of the soil or groundwater, or to initiate or encourage
any action by any third party, including any governmental agency or third party,
which could reasonably be expected to lead to a claim by such third party with
respect to such matters; PROVIDED THAT if any applicable law, including any
Environmental Law, or any lease existing as of the Closing Date (including such
extensions on the identical terms of such lease, but recognizing that terms such
as length of lease, price, insurance or utilities may vary) with respect to
facilities that are part of the Business at the Closing Date, or any third party
claim against Buyer, the Acquired Subsidiaries or their respective Affiliates,
requires any of Buyer, the Acquired Subsidiaries or their respective Affiliates
to investigate, take action, initiate or encourage any such action, Buyer will
promptly notify Seller of such requirement and the content and timing of any
action that Buyer or its Affiliates proposes to make, and Seller and Buyer shall
consult with each other regarding the satisfaction of such requirement.
(iii) Seller shall have no liability under Section 11.02(c) of this
Agreement for any Damages to the extent arising out of any voluntary
investigation (whether through the taking of soil or groundwater samples or
otherwise) except as expressly permitted in Section 11.03(f)(ii), whether by
Buyer, its Affiliates or any other person, including any subsequent owner or
operator of the Business or any Purchased Asset.
(iv) Notwithstanding the provision of Section 11.03(f)(ii) and (iii)
hereof, Buyer, the Acquired Subsidiaries and their respective Affiliates may
conduct or permit to be conducted reasonable, non-intrusive environmental
inspections and compliance audits and assessments of the Business sites in the
ordinary course as part of a compliance program so long as any inspection or
audit is performed in a manner consistent with the manner in which Buyer and its
Affiliates generally conduct such inspections or audits for their other
facilities. Furthermore, to the extent that a bona fide prospective purchaser of
any of the Business sites requests authorization to conduct an environmental
assessment of any of such in the course of its due diligence investigation with
respect to the purchase of any of such sites, Buyer and its Affiliates may
permit the conduct of a non-intrusive Phase I investigation of such sites.
(v) Seller's obligation to indemnify Buyer or any of its Affiliates for
any Damages pursuant to Section 11.02(c) or with respect to any other
environmental matters, shall be limited to those Damages which are not caused by
54
Buyer or its Affiliates and shall also be limited to those which must be
incurred to meet the least stringent applicable requirements of any applicable
Environmental Law, based upon the use of the most reasonable cost-effective
method available under the circumstances based upon the use of the property as
industrial property. To the extent necessary to achieve the purposes set forth
in this Section 11.03(f)(v), Buyer and its Affiliates agree that a deed or other
restriction on real property owned by Buyer or its Affiliates is a reasonable
cost-effective method so long as such restriction does not materially limit the
industrial activities currently being performed on those properties.
SECTION 11.4. CALCULATION OF DAMAGES. (a) The amount of any Damages
payable under Section 11.03 by the Indemnifying Party shall be net of (i) any
amounts recovered or recoverable by the Indemnified Party under applicable
insurance policies, (ii) any Tax imposed by the Indemnified Party arising from
the receipt of indemnity payments and (iii) any Tax Benefit realized by the
Indemnified Party arising from the incurrence or payment of any such Damages. In
computing the amount of any such Tax cost or Tax Benefit, the Indemnified Party
shall be deemed to fully utilize, at the highest marginal tax rate then in
effect, all Tax items arising from the receipt of any indemnity payment
hereunder or the incurrence or payment of any indemnified Damages.
(b) The Indemnifying Party shall not be liable under Section 11.02 for
any (i) Damages relating to any matter to the extent that the Indemnified Party
had been compensated for such matter pursuant to the Purchase Price adjustment
under Section 2.09 or (ii) consequential or punitive Damages (other than
consequential or punitive Damages that arise from a Third-Party Claim for
consequential or punitive Damages).
SECTION 11.5. ASSIGNMENT OF CLAIMS. If the Indemnified Party receives
any payment from an Indemnifying Party in respect of any Damages pursuant to
Section 11.02 and the Indemnified Party could have recovered all or a part of
such Damages from a third party (a "POTENTIAL CONTRIBUTOR") based on the
underlying Claim asserted against the Indemnifying Party, the Indemnified Party
shall assign such of its rights to proceed against the Potential Contributor as
are necessary to permit the Indemnifying Party to recover from the Potential
Contributor the amount of such payment; PROVIDED that the Indemnified Party
shall not be required to assign any right to proceed against a Potential
Contributor if the Indemnified Party determines in its reasonable discretion
that such assignment would be materially detrimental to its reputation or future
business prospects.
