\nPLU Gmb 6.8(q)
\nPre-Closing Customer Contract Claims 2.4(a)(iv)
\nPre-Closing Campaign Claims 2.4(a)(iii)
\nPreliminary Transfers 2.1(a)
\nProduct Liability Claims 2.4(a)(viii)
\nPurchase Price 2.5(a)
\nRCRA 1.1
\nRegulations 6.8(a)(ii)
\nRegulatory Amount 6.8(f)
\nRepresented Employees 6.8(d)(iii)
\nResidual Purchase Price 2.7(a)
\nRetained Assets 2.3(b)
\nRetiree Plan 4.13
\nRevised Allocation 2.7(a)
\nShared Campaign Claims 2.4(a)(iii)
\nSingapore Transferred Employees 6.8(p)
\nSGA 6.8(o)
\nStock Savings Plan 6.8(d)(ii)(B)
\nSuperannuation 6.8(o)
\nSuperannuation Commitment 6.8(o)
\nTax Act 6.8(o)
\nThreshold 9.4(a)
\nTowers Report 6.8(u)
\nTransfer Amount 6.8(u)
\nTransfer Consents 6.8(u)
\nTransfer Consent Period 6.8(u)
\nTRW Preamble
\nTRW Canadian Salaried Pension Plan 6.8(f)
\nTRW Disclosure Letter Article IV
\nTRW PBO 6.8(u)
\nTRW U.S. Salaried Pension Plan 6.8(d)
\nTRW’s Allocation 2.7(a)
\nTRW’s Appraisal 2.7(a)
\nTRW’s Appraiser 2.7(a)
\nTransfer Amount 6.8(f)
\nTransfer Date 6.8(f)
\nTransfer Taxes 6.6(a)(i)
\nTransferred Employee 6.8(b)
\nTransition Agreement 6.11(a)
\nUK Affected Employees 6.8(a)
\nUK Transferred Employees 6.8(e)
\nunadjusted Transfer Amount 6.8(u)
\nURL 1.1
\nUS Transferred Employees 6.8(d)
\nUnion 401(k) Plan 6.8(d)(iii)
\nWelfare Benefits 6.8(c)
\n<\/c><\/s><\/table>\n 13<\/p>\n
ARTICLE II<\/p>\n
PRELIMINARY TRANSFERS; SALE AND PURCHASE OF ASSETS<\/p>\n
Section 2.1 Preliminary Transactions.<\/p>\n
(a) Prior to the transfers and conveyance of Assets pursuant
\nto the terms of this Article II, TRW shall complete the internal restructuring
\ntransactions and transfers set forth on Schedule 2.1 after receiving all
\nnecessary clearances from the UK Inland Revenue (collectively, the “Preliminary
\nTransfers”).<\/p>\n
(b) In completing the Preliminary Transfers, TRW will not be
\npermitted to modify or deviate from the Preliminary Transfers without the prior
\nwritten consent of Buyer, which consent shall not be unreasonably withheld or
\ndelayed; provided, however, that TRW shall furnish to Buyer all information
\nreasonably necessary to assess the effect on Buyer of any such modification or
\ndeviation. Buyer shall promptly provide TRW with the basis for any withholding
\nof a consent pursuant to the preceding sentence.<\/p>\n
(c) Without limiting the foregoing subsections of this
\nSection 2.1, and notwithstanding anything to the contrary in Section 6.1 hereof,
\nTRW may, in its sole discretion, cause any Aerospace Subsidiary or Aerospace
\nAffiliate to make a distribution of any Retained Assets prior to the Closing.
\nBuyer shall cause any such assets that are not distributed prior to the Closing
\nto be transferred by such Aerospace Subsidiary or Aerospace Affiliate to TRW at
\nor, to the extent not included in the Net Asset Value on the Closing Balance
\nSheet, after the Closing.<\/p>\n
(d) Without limiting the foregoing subsections of this
\nSection 2.1, and notwithstanding anything to the contrary in Section 6.1 hereof,
\nTRW may, in its sole discretion, cause any Aerospace Subsidiary or Aerospace
\nAffiliate to make a distribution of cash, cash equivalents and notes prior to
\nthe Closing. Buyer shall cause any such assets that are not distributed prior to
\nClosing to be transferred by such Aerospace Subsidiary or Aerospace Affiliate to
\nTRW at or, to the extent not included in the Net Asset Value on the Closing
\nBalance Sheet, after the Closing.<\/p>\n
Section 2.2 Sale of Equity Interests. Subject to the terms and
\nconditions of this Agreement, at the Closing, TRW shall, and shall cause the
\nother TRW Selling Shareholders to, sell, transfer, convey, assign and deliver to
\nBuyer and Buyer shall purchase, acquire and accept from TRW or the applicable
\nTRW Selling Shareholder all of the equity interests of the Aerospace
\nSubsidiaries and Aerospace Affiliates as set forth on Schedule 2.2 hereof held
\nby such TRW Selling Shareholder (the “Equity Interests”). At the Closing, Buyer
\nshall assume all liabilities and obligations arising out of or resulting from
\nthe ownership of the equity interests of the Aerospace Affiliates on and after
\nthe Closing Date, except for those liabilities that relate to TRW or its<\/p>\n
14<\/p>\n
Subsidiaries breaching or failing to perform an obligation on or before the
\nClosing Date, pursuant to the agreements relating to such equity ownership.<\/p>\n
Section 2.3 Transfer of Assets; Retained Assets.<\/p>\n
(a) Subject to the terms and conditions of this Agreement
\nand the Ancillary Agreements, at the Closing, TRW shall, and shall cause the
\nAsset Selling Subsidiaries identified on Schedule 2.3(a) to, sell, convey,
\nassign, transfer and deliver to Buyer and Buyer shall purchase, acquire and
\naccept (x) from TRW, all of TRW’s right, title and interest in and to the
\nrights, properties and assets, other than the Retained Assets and the Equity
\nInterests, which are used or held for use primarily in the Business, tangible
\nand intangible, wherever located and (y) from the Asset Selling Subsidiaries,
\nall of the Asset Selling Subsidiaries’ right, title and interest in and to the
\nrights, assets and properties, other than the Retained Assets and the Equity
\nInterests, which are used or held for use primarily in the Business, tangible
\nand intangible, wherever located (each and all such items being herein referred
\nto as the “Acquired Assets”), including all of such right, title and interest to
\nthe following:<\/p>\n
(i) all books of account, general, financial, tax
\n and personnel records for the Affected Employees which become employees
\n of Buyer or its Subsidiaries, invoices, shipping records, supplier
\n lists, correspondence and other documents, records and files and any