SECTION 11.6. EXCLUSIVITY. After the Closing, the indemnification
provided in this Article 11 will be the sole and exclusive remedy of Buyer and
55
Seller with respect to matters described in this Article 11 and Buyer waives any
rights and claims it or its Affiliates may have against Seller and its
Affiliates, whether in law or in equity, relating to the Business, the Purchased
Assets or the Real Property, including without limitation claims for
contribution or other rights or recovery arising out of or relating to any
Environmental Law.
ARTICLE 12
TERMINATION
SECTION 12.1. GROUNDS FOR TERMINATION. This Agreement may be terminated
at any time prior to the Closing:
(a) by mutual written agreement of Seller and Buyer;
(b) by either Seller or Buyer if the Closing (or the Primary
Closing, if applicable) shall not have been consummated on or before
December 31, 2000; or
(c) by either Seller or Buyer if consummation of the
transactions contemplated hereby would violate any nonappealable final
order, decree or judgment of any court or governmental body having
competent jurisdiction.
The party desiring to terminate this Agreement pursuant to clauses
12.01(b) or 12.01(c) shall give notice of such termination to the other party.
SECTION 12.2. EFFECT OF TERMINATION. If this Agreement is terminated as
permitted by Section 12.01(b) or 12.01(c), such termination shall be without
liability of either party (or any stockholder, director, officer, employee,
agent, consultant or representative of such party) to the other party to this
Agreement; PROVIDED that if such termination shall result from the willful (i)
failure of either party to fulfill a condition to the performance of the
obligations of the other party, (ii) failure to perform a covenant of this
Agreement or (iii) breach by either party hereto of any representation or
warranty or agreement contained herein, such party shall be fully liable for any
and all Damages incurred or suffered by the other party as a result of such
failure or breach. The provisions of Sections 6.01, 13.03, 13.05, 13.06 and
13.07 shall survive any termination hereof pursuant to Section 12.01.
56
ARTICLE 13
MISCELLANEOUS
SECTION 13.1. NOTICES. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile transmission)
and shall be given,
if to Buyer, to:
Tyco Group S.a.r.l.
6, Avenue Emile Reuter
Second Floor
L-2420 Luxembourg
Attn: Managing Director
Fax: 352-021-181-281
with a copy to:
Tyco International (US) Inc.
One Tyco Park
Exeter, New Hampshire 03833
Attn: General Counsel
Fax: (603) 778-7700
if to Seller, to:
Thomas & Betts Corporation
8155 T&B Boulevard
Memphis, Tennessee 38125
Attention: Jerry Kronenberg
Vice President, General Counsel and Secretary
Fax: (901) 252-1354
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: Paul R. Kingsley
57
Fax: (212) 450-4800
All such notices, requests and other communications shall be deemed received on
the date of receipt by the recipient thereof if received prior to 5:00 p.m. in
the place of receipt and such day is a business day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to have
been received until the next succeeding business day in the place of receipt.
SECTION 13.2. AMENDMENTS AND WAIVERS. (a) Any provision of this
Agreement may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed, in the case of an amendment, by each party to this
Agreement, or in the case of a waiver, by the party against whom the waiver is
to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 13.3. EXPENSES. Except as otherwise provided herein, all costs
and expenses incurred in connection with this Agreement shall be paid by the
party incurring such cost or expense.
SECTION 13.4. SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; PROVIDED that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party hereto. Notwithstanding the foregoing,
Buyer may transfer or assign in whole or in part to one or more of its
subsidiaries or Affiliates the right to purchase all or a portion of the
Purchased Assets, but no such transfer or assignment will relieve Buyer of its
obligations hereunder. Buyer agrees that upon any transfer of all or
substantially all of the assets of Buyer, Buyer shall either (a) cause the
transferee of such assets to assume the obligations of Buyer to Seller
hereunder, or (b) cause a Person with a creditworthiness greater than or equal
to that of Buyer at the time of such transfer to assume Buyer's obligations to
Seller hereunder, in each case pursuant to an instrument in writing reasonably
satisfactory to Seller.
SECTION 13.5. GOVERNING LAW. Agreement shall be governed by and
construed in accordance with the law of the State of New York, without regard to
the conflicts of law rules of such state.
58
SECTION 13.6. JURISDICTION. Except as otherwise expressly provided in
this Agreement, the parties hereto agree that any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby shall be
brought in the United States District Court for the Southern District of New
York or any New York State court sitting in New York City, so long as one of
such courts shall have subject matter jurisdiction over such suit, action or
proceeding, and that any cause of action arising out of this Agreement shall be
deemed to have arisen from a transaction of business in the State of New York,
and each of the parties hereby irrevocably consents to the jurisdiction of such
courts (and of the appropriate appellate courts therefrom) in any such suit,
action or proceeding and irrevocably waives, to the fullest extent permitted by
law, any objection that it may now or hereafter have to the laying of the venue
of any such suit, action or proceeding in any such court or that any such suit,
action or proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 13.01 shall be deemed
effective service of process on such party.
SECTION 13.7. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
SECTION 13.8. COUNTERPARTS; THIRD PARTY BENEFICIARIES. This Agreement
may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received a counterpart hereof signed by the other party hereto. No
provision of this Agreement is intended to confer upon any Person other than the
parties hereto any rights or remedies hereunder.
SECTION 13.9. ENTIRE AGREEMENT. This Agreement and the annexes and
schedules hereto constitute the entire agreement between the parties with
respect to the subject matter of this Agreement and supersedes all prior
agreements and understandings, both oral and written, between the parties with
respect to the subject matter of this Agreement.
59
SECTION 13.10. BULK SALES LAWS. Buyer and Seller each hereby waive
compliance by Seller with the provisions of the "bulk sales", "bulk transfer" or
similar laws of any state. Seller agrees to indemnify and hold Buyer harmless
against any and all claims, losses, damages, liabilities, costs and expenses
incurred by Buyer or any of its Affiliates as a result of any failure to comply
with any such "bulk sales", "bulk transfer" or similar laws.
SECTION 13.11. CAPTIONS. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
SECTION 13.12. DISCLOSURE SCHEDULES. (a) The parties acknowledge and
agree that (i) the Schedules to this Agreement may include certain items and
information solely for informational purposes for the convenience of Buyer and
(ii) the disclosure by Seller of any matter in the Schedules shall not be deemed
to constitute an acknowledgment by Seller that the matter is required to be
disclosed by the terms of this Agreement or that the matter is material.
(b) After the date hereof, Seller may make such investigations and
conduct such due diligence with respect to environmental matters set forth on
Schedule 11.02(c), including, without limitation, the Hatboro facility, the
costs of such investigation to be for the account of Seller. Buyer agrees to
review with Seller the results of such investigations and due diligence, and
Buyer and Seller agree to use good faith efforts to make such modifications to
Schedule 11.02(c) as are appropriate based on such review. In the event that
Buyer and Seller agree on any amendments to Schedule 11.02(c), Schedule 11.02(c)
attached to this Agreement as of the date hereof shall be deemed to be
superseded by the revised Schedule 11.02(c).
60
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
TYCO GROUP S.a.r.l.
By: ____________________________
Name:
Title:
THOMAS & BETTS CORPORATION
By: ____________________________
Name:
Title:
ANNEX A
REORGANIZATION
1. Seller will contribute all U.S. assets primarily related to the
Business to Augat Inc. The parties will mutually agree in good
faith on steps of the Reorganization regarding contributions
before such contributions are made.
2. Seller will cause all assets not primarily related to the
Business to be transferred out of Acquired Subsidiaries.
3. Seller will move intercompany receivables/payables, intercompany
loans, external debt (except as otherwise agreed between Seller
and Buyer) and cash, cash equivalents, marketable securities and
similar investments out of Acquired Subsidiaries; PROVIDED that
Seller may leave up to $5,000,000 in the aggregate of cash in the
Acquired Subsidiaries at Closing; and PROVIDED FURTHER, that if
more than $5,000,000 in the aggregate of cash is left in the
Acquired Subsidiaries at Closing, Seller shall indemnify Buyer
and its Affiliates for any costs, including, without limitation,
Taxes in repatriating such amount of cash in excess of
$5,000,000.
A-1
ANNEX B
PURCHASED ASSETS
1. The issued and outstanding capital stock or other equity interest of
each Acquired Subsidiary (it being understood that the capital stock
and LLC interests of Augat Wiring Systems, Inc. and Exemplar/T&B
Electrical Systems LLC, respectively, will not be transferred
directly, but will be transferred indirectly by virtue of the transfer
of the capital stock of Augat Inc.