\n rights thereto owned by TRW or the Asset Selling Subsidiaries (including
\n those stored in electronic format), and used or held for use primarily
\n in the Business, other than organizational documents, minute and stock
\n record books and the corporate seals of TRW and the Asset Selling
\n Subsidiaries and other than as provided in Section 2.3(b)(iv);<\/p>\n
(ii) all sales and promotional literature, customer
\n lists and other sales-related materials used or held for use primarily
\n in the Business;<\/p>\n
(iii) all Receivables other than those referred to in
\n Section 2.3(b)(ii) which primarily relate to the Business;<\/p>\n
(iv) prepaid expenses, deferred charges, advance
\n payments, and similar items of the type reflected on the Reference
\n Balance Sheet which primarily relate to the Business;<\/p>\n
(v) all Inventories used or held for use primarily
\n in the Business by TRW or an Asset Selling Subsidiary;<\/p>\n
(vi) all Owned Real Property used or held for use
\n primarily in the Business by TRW or an Asset Selling Subsidiary and all
\n Leased Real Property used or held for use primarily in the Business by
\n TRW or an Asset Selling Subsidiary;<\/p>\n
15<\/p>\n
(vii) all Equipment used or held for use primarily in
\n the Business by TRW or an Asset Selling Subsidiary;<\/p>\n
(viii) subject to Section 6.5 hereof, Contracts
\n primarily related to the Business or to which the Acquired Assets are
\n subject, including (A) all orders, contracts, and commitments for the
\n purchase or use of goods and services primarily for the benefit of the
\n Business; (B) all rights under all bids and offers that primarily relate
\n to the Business; (C) all awards, orders, contracts, commitments, and
\n proposals for the design, development, manufacture or sale of
\n Inventories that primarily relate to the Business; (D) all
\n distributorship agreements, sales agency agreements, teaming, and
\n similar business alliance agreements relating to the design,
\n manufacture, sale and distribution of Inventories for use primarily in
\n the Business; and (E) all other assignable contracts, licenses,
\n sublicenses, agreements, leases and commitments used or held for use
\n primarily in the Business, including all agreements with individual
\n Affected Employees assumed by Buyer pursuant to Section 6.8(i)
\n (collectively, the “Assumed Contracts”);<\/p>\n
(ix) all existing claims and other rights arising
\n from the performance or breach by third parties of their obligations
\n under the Assumed Contracts;<\/p>\n
(x) all Transferred Intellectual Property, subject
\n to the terms of Section 6.14 herein;<\/p>\n
(xi) to the extent transferable, all Permits issued
\n by any Governmental Entity used or held for use primarily in the
\n Business by TRW or any of the Asset Selling Subsidiaries and all
\n applications therefor;<\/p>\n
(xii) all existing causes of action, judgments,
\n claims, reimbursements and demands, of whatever nature (including rights
\n under and pursuant to all warranties, representations and guarantees
\n made by suppliers of products, materials or Equipment, or components
\n thereof) and rights to insurance proceeds (to the extent such rights to
\n insurance proceeds are allocated to Buyer in the Insurance Agreement) in
\n favor of TRW or the Asset Selling Subsidiaries other than those
\n specified in Section 2.3(b)(vi);<\/p>\n
(xiii) all Plan assets transferred to Buyer pursuant to
\n Section 6.8, or held in connection with any Assumed Plan; and<\/p>\n
(xiv) all hedging Contracts that primarily relate to
\n the Business, as set forth on Schedule 2.3(a)(xiv); provided that TRW
\n shall be solely responsible for any fees, penalties or other
\n consideration in connection with obtaining any novations (or
\n replacements of such contracts on the same economic terms and
\n conditions) of such contracts.<\/p>\n
16<\/p>\n
(b) Notwithstanding Section 2.3(a), the term “Acquired
\nAssets” shall not include the following (each and all such items other than
\nEquity Interests being herein referred to as “Retained Assets”), but only to the
\nextent not included in the Net Asset Value for purposes of the Closing Balance
\nSheet:<\/p>\n
(i) all cash and cash equivalent items, including
\n but not limited to such items held by or for the account of TRW and the
\n Asset Selling Subsidiaries, whether or not arising from the conduct of
\n the Business, including, without limitation, demand accounts,
\n certificates of deposit, time deposits, marketable securities,
\n negotiable instruments and the proceeds of accounts receivable paid on
\n or prior to the Closing Date;<\/p>\n
(ii) all intercompany accounts receivable and notes
\n for those accounts receivable and notes where the obligor is TRW or any
\n Affiliate of TRW which will remain an Affiliate of TRW after the
\n consummation of the transactions contemplated by this Agreement;<\/p>\n
(iii) the Licensed Trademarks and Licensed
\n Intellectual Property and all other Excluded Intellectual Property;<\/p>\n
(iv) any records which TRW or any Asset Selling
\n Subsidiary is required by law to retain in its possession or any records
\n for which it is the business custom to retain; provided in each case
\n that a copy of any such record shall be furnished to Buyer;<\/p>\n
(v) all causes of action, judgments, claims,
\n reimbursements and demands, of whatever nature (including rights under
\n and pursuant to all warranties, representations and guarantees made by
\n suppliers of products, materials or Equipment, or components thereof),
\n in favor of TRW or any Asset Selling Subsidiary to the extent related to
\n the Retained Assets and the Excluded Liabilities;<\/p>\n
(vi) any claims under insurance policies maintained
\n by TRW or the Asset Selling Subsidiaries to the extent related to
\n Retained Assets or Excluded Liabilities or to the extent allocated to
\n TRW or the Asset Selling Subsidiaries pursuant to the Insurance
\n Agreement;<\/p>\n
(vii) all other rights, property interests (whether
\n real or personal) and assets (whether tangible or intangible) of TRW and
\n its Affiliates that are not primarily used or held for use in the
\n Business;<\/p>\n
(viii) such other rights, properties and assets set
\n forth on Schedule 2.3(b) hereto;<\/p>\n
(ix) except as may be provided in Section 6.8 hereof
\n and except for assets held in connection with any Assumed Plan, any
\n agreement with any individual Affected Employee or any claim to any
\n surplus assets in any retirement plan or trust for same; and<\/p>\n
17<\/p>\n
(x) the Real Property set forth on Schedule
\n 2.3(b)(x).<\/p>\n
Section 2.4 Assumption of Liabilities; Excluded Liabilities.<\/p>\n
(a) Subject only to the provisions of this Agreement, at the
\nClosing, Buyer shall assume and agree to pay, perform and discharge when due,
\nonly the following liabilities and obligations of TRW or the Asset Selling
\nSubsidiaries (the “Assumed Liabilities”):<\/p>\n
(i) all accrued liabilities and obligations in
\n categories that are reflected on both the Reference Balance Sheet and
\n the Closing Balance Sheet, but only to the extent such accrued
\n liabilities and obligations are set forth on the Closing Balance Sheet;<\/p>\n
(ii) all liabilities and obligations under the
\n Assumed Contracts to the extent relating to performance after the
\n Closing;<\/p>\n
(iii) solely to the extent provided in this Section
\n 2.4(a)(iii), liabilities and obligations arising out of, resulting from,
\n or relating to customer claims which have not been resolved or settled
\n prior to the Closing Date, including but not limited to those claims
\n seeking return, replacement, modification and\/or repair of products sold
\n by the Business either pursuant to express product warranties extended
\n by a TRW Participant prior to the Closing Date or product warranties or
\n obligations implied or provided by law or pursuant to contractual claims
\n of design or manufacturing defects including, without limitation,
\n contractual claims arising from an event or events arising out of a
\n recall or “rollover” of a product designed, manufactured or sold by TRW
\n or the Asset Selling Subsidiaries prior to the Closing Date (such claims
\n collectively, “Pre-Closing Campaign Claims”); provided that with respect
\n to all liabilities and obligations arising out of, resulting from, or
\n relating to Pre-Closing Campaign Claims that are asserted within five
\n years following the Closing Date, that are required to be paid and that
\n relate solely to products shipped by a TRW Participant prior to the
\n Closing Date (“Shared Campaign Claims”), to the extent that liabilities
\n for such Shared Campaign Claims payable to third parties for repair or
\n replacement of products (at standard manufacturing cost), in the
\n aggregate, exceed $6,082,000, TRW and Buyer shall share equally the next
\n $2,000,000 of such Shared Campaign Claims in excess of $6,082,000 (but
\n only to the extent of such excess); provided, further, that to the
\n extent such Shared Campaign Claims exceed $8,082,000, TRW shall be
\n solely liable for such excess; and provided, further, that Buyer shall
\n manage such Shared Campaign Claims in accordance with the procedures set
\n forth in Section 6.22 hereof;<\/p>\n
(iv) solely to the extent provided in this Section
\n 2.4(a)(iv), liabilities and obligations arising out of, resulting from,
\n or<\/p>\n
18<\/p>\n
relating to customer claims which have not been resolved or settled
\n prior to the Closing Date relating to breach of contract, including but
\n not limited to claims relating to late delivery or late performance of
\n contract milestones, in each case with respect to products designed,
\n manufactured or sold for the Business by a TRW Participant prior to the
\n Closing Date (such claims collectively, “Pre-Closing Customer Contract
\n Claims”); provided that Buyer and TRW shall share equally any
\n liabilities and obligations to third parties that are asserted within
\n five years following the Closing Date which arise out of, result from,
\n or relate to those Pre-Closing Customer Contract Claims set forth on
\n Schedule 2.4(a)(iv) only to the extent that such liabilities and
\n obligations to third parties, in the aggregate, exceed $6,013,000 but
\n are less than $8,013,000 (but only to the extent of the amount in excess
\n of $6,013,000); provided, further, that to the extent that such
\n liabilities and obligations exceed $8,013,000, TRW shall be solely
\n liable for all such excess (but only to the extent of such excess);
\n provided, further, that Buyer shall have no liability or obligation with
\n respect to any Pre-Closing Customer Contract Claim not set forth on
\n Schedule 2.4(a)(iv); and provided, further, that Buyer shall manage such
\n Pre-Closing Customer Contract Claims in accordance with the procedures
\n set forth in Section 6.22 hereof;<\/p>\n
(v) the first $3,913,000 of Environmental
\n Liabilities, and to the extent that Environmental Liabilities, in the
\n aggregate, exceed $3,913,000 but are less than $8,913,000, one-half of
\n all such Environmental Liabilities in excess of $3,913,000 (and only to
\n the extent of such excess); provided that to the extent Environmental
\n Liabilities, in the aggregate, exceed $8,913,000, Buyer shall assume no
\n liability for the excess of such Environmental Liabilities above such
\n amount. Buyer shall be entitled to manage any proceedings relating to