2. Certain assets of Thomas & Betts Europe CV including the inventory and
payables from the product lines listed on Annex F and trade
receivables from customers in the "TOPS" system coded: AU, NA, DI, OE,
DA, ED, EO, GD, GO, NE and NI.
3. Certain leasehold improvements of Thomas & Betts Monterrey including a
warehouse of 38,732 square feet and the mobile communications building
of 30,000 square feet.
4. Business Intellectual Property Rights.
5. The assets of the Taiwan sales branch
6. Certain assets of T&B Corporation physically located at the T&B
maquiladoras. The assets are the property, plant and equipment related
to the product lines listed in Annex F. These assets are to be
specifically purchased by an entity operating a maquiladora in Mexico.
7. Certain assets (trade receivables and inventory) of T&B Ltd. (Canada)
from the product lines listed in Annex F. These assets may be
contributed to a Canadian subsidiary and the stock of that subsidiary
may be the asset sold.
8. The leasehold improvements related to the warehouse located in Luton
UK owned by T&B Ltd. (UK)
9. Inventory, accounts payable and PPE of Amerace Inc. related to the
Agastat product line number 056 and accounts receivable from customers
in the "TOPS" system coded: AU, NA, DI, OE, DA, ED, EO, GD, GO, NE and
NI.
10. Accounts payable and PPE of the Bluffton and Grapevine sales offices
owned by T&B
B-1
B-2
ANNEX C
EXCLUDED ASSETS
1. Cash, cash equivalents, marketable securities and similar investments,
except to the extent reflected in Closing Working Capital.
2. Intercompany accounts.
3. The Thomas & Betts name and marks and Intellectual Property Rights
that are not Business Intellectual Property Rights.
4. T&B Hungary - The plant located at Kecskemet Hungary excluding the
property plant and equipment related to the product lines listed in
Annex F.
5. T&B Japan Ltd. - All machinery and equipment not related to product
lines listed in Annex F.
6. T&B GmbH - All machinery and equipment not related to product lines
listed in Annex F.
7. Augat Inc - Furniture and Fixtures that are located at the T&B
headquarters building in Memphis and assets listed on the Augat Inc.
HQ Memphis ledger.
8. Augat Inc. - two stamping machines located at the Boyne facility.
9. Augat Inc. - Telecom and non-insert CATV molding machines located at
the Clinton facility.
10. T&B - Mini C assembly machines and associate premise wiring equipment
located at the Irvine facility.
11. All inventory and accounts payable related to product lines not listed
in Annex F and accounts receivable not from customers in the "TOPS"
system coded: AU, NA, DI, OE, DA, ED, EO, GD, GO, NE and NI.
12. The issued and outstanding capital stock of Thomas & Betts Euro
Distribution S.A., Thomas & Betts European Centre, and Thomas & Betts
Euro Service Centre (other than inventory described on Annex B, which
inventory is owned by Thomas & Betts Europe CV).
C-1
13. The non-operating facility at 33 Perry Avenue in Attleboro, MA and
property at Canton, MA.
14. All rights under previously maintained or existing insurance policies
of Seller or any of its Affiliates with respect to matters for which
Seller or any Affiliate of Seller (i) has incurred or may incur out-of
pocket costs (including, without limitation, those matters set forth
on Schedule 3.12), or (ii) have a contractual obligation to indemnify
a third party (including, without limitation, Buyer or any of its
Affiliates).
15. All claims, causes of action or other rights of Seller or any of its
Affiliates arising out of the matters described below:
(a) TDI Batteries (T&B) v. Mpower, et al.
(b) T&B v. Vargas and Ock.
(c) AEA Technology v. T&B
C-2
ANNEX D
ASSUMED LIABILITIES
All obligations, contracts and liabilities of Seller or any subsidiary
of Seller of any kind, character or description (whether known or unknown,
accrued, absolute, contingent or otherwise) primarily relating to or arising out
of the conduct of the Business, except for the Excluded Liabilities, including
without limitation, all liabilities and obligations of each Acquired Subsidiary.