\n any Environmental Claim and any Remediation arising therefrom; provided
\n that at any time after Buyer ceases to have any further liability with
\n respect to Environmental Liabilities pursuant to this Section 2.4(a)(v),
\n TRW may elect, upon written notice to Buyer, to manage any further
\n Environmental Claim and any further Remediation and shall be entitled to
\n control and appoint lead counsel or consultants for any defense,
\n investigation or remedial action relating to such Environmental Claim or
\n Remediation; provided, further, that in managing any Environmental Claim
\n or Remediation, TRW shall obey all applicable laws, rules, regulations
\n or orders of any Governmental Entity relating thereto and shall not
\n unreasonably interfere, to the extent practicable, with the operations
\n of the Business (and if TRW fails to meet the conditions set forth in
\n this proviso, Buyer shall be entitled to resume the management of
\n Environmental Claims and Remediation). A party’s management of
\n Environmental Claims and Remediation shall be governed by the provisions
\n set forth in Section 6.19(b) hereof. For the avoidance of doubt, this
\n Section 2.4(a)(v) shall not apply to, and Buyer shall have no liability
\n under this Section for,<\/p>\n
19<\/p>\n
any asbestos-related claim or liability, which shall be governed
\n exclusively by Section 2.4(b)(v);<\/p>\n
(vi) all liabilities and obligations expressly
\n assumed by Buyer pursuant to this Agreement and the Ancillary
\n Agreements, including without limitation obligations assumed pursuant to
\n Sections 6.6 and 6.10(b) hereof;<\/p>\n
(vii) all liabilities and obligations under any
\n guarantees issued, granted or provided in connection with the Business
\n as set forth on Schedule 2.4(a)(vii);<\/p>\n
(viii) all liabilities and obligations arising out of,
\n resulting from, or relating to claims, whether founded upon negligence,
\n strict liability in tort, and\/or other similar legal theory, seeking
\n compensation or recovery for or relating to injury to person or damage
\n to property from (x) an event or events occurring after the Closing
\n Date, but arising out of a defect or alleged defect (other than recall
\n or “rollover”) of a product designed, but not manufactured or sold, for
\n the Business by TRW, an Aerospace Subsidiary, an Aerospace Affiliate or
\n an Asset Selling Subsidiary prior to the Closing Date or (y) an event or
\n events occurring on or after May 1, 2004, but arising out of a defect or
\n alleged defect (other than a recall or “rollover”) of a product
\n manufactured or sold for the Business by TRW, an Aerospace Subsidiary,
\n an Aerospace Affiliate or an Asset Selling Subsidiary prior to the
\n Closing Date (such events described in subclauses (x) and (y) are
\n collectively referred to as “Product Liability Claims”), provided,
\n however, that TRW shall purchase the insurance coverage described in
\n Section 6.20(b) hereof;<\/p>\n
(ix) solely to the extent specifically provided in
\n Section 6.8 hereof, obligations of TRW or its Affiliates with respect to
\n Affected Employees; and<\/p>\n
(x) any liabilities arising out of any continuation
\n of conduct, by Buyer, its subsidiaries, that took place as of the
\n Closing Date which had infringed upon or otherwise misappropriated the
\n Intellectual Property rights of another person as of the Closing Date,
\n if such conduct continues following notice to Buyer or its Subsidiaries
\n that such conduct constitutes infringement or misappropriation of the
\n Intellectual Property rights of another Person (provided, however, that
\n nothing in this Section 2.4(a)(x) shall affect Buyer’s ability to seek
\n any remedy for a breach of the representations and warranties contained
\n in Section 4.14 hereof).<\/p>\n
(b) Notwithstanding anything in this Agreement to the
\ncontrary, Buyer shall not assume or be deemed to have assumed, and TRW or the
\nAsset Selling Subsidiaries, as the case may be, shall be solely and exclusively
\nliable with respect to, all liabilities and obligations, whether known or
\nunknown, and, except as specifically noted<\/p>\n
20<\/p>\n
below, whether arising before or after the Closing, of TRW or the Asset Selling
\nSubsidiaries resulting from or related to the Business other than the Assumed
\nLiabilities (collectively, the “Excluded Liabilities”) including the following:<\/p>\n
(i) all intercompany accounts payable and notes
\n existing as of the Closing Date, other than the Ancillary Agreements,
\n where the obligee is TRW or any Affiliate of TRW which will remain an
\n Affiliate of TRW after the consummation of the transactions contemplated
\n by this Agreement;<\/p>\n
(ii) except as specifically provided in Section 6.8,
\n all obligations and liabilities of TRW or its Affiliates with respect to
\n their respective employees (including the Affected Employees) and former
\n employees including, but not limited to, those arising from or relating
\n to their employment with TRW or its Affiliates, or the termination
\n thereof including medical, other health benefits, life insurance plans,
\n pension plans, retiree benefits, workers compensation claims and
\n obligations and liabilities with respect to any Plan that is not an
\n Assumed Plan;<\/p>\n
(iii) all liabilities (including Taxes and
\n Restructuring Taxes) to the extent relating to or arising out of the
\n Retained Assets;<\/p>\n
(iv) any indebtedness for borrowed money of TRW or
\n the Asset Selling Subsidiaries (other than borrowed money of the
\n Aerospace Affiliates in an amount not to exceed $4.4 million) and any
\n guarantees in respect thereof, except as set forth on Schedule
\n 2.4(a)(vii);<\/p>\n
(v) any and all liabilities to employees, former
\n employees, third parties, Governmental Entities, customers or any other
\n Persons relating to the exposure to, use of, manufacture of, transport
\n of or any action taken by TRW or its Subsidiaries prior to the Closing
\n Date with respect to asbestos, including but not limited to the
\n incorporation of asbestos into products of the Business or the use of
\n asbestos or products containing asbestos in the operation of the
\n Business, or the presence of asbestos in any facility or location used
\n in the conduct of the Business prior to the Closing, but excluding all
\n liabilities and obligations relating to removal of asbestos from any
\n Owned Real Property or Leased Real Property following the Closing Date,
\n provided that the presence of asbestos in its then-current condition at
\n any Owned Real Property or Leased Real Property is lawful as of the
\n Closing Date. The defense of all legal claims of any nature, under any
\n legal or equitable theory of recovery whatsoever, concerning
\n asbestos-containing products used or actions taken prior to the Closing
\n Date shall be strictly governed by the procedures set forth in Schedule
\n 2.4(b)(v) to this Agreement;<\/p>\n
(vi) all liabilities and obligations with respect to
\n claims of infringement or other misappropriation of the Intellectual
\n Property<\/p>\n
21<\/p>\n
rights of other persons by the Business that either arose on or before
\n the Closing Date or that related to continuation of conduct that took
\n place as of the Closing Date which had infringed or otherwise
\n misappropriated the Intellectual Property rights of another Person as of
\n the Closing Date (except for any continuation of conduct that takes
\n place following notice to Buyer or its subsidiaries that such conduct
\n constitutes infringement or misappropriation of Intellectual Property
\n rights of another person; provided, however that nothing in this
\n exception shall affect Buyer’s ability to seek any remedy for a breach
\n of the representations and warranties contained in Section 4.14 hereof);<\/p>\n
(vii) all liabilities related to any site that was
\n previously owned or operated by the TRW Participants and which is not,
\n as of the Closing Date, being operated in connection with the Business;<\/p>\n
(viii) all liabilities and obligations resulting from
\n or relating to litigation, proceedings, actions, claims, or
\n investigations at law or in equity pending against TRW or the Asset
\n Selling Subsidiary to the extent relating to matters occurring on or
\n prior to the Closing Date, other than described in clauses (ix), (x),
\n (xi) and (xii) of this Section 2.4(b);<\/p>\n
(ix) to the extent Environmental Liabilities, in the
\n aggregate, exceed $3,913,000 but are less than $8,913,000, one-half of
\n such Environmental Liabilities in excess of $3,913,00 (but only to the
\n extent of such excess); and to the extent Environmental Liabilities
\n exceed $8,913,000, 100% of the excess of such Environmental Liabilities
\n above $8,913,000 (and only to the extent of such excess);<\/p>\n
(x) to the extent that Shared Campaign Claims exceed
\n $6,082,000 but are less than $8,082,000, one-half of the excess over
\n $6,082,000 (and only to the extent of such excess), and to the extent
\n that Shared Campaign Claims exceed $8,082,000, 100% of the amount in
\n excess of $8,082,000 (and only to the extent of such excess);<\/p>\n
(xi) to the extent that Pre-Closing Customer Contract
\n Claims exceed $6,013,000 but are less than $8,013,000, one-half of the
\n excess over $6,013,000 (and only to the extent of such excess), and to
\n the extent that the Pre-Closing Customer Contract Claims exceed
\n $8,013,000, 100% of the amount in excess of $8,013,000 (and only to the
\n extent of such excess);<\/p>\n
(xii) all liabilities and obligations arising out of,
\n resulting from, or relating to claims, whether founded upon negligence,
\n strict liability in tort, and\/or other similar legal theory, seeking
\n compensation or recovery for or relating to injury to person or damage
\n to property from (x) an event or events occurring before the Closing
\n Date, and arising out of a defect or alleged defect (other than a recall
\n or “rollover”) of a product<\/p>\n
22<\/p>\n
designed, manufactured or sold for the Business by TRW, an Aerospace
\n Subsidiary, an Aerospace Affiliate or an Asset Selling Subsidiary prior
\n to the Closing Date and (y) an event or events occurring after the
\n Closing Date but prior to May 1, 2004, and arising out of a defect or
\n alleged defect (other than recall or “rollover”) of a product
\n manufactured or sold for the Business by TRW, an Aerospace Subsidiary,
\n an Aerospace Affiliate or an Asset Selling Subsidiary prior to the
\n Closing Date;<\/p>\n
(xiii) fines or penalties associated with noncompliance
\n with import\/export laws on or prior to the Closing Date;<\/p>\n
(xiv) those liabilities and obligations listed on
\n Schedule 2.4(b)(xiv); and<\/p>\n
(xv) all Excluded Taxes.<\/p>\n
(c) Except for the Assumed Liabilities and except as
\nexpressly provided otherwise in this Agreement, neither Buyer nor any of its
\nAffiliates is assuming, and shall not be deemed to have assumed, any debts,
\nliabilities, commitments or obligations (including Taxes), whether fixed,
\ncontingent or absolute, matured or unmatured, liquidated or unliquidated,
\naccrued or unaccrued, known or unknown, whether or not required by GAAP to be
\nreflected in financial statements or disclosed in the notes thereto, of any
\nAerospace Subsidiary, Aerospace Affiliate or their respective Subsidiaries, and
\nTRW or the Asset Selling Subsidiaries shall remain solely and exclusively liable
\nwith regard thereto.<\/p>\n