D-3
ANNEX E
EXCLUDED LIABILITIES
1. Any liability or obligation of Seller or any Seller
Designee in respect of any United States Tax; PROVIDED that Transfer
Taxes incurred in connection with the transactions contemplated by this
Agreement shall be paid in the manner set forth in Section 8.03 hereof.
2. Any liability or obligation relating to employee benefits
or compensation arrangements existing on or prior to the Closing Date
with respect to any Excluded Employee, Business Employee or former
Business Employee to the extent provided in Article 9.
3. Any indebtedness for borrowed money (other than trade
payable incurred in the ordinary course of business) and any prepayment
penalty relating to such indebtedness of Thomas & Betts Japan, Ltd.
(whether incurred at or after the Closing), other than any indebtedness
for borrowed money deducted from the Purchase Price pursuant to Section
2.06.
4. Any liability or obligation relating to an Excluded Asset.
5. Any liability or obligation related to any action, suit,
investigation or proceeding pending against the Business before any
court or arbitrator or any governmental body, agency or official prior
to the Closing (including, without limitation, those actions set forth
on Schedule 3.08(a)).
6. Any liability or obligation arising out of the following:
(i) any event occurring prior to the Closing resulting
in personal injury, sickness, death or property
damage or destruction or loss of use of property
arising out of or resulting from the operation of
the Business by Seller or any of the Acquired
Subsidiaries; PROVIDED that any such personal
injury, sickness, death or property damage or
destruction is covered by insurance policies
maintained by or for the benefit of Seller or any
of its Affiliates as of the date of the event
giving rise to such liability (determined without
regard to any deductibles, self-insured
retentions, retroactive
E-1
premium adjustments or claims which are not paid
pursuant to a reservation of rights);
(ii) any breach of contract by Seller or any of the
Acquired Subsidiaries to the extent such claim is
asserted in writing to Seller or an Acquired
Subsidiary by a third party prior to the Closing;
(iii) any workers' compensation claim arising from the
operation of the Business by Seller or any of the
Acquired Subsidiaries prior to the Closing; and
(iv) any personal injury, sickness, death or property
damage or destruction resulting from occurrences
occurring prior to the Closing arising out of a
defect of products manufactured or sold by Seller
prior to the Closing including, without
limitation, any such liabilities or obligations
for defects in design or failure to warn.
7. Any liability or obligation arising out of Item 1 described
on Schedule 3.23.
E-2
ANNEX F
PRODUCT LINES
PRODUCT LINE DESCRIPTION
041 IDC CONNECTORS
042 2 PC
043 MISC PCB CONNECTIONS (INCL. SMART CARD)
044 ACTIVE CONNECTORS
045 FLEX
046 CARD EDGE
047 AUTO CONNECTORS
048 D SUBS
049 IDC CABLE
055 BUCHANAN TERMINAL BLOCK
056 RELAYS/TIMERS - AGASTAT
062 AG SOCKETS
063 AG SWITCHES
064 AG CONNECTORS
065 AG TERM BLOCK
067 AG ETI
068 MPI
078 AUTO COMPONENTS
079 AUTO WIRING HARNESS
080 TRIAD
092 NETWORK CONNECTORS
094 CABLES ASSEMBLIES
802 DISK DRIVES
803 AUTO FLEX
804 AG COMPONENTS
805 AG WIRING
820 BATTERY PACKS (TDI)
985 OTHER ELECTRONICS
F-1
ANNEX G
BUYER'S KNOWLEDGE
1. Richard Brann Managing Director of Buyer
2. Erik Lazar Managing Director of Buyer
G-1
ANNEX H
SELLER'S KNOWLEDGE
1. Clyde R. Moore Chairman, President and Chief Executive Officer
2. T. Roy Burton President - Electronics/OEM Group
3. Jerry Kronenberg Vice President General Counsel and Secretary
4. David Alyea Group Controller - Electronics
5. William Strobel President - Professional Electronics Division
6. Robert Crumley President - Automotive Division
7. Michael Kirkman MPI - Business Manager
8. David Redfern TDI - Division Manager
9. W. David Smith Chief Commercial Counsel
10. Penelope Y. Turnbow Assistant Secretary and Corporate Counsel
11. Michael Hoelter Chief Patent Counsel
12. Michael Geiger Chief Environmental Counsel
13. John R. Janulis Vice President - Controller
14. Joe Warren Vice President - Taxes
15. Om Chopra Head of Environmental
16. Connie Muscarella Vice President - Human Resources
H-1
ANNEX I
ACQUIRED SUBSIDIARIES
Domestic Acquired Subsidiaries:
16. Augat Inc., a Massachusetts corporation.
17. Augat Wiring Systems Inc., an Alabama corporation.
Foreign Acquired Subsidiaries:
1. Thomas & Betts Hong Kong Limited, a Hong Kong company.
2. Thomas & Betts Japan, Ltd., a Japanese company.
3. Thomas & Betts (S.E. Asia) Pte. Ltd., a Singapore company.
4. Thomas & Betts Malaysia Sdn. Bhd., a Malaysian company.
5. Thomas & Betts Hermosillo S. de R.L. de C.V., a Mexican company.
6. Thomas & Betts France S.A., a French corporation.
7. Thomas & Betts GmbH, a German limited liability company.
8. Thomas & Betts Hungary Kft., a Hungarian company.
9. Thomas & Betts s.r.l., an Italian limited liability company.
10. Thomas & Betts (Luxembourg) S.A., a Luxembourg company.
11. Thomas & Betts Switzerland A.G., a Swiss corporation.
12. Thomas & Betts AB Sweden, a Swedish corporation.
13. TDI Batteries (Europe) Limited, a U.K. company.
I-1
ANNEX J
TRANSITIONAL SERVICES AGREEMENT TERM SHEET
PART A.
PROVIDER: Thomas & Betts Corporation ("TNB")
PURCHASER: Tyco Group S.a.r.l ("TYCO")
SERVICES: 1. Payroll and benefits provision and
administration, including continued coverage under
any Employee Plans or International Plans (as
defined in the Purchase Agreement), provided that
Seller shall be obligated only to use its best
efforts to provide coverage during the transition
period under the Seller's Section 401k plans.
2. Accounting and other MIS support, including but
not limited to TOPS order entry and processing,
Oracle reports support, and Data Warehouse
services, including electronic communication
support (E.G., e-mail and internet access).
3. Manufacturing, warehousing, and distribution
services.
4. Such other services (which may include
subleases on terms similar to those being provided
to Seller) the parties may agree are reasonably
necessary in connection with the transition of the
Business from TNB to Tyco.
Such services shall be provided at the following
shared locations during the transition period:
Attleboro
Darmstadt
Tokyo
Sendai
Singapore
Rungis
Milano
Luton
Osaka/Nagoya
Brooksville
J-1
LutonRhodes St. Goegnies
La Louviere
TERM OF For payroll and benefits provision and
SERVICES: administration, a term from the Closing Date until
December 31, 2000. For all other transition
services, an initial term of four months from the
Closing Date, with an additional two month term
upon 30 days prior written notice.
CANCELLATION Any or all transition services may be cancelled by
OF SERVICES: Tyco at anytime during the term upon 30 days prior
written notice.
PRICING: During the initial term, Tyco to pay TNB's
fully-burdened (i.e., including allocated overhead)
cost plus (i) any and all taxes assessed on the
provision of the services without offset or
deduction, and (ii) unbudgeted capital expenditures
necessary in order to provide the services. During
any extensions of the initial term, Tyco to pay
fully-burdened cost plus 5% (as well as any amounts
described in (i) or (ii) of the preceding
sentence).
PAYMENT TERMS: Monthly invoicing, with payment due 30 days from
receipt of invoice.
THIRD PARTY TNB will not provide services for which it is
CONSENTS: unable to obtain any necessary third-party consent.
TNB shall use reasonable efforts to obtain such
consents. All reasonable out-of-pocket expenses
incurred in obtaining any such consent shall be
reimbursed by Tyco.
CONFIDENTIALITY: Mutual confidentiality and non-use provisions.
TERMINATION: By either party upon material breach of agreement
that is not cured within a reasonable amount of
time upon written notice.
GOVERNING LAW/DISPUTE New York law. Disputes as to cost/reimbursement
RESOLUTION: matters to be submitted to independent "big-four"
accounting firm (other than current accountants of
TNB
J-2
and Tyco). All other disputes to be submitted to
AAA arbitration.
PART B.
PROVIDER: Tyco
PURCHASER: TNB
SERVICES: 1. Subleases and the provisions of related
services (e.g., utilities).
2. Such other services as the parties may agree
are reasonably necessary in connection with the
transition of the Business from TNB to Tyco.