(d) Nothing in this Agreement shall be construed to impose
\non TRW any liability or obligation that does not arise out of, relate to, or
\nconcern actions taken by TRW, its Subsidiaries, or Affiliates on or before the
\nClosing Date.<\/p>\n
Section 2.5 The Purchase Price.<\/p>\n
(a) In consideration of the aforesaid sale, conveyance,
\nassignment, transfer and delivery to Buyer of the Assets and the agreement of
\nTRW to enter into this Agreement, and subject to the adjustments set forth in
\nSection 2.6, Buyer shall assume the Assumed Liabilities and pay or cause to be
\npaid in full to TRW (or its designated Affiliates) for the benefit of TRW and
\nthe Asset Selling Subsidiaries (and TRW shall apportion the Purchase Price among
\nthe selling parties) an aggregate purchase price of $1,500,000,000 (one billion,
\nfive hundred million dollars) in cash (the “Purchase Price”). The Purchase Price
\nwill be payable at the Closing by wire transfer of same day funds to an account
\nor accounts and in such amounts as designated by TRW. TRW shall designate such
\naccount or accounts and amounts in writing at least two Business Days prior to
\nClosing.<\/p>\n
Section 2.6 Purchase Price Adjustment.<\/p>\n
(a) Within 90 days after the Closing Date, Buyer shall cause
\nErnst & Young LLP to prepare and deliver to TRW a balance sheet dated as of the
\nClosing Date<\/p>\n
23<\/p>\n
prepared in accordance with GAAP, consistently applied, as interpreted by the
\nSupplemental Accounting Principles and in a manner consistent with the
\npreparation of the Reference Balance Sheet (the “Closing Balance Sheet”). TRW
\nshall cause its and its Affiliates’ respective officers and employees to fully
\ncooperate and assist Buyer and its representatives in connection with the
\npreparation of the Closing Balance Sheet. The “Adjustment Amount” (which may be
\na negative value) shall be an amount equal to the difference between the Net
\nAsset Value set forth on the Closing Balance Sheet and the Net Asset Value set
\nforth on the Reference Balance Sheet.<\/p>\n
(b) If TRW disagrees with the determination of the
\nAdjustment Amount, TRW shall notify Buyer in writing of such disagreement within
\nthe 30-day period immediately following the delivery of the Closing Balance
\nSheet, which notice shall describe the specific nature of any such disagreement
\nand provide reasonable supporting documentation for such disagreement; provided,
\nhowever, TRW shall not disagree with any valuation made by Buyer which has been
\nmade in accordance with GAAP, as interpreted by the Supplemental Accounting
\nPrinciples. During the 30-day period of its review, TRW shall have reasonable
\naccess to any documents, schedules or work papers used in the preparation of the
\nClosing Balance Sheet. TRW agrees that any failure by it to notify Buyer of any
\nsuch disagreement prior to end of the 30-day period immediately following the
\ndelivery of the Closing Balance Sheet shall be deemed to be an acceptance by TRW
\nof the Closing Balance Sheet and shall constitute a complete waiver of any right
\nof TRW to dispute such Closing Balance Sheet and Adjustment Amount for purposes
\nof this Agreement.<\/p>\n
(c) Buyer and TRW agree to negotiate in good faith to
\nresolve any such disagreement regarding the determination of the Adjustment
\nAmount, and any resolution of such disagreement agreed to in writing by Buyer
\nand TRW shall be final and binding upon the parties and their successors and
\nassigns. If Buyer and TRW are unable to resolve such disagreement identified by
\nTRW pursuant to Section 2.6(b) within 30 days after delivery to Buyer of written
\nnotice of such disagreement by TRW, then the disputed matters shall be referred
\nfor final determination to PriceWaterhouseCoopers. If PriceWaterhouseCoopers is
\nunable or unwilling to serve, Buyer and TRW shall jointly select an arbitrator
\nfrom an internationally recognized accounting firm that is not the independent
\nauditor for either Buyer or TRW; provided, however, that if Buyer and TRW are
\nunable to select such an accounting firm within 45 days after delivery of
\nwritten notice of a disagreement, the Center for Public Resources shall make
\nsuch selection. (PriceWaterhouseCoopers or the internationally recognized
\naccounting firm so selected shall be referred to herein as the “Accounting
\nArbitrator”). The Accounting Arbitrator shall only consider those items and
\namounts as to which Buyer and TRW have disagreed within the time periods and on
\nthe terms specified above and shall resolve the matter in accordance with the
\nterms and provisions of this Agreement and the Ancillary Agreements. The
\nAccounting Arbitrator is expressly limited to the selection of either TRW’s or
\nBuyer’s position on a disputed item (or a position in between the positions of
\nTRW or Buyer) and it shall thus select as a resolution for each disputed matter
\nthe position of either Buyer or TRW (or a position in between the positions of
\nTRW or Buyer) (based solely on presentations and supporting material provided by
\nthe parties and not pursuant to any independent review) and the Accounting
\nArbitrator may not impose<\/p>\n
24<\/p>\n
an alternative resolution outside those bounds. The Accounting Arbitrator shall
\ndeliver to Buyer and TRW, as promptly as practicable and in any event within 45
\ndays after its appointment, a written report setting forth the resolution of
\neach disputed matter and its determination of the Adjustment Amount determined
\nin accordance with the terms of this Agreement. Such report shall be final,
\nnon-appealable and binding upon the parties to the fullest extent permitted by
\napplicable law and may be enforced in any court having competent jurisdiction.