Such services shall be provided at the following
shared locations during the transition period:
Attleboro
Darmstadt
Tokyo
Sendai
Singapore
Rungis
Milano
Luton
Osaka/Nagoya
Brooksville
Luton
Rhodes St. Goegnies
La Louviere
TERM OF An initial term of four months from the Closing
SERVICES: Date, with an additional two month term upon 30
days prior written notice.
CANCELLATION Any or all transition services may be cancelled by
OF SERVICES: TNB at anytime during the term upon 30 days prior
written notice.
PRICING: With respect to subleases and related services, TNB
to pay the proportionate share of rent and related
costs based on the proportion of floor space
subleased in
J-3
each location. With respect to any other services,
during the initial term, TNB to pay Tyco's
fully-burdened (i.e., including allocated overhead)
cost plus (i) any and all taxes assessed on the
provision of the services without offset or
deduction, and (ii) unbudgeted capital expenditures
necessary in order to provide the services. During
any extensions of the initial term, TNB to pay
fully-burdened cost plus 5% (as well as any amounts
described in (i) or (ii) of the preceding
sentence).
PAYMENT TERMS: Monthly invoicing, with payment due 30 days from
receipt of invoice.
THIRD PARTY Tyco will not provide services for which it is
CONSENTS: unable to obtain any necessary third-party consent.
Tyco shall use reasonable efforts to obtain such
consents. All reasonable out-of-pocket expenses
incurred in obtaining any such consent shall be
reimbursed by TNB.
CONFIDENTIALITY: Mutual confidentiality and non-use provisions.
TERMINATION: By either party upon material breach of agreement
that is not cured within a reasonable amount of
time upon written notice.
GOVERNING LAW/DISPUTE New York law. Disputes as to cost/reimbursement
RESOLUTION: matters to be submitted to independent "big-four"
accounting firm (other than current accountants of
TNB and Tyco). All other disputes to be submitted
to AAA arbitration.
J-4
CROSS-REFERENCE TARGET LIST
NOTE: DUE TO THE NUMBER OF TARGETS SOME TARGET NAMES MAY NOT APPEAR IN THE
TARGET PULL-DOWN LIST.
(This list is for the use of the wordprocessor only, is not a part of this
document and may be discarded.)
ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME
=========================== ===========================
1.........................def.art 5....................cov.sell.art
1.01..........................def 5.01...............sell.cond.busi
1.01(a)..................term.def 5.01(a)..............buy.not.acqu
1.01(b).................term.list 5.01(b)...........buy.sell.assets
2..................purch.sale.art 5.01(c)............buy.not.commit
2.01................pur.and.sales 5.01(i).....sel.not.make.tax.elec
2.02....................ex.assets 5.02...................acc.inform
2.03.....................ass.liab 5.02(a)..........full.access.info
2.04..................exclud.liab 5.02(b)...........access.to.books
2.05..............assign.cont.rts 5.03............not.of.cer.events
2.06............pur.prc.all.purch 5.03(a)............person.conesnt
2.06..................purch.price 5.03(b)..........gov.regul.agency
2.07......................closing 5.03(c)........actions.threatened
2.07(a)(ii).....assign.assump.agt 5.05......................non.com
2.08...............clos.bal.sheet 6.....................cov.buy.art
2.08(a)............As.promptly.as 6.01...............confientiality
2.08(b)........if.seller.disagree 6.02.......................access
2.08(c)............if.a.notice.of 6.03...................trademarks
2.08(d).........acct.coop.bal.sht 6.03(a)(v)..........trademark a.v
2.09..............adj.purch.price 6.03(a)(vi)........trademark.a.vi
2.09(a).........if.base.net.worth 7....................cov.buy.sell
2.09(c)............meth.of.paymnt 7.01...........best.efforts.furth
3....................rep.war.sell 7.02.................cert.filings
3.01..................corp.exist. 7.03..............public.announce
3.02..............sell.corp.autho 7.04.....................warn.act
3.03..................gov't.auth. 7.06..............not.occ.non-occ
3.04...............noncontravent. 8.....................tax.matters
3.05..................req.consent 8.01.........................defs
3.06(b)...................all.out 8.02......................tax.rep
3.06(b)(i)................out.sec 8.03..............pur.price.alloc
3.06(b)(ii)...............out.opt 8.03(a).........pur.price.alloc.a
3.06(c)..............none.sub.own 8.03(b).........pur.price.alloc.b
3.07................mat.contracts 8.03(c).........pur.price.alloc.c
3.07(a)..........except.contracts 8.03(d).........pur.price.alloc.d
3.07(b).........each.contract.dis 8.03(e).........pur.price.alloc.e
3.08.....................sell.lit 8.03(g).........pur.price.alloc.h
3.08(a)...................litig.a 8.04..................tax.sharing
3.08(b)...................litig.b 8.05.............coop.tax.matters
3.09.................comp.w.laws. 8.06..............Indem.by.seller
3.10...................properties 8.06(a)...................indem.a
3.10(a)............sell.real.prop 8.06(b)...................indem.b
3.10(b)............sell.has.title 8.06(c)..........demand.for.taxes
3.10(b)(i)......liens.dis.bal.sht 8.06(d)...................indem.e
3.10(b)(ii).....liens.tax.not.due 8.07..............seller.survival
3.10(b)(iv).....liens.not.detract 9....................emp.bene.art
3.11...................intel.prop 9.01..........Empl.Offers.of.empl
3.12......................ins.cov 9.01(a)..........transferred.empl
3.13.................finders.fees 9.01(b)..........coll.bargain.agt
3.14...............sell.employees 9.01(c).........empl.benefit.plan
3.15.............employ.ben.plans 9.01(d).....oblig.of.col.barg.agt
3.16....................labor.mat 9.02.................seller.plans
3.16(a).........employmt.practice 9.02(a).........seller.401k.plans
3.17...............environ.compl. 9.02(b).....seller.responsibility
3.17(a)(i).........no.writ.notice 9.03............third.party.benef
3.17(a)(ii)sell.obtain.all.env.perm 9.04................exclud.employ
3.17(a)(iii), 3.17(a)(iv)no.environ.invest 10......................cond.clos
3.17(b).......................001 10.01(a)...............clo.con(a)
3.19.................power.attorn 10.01(b)..........notwithstanding
3.23................prod.lib.recl 10.02..............cond.oblig.buy
3.23(a).............reliability.a 10.02(a)..........sell.perf.oblig
4.....................rep.war.buy 10.02(a)(ii)....rep.war.sell.true
4.01...............org.and.exist. 10.02(b)............rec.sell.docs
4.02...............buy.corp.autho 10.02(d)......................003
4.03................buy.gov.autho 10.03.............cond.oblig.sell
4.04...........sec.noncontravent. 10.03(a).......buy.perf.all.oblig
4.05....................buy.finan 10.03(b)........sell.rec.all.docs
4.06...............buy.litigation 11.................surv.indem.art
4.07.............buy.finders.fees 11.01....................survival
4.08..................inspections 11.02.............indemnification
ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME
=========================== ===========================
11.02(a)............seller.hereby
11.02(a)(i).........dam.misrepres
11.02(a)(ii)...dam.misrepresen.ii
11.02(b).............buyer.hereby
11.02(b)(i)misrep.breach.warranty
11.02(b)(ii)...dam.misreprese.iii
11.02(c)..........buyer.hereby(c)
11.02(c)(i)...................005
11.02(c)(ii)(A)...............007
11.02(c)(ii)(B)...............009
11.02(c)(ii)(C)...............011
11.03..................procedures
11.03(a)..............indem.party
11.03(b)..............third.party
11.03(c)......indem.party.control
11.03(d)...............party.coop
11.03(f)(ii)..................013
11.03(f)(v)...........seller.oblg
11.04................calc.damages
11.04(a)..........dam.indem.party
11.04(b).........indem.party.liab
11.05...............assign.claims
11.06.................exclusivity
12.......................term.art
12.01................grounds.term
12.01(a)...............mutual.agt
12.01(b)..........clos.not.consum
12.01(c)............trans.illegal
12.02.................effect.term
14........................litig.a
13.......................misc.art
13.01.....................notices
13.02.................amend.waive
13.02(a)...........any.prov.amend
13.02(b)...........no.delay.waive
13.03....................expenses
13.04................succ.assigns
13.05...............governing.law
13.06................jurisdiction
13.07...........waiver.jury.trial
13.08................counterparts
13.09..................entire.agt
13.10.............bulk.sales.laws
13.11....................captions
14........................litig.b
ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME
=========================== ===========================
ARTICLE/SECTION TARGET NAME ARTICLE/SECTION TARGET NAME
=========================== ===========================
J-2