\nThe 45-day period for delivering the written report may be extended for up to 30
\ndays for good cause by the mutual written consent of the parties or by the
\nAccounting Arbitrator at its sole discretion. The fees, expenses and costs of
\nthe Accounting Arbitrator shall be borne one-half by Buyer and one-half by TRW.<\/p>\n
(d) If and to the extent the Adjustment Amount is not zero,
\nas finally determined after the procedures set forth in this Section 2.6, the
\nPurchase Price shall be increased on a dollar for dollar basis by the amount of
\nthe Adjustment Amount if a positive number, or decreased on a dollar for dollar
\nbasis by the Adjustment Amount if a negative number, as the case may be. If the
\nPurchase Price is decreased as a result of the purchase price adjustment
\nmechanism set forth in this Section 2.6, TRW shall pay to Buyer the amount of
\nsuch decrease along with interest accrued thereon, and if the Purchase Price is
\nincreased as a result of the purchase price adjustment mechanism set forth in
\nthis Section 2.6, Buyer shall pay to TRW the amount of such increase along with
\ninterest accrued thereon, in either case, by delivery within two (2) Business
\nDays of such determination. Interest on the amount of such increase or decrease
\nshall accrue at a rate equal to daily average one month LIBOR plus one percent
\n(1%) commencing on the Closing Date. All payments pursuant to this Section
\n2.6(d) shall be made by wire transfer of same day funds to an account designated
\nby TRW or Buyer, as the case may be, within two (2) Business Days of such
\ndetermination.<\/p>\n
Section 2.7 Allocation of Consideration.<\/p>\n
(a) TRW and Buyer agree to allocate the Purchase Price and
\nthe Assumed Liabilities (the sum of the Purchase Price and the Assumed
\nLiabilities shall be referred to herein as the “Closing Price”) as set forth in
\nSchedule 2.7 hereto (the amount set forth on Schedule 2.7 with respect to each
\nitem, an “Initial Allocation”); provided that no later than fourteen (14) days
\nafter the date hereof, Buyer shall either retain Corporate Value Consulting
\n(Standard & Poor’s) or select and retain such other third-party accounting firm
\nor appraisal firm as is reasonably acceptable to TRW (“Buyer’s Appraiser”) to
\ndetermine the reasonableness of the allocation of the Closing Price.<\/p>\n
(i) Buyer’s Appraiser shall provide Buyer and TRW
\n with an appraisal of each UK Item (“Buyer’s Appraisal”). If the
\n aggregate of the Buyer’s Appraisals with respect to the UK Items is
\n within 10% of the aggregate Initial Allocations with respect to the UK
\n Items, then the Buyer’s Appraisal shall be accepted by Buyer and TRW,
\n and the Closing Price allocated to each UK Item shall equal the amount
\n of Buyer’s Appraisal and that amount shall be the final allocation with
\n respect to each such item (the “Final Allocation”); provided, however,
\n that in the event that the aggregate Buyer’s Appraisals with respect to
\n the UK Items varies<\/p>\n
25<\/p>\n
by more than 10% in either direction from the aggregate Initial
\n Allocations with respect to the UK Items, TRW may retain American
\n Appraisal or select and retain such other third-party accounting firm or
\n appraisal firm as is reasonably acceptable to Buyer (“TRW’s Appraiser”)
\n to determine the reasonableness of Buyer’s Appraisal and to provide
\n Buyer and TRW with an appraisal of such items (the “TRW’s Appraisal”),
\n in which case the Final Allocation will be the average of the Buyer’s
\n Appraisal and TRW’s Appraisal and the Final Allocation so determined
\n shall be accepted by Buyer and TRW.<\/p>\n
(ii) After the Final Allocation has been determined
\n with respect to each UK Item, the Net UK Appraisal Adjustment (as
\n defined in the following sentence) shall be computed. The “Net UK
\n Appraisal Adjustment” shall equal (i) the aggregate Final Allocations
\n with respect to the UK Items minus (ii) the aggregate Initial Allocation
\n with respect to the UK Items. If the Net UK Appraisal Adjustment is less
\n than zero (i.e., a negative number), then the Initial Allocation with
\n respect to each non-UK Item will be adjusted and increased by a pro rata
\n amount (based on Initial Allocations) of the absolute value of the Net
\n UK Appraisal Adjustment (each such adjusted Initial Allocation, a
\n “Revised Allocation”); provided, however, that if the Net UK Appraisal
\n Adjustment is greater than zero (i.e., a positive number), then the
\n Revised Allocation with respect to each non-UK Item will be the Initial
\n Allocation with respect to such item reduced by a pro rata amount (based
\n on Initial Allocations) of the Net UK Appraisal Adjustment; provided
\n further, however, if the Net UK Appraisal Adjustment is equal to zero,
\n then no change shall be made to the Initial Allocations and the Revised
\n Allocation with respect to each non-UK Item will be the Initial
\n Allocation with respect to such item.<\/p>\n
(iii) After the Revised Allocation has been determined
\n with respect to each non-UK Item, Buyer’s Appraiser will provide Buyer
\n and TRW with an allocation of the Residual Purchase Price (as defined in
\n the following sentence) to the non-UK Items (the “Buyer’s Allocation”).
\n The “Residual Purchase Price” shall equal the excess of (i) the Closing
\n Price over (ii) the aggregate Final Allocations with respect to the UK
\n Items. With respect to each non-UK Item, if the Buyer’s Allocation is
\n within 10% of the Revised Allocation, then the Buyer’s Allocation shall
\n be accepted by Buyer and TRW and shall be the Final Allocation;
\n provided, however, that in the event that the Buyer’s Allocation varies
\n by more than 10% in either direction from the Revised Allocation, TRW
\n may elect to have TRW’s Appraiser determine the reasonableness of
\n Buyer’s Allocation and provide Buyer and TRW with an allocation of the
\n Residual Purchase Price (the “TRW’s Allocation”), in which case the
\n Final Allocation will be the average of the Buyer’s Allocation and TRW’s
\n Allocation and the Final Allocation so determined shall be accepted by
\n Buyer and TRW.<\/p>\n
26<\/p>\n
(iv) Each party will bear the cost of any third-party
\n accounting firm or appraisal firm it retains.<\/p>\n
(b) Within 30 days of determination of the Adjustment Amount
\npursuant to Section 2.6 hereof, Buyer shall prepare a revised Purchase Price
\nallocation to provide for the allocation of the Adjustment Amount in a manner
\nthat is consistent with the Purchase Price allocation determined pursuant to
\nSection 2.7(a) and shall deliver such revised allocation to TRW for TRW’s review
\nand approval; provided, however, that if TRW does not approve of such revised
\nPurchase Price allocation, TRW shall select and retain a third-party accounting
\nfirm or appraisal firm to determine the reasonableness of the allocation of the
\nAdjustment Amount. If Buyer does not approve the revised allocation so
\ndetermined, the dispute shall be resolved according to the procedures set forth
\nin Section 2.6(c) hereof, provided, however, that in no event shall the
\naggregate allocation to the UK Items result in an allocation that is less than
\nactual fair market value of the UK Items determined under the principles of
\nSection 2.7(a)(i).<\/p>\n
(c) Neither TRW, Buyer nor any of their respective
\nAffiliates shall file any Tax Return or other document relating to Taxes or
\notherwise take any position or agree to take any position relating to Taxes
\nwhich is inconsistent with the allocation (including any revision under this
\nSection 2.7) determined pursuant to this Section 2.7 unless required to do so
\npursuant to a Final Determination.<\/p>\n
Section 2.8 Proration.<\/p>\n
(a) Buyer and TRW agree that all of the items normally
\nprorated, including those listed below, relating to the business and operation
\nof the Acquired Assets will be prorated as of the Closing Date, with TRW liable
\nto the extent such items relate to any time period through the Closing Date, and
\nBuyer liable to the extent such items relate to periods subsequent to the
\nClosing Date:<\/p>\n
(i) personal property, real estate, occupancy and
\n any other similar non-Income Taxes, assessments and other charges, if
\n any, on or with respect to the ownership, use or business and operation
\n of the Acquired Assets;<\/p>\n
(ii) rent and Taxes (other than Income Taxes);<\/p>\n
(iii) any permit, license or registration fees with
\n respect to any Environmental Permit or other Permit; and<\/p>\n
(iv) sewer rents and charges for water, telephone,
\n electricity, gas and other utilities.<\/p>\n
(b) In connection with such proration, in the event that
\nactual amounts are not available at the Closing Date, the proration shall be
\nbased upon the actual amount of such Taxes or fees for the preceding year (or
\nappropriate period) for which such actual Taxes or fees are available and such
\nTaxes or fees shall be reprorated upon request of either TRW or Buyer made
\nwithin sixty (60) days of the date that the actual amounts<\/p>\n
27<\/p>\n
become available. TRW and Buyer agree to furnish each other with such documents
\nand other records as may be reasonably requested in order to confirm all
\nadjustment and proration calculations made pursuant to this Section 2.8.<\/p>\n
ARTICLE III<\/p>\n
CLOSING<\/p>\n
Section 3.1 Closing. Upon the terms and subject to the
\nconditions of this Agreement and the Ancillary Agreements, the consummation of
\nthe transactions contemplated by this Agreement and the Ancillary Agreements
\n(the “Closing”) shall take place no later than five (5) Business Days following
\nthe satisfaction or waiver of the conditions set forth in Article VII hereof, at
\n10:00 a.m., at the offices of Skadden, Arps, Slate, Meagher & Flom, LLP, Four
\nTimes Square, New York, New York 10036, or at such other time and place as shall
\nbe agreed upon by the parties hereto. The date on which the Closing occurs is
\nherein referred to as the “Closing Date.” The Closing will be deemed to have
\noccurred as of 11:59 p.m. local time on the Closing Date.<\/p>\n
Section 3.2 Deliveries at Closing.<\/p>\n
(a) At the Closing, TRW shall deliver or cause to be
\ndelivered to Buyer (unless previously delivered), the items identified on
\nSchedule 3.2(a).<\/p>\n
(b) At the Closing, Buyer shall deliver or cause to be
\ndelivered to TRW (unless previously delivered), the items identified on Schedule
\n3.2(b).<\/p>\n
ARTICLE IV<\/p>\n
REPRESENTATIONS AND WARRANTIES OF TRW<\/p>\n
Except as disclosed in a separate disclosure statement, a copy
\nof which has been delivered by TRW to Buyer prior to the execution of this
\nAgreement and is attached hereto (the “TRW Disclosure Letter”), TRW hereby
\nrepresents and warrants to Buyer the matters set forth below. Information
\ndisclosed in any section of the TRW Disclosure Letter shall be deemed to be
\ndisclosed with respect to such other sections of this Agreement or the TRW
\nDisclosure Letter to which such disclosure on its face would reasonably pertain
\nin light of the form and substance of the disclosure made. All representations
\nand warranties relating to the Spanish Affiliate are made only to the knowledge
\nof TRW.<\/p>\n
Section 4.1 Organization and Existence. Each of the TRW Entities
\nis a legal entity duly established, validly existing, and (where applicable) in
\ngood standing under the laws of its jurisdiction of organization or
\nincorporation, as the case may be. Each of the TRW Entities has all requisite
\npower and authority to own, lease and operate its properties and to conduct the
\nBusiness as it is currently conducted, except where the<\/p>\n
28<\/p>\n
failure to have such power and authority, individually or in the aggregate, has
\nnot resulted, and is not reasonably likely to result, in a Material Adverse
\nEffect. Each of the TRW Entities is duly qualified or licensed to do business
\nunder the laws of each jurisdiction in which the nature of the activities
\nconducted by it makes such qualification necessary, except where the failure to
\nbe so qualified or licensed, individually or in the aggregate, has not resulted,
\nand is not reasonably likely to result, in a Material Adverse Effect.<\/p>\n
Section 4.2 Power and Authority. TRW has all requisite corporate
\nor other organizational power and authority to execute and deliver, to perform
\nits obligations under, and to consummate the transactions contemplated by, this
\nAgreement and the Ancillary Agreements to which it is a party. Each of the TRW
\nSelling Shareholders and Asset Selling Subsidiaries has all requisite corporate
\nor other organizational power and, as of the Closing, will have the corporate or
\nother organizational authority to execute and deliver, to perform its
\nobligations under, and to consummate the transactions contemplated by this
\nAgreement and the Ancillary Agreements to which it is a party.<\/p>\n
Section 4.3 Authorization. The execution and delivery by TRW of,
\nthe performance by TRW of its obligations under, and the consummation by TRW of
\nthe transactions contemplated by, this Agreement have been, and the other
\nAncillary Agreements, as of the Closing, will be, duly authorized by all
\nrequisite organizational action of TRW. The execution and delivery by each of
\nthe Asset Selling Subsidiaries and the TRW Selling Shareholders of, the
\nperformance by each of the Asset Selling Subsidiaries and the TRW Selling
\nShareholders of its obligations under, and the consummation by each of the Asset
\nSelling Subsidiaries and the TRW Selling Shareholders of the transactions
\ncontemplated by, the Ancillary Agreements, as of the Closing, will be duly
\nauthorized by all requisite organizational action of each such Asset Selling
\nSubsidiary and TRW Selling Shareholder.<\/p>\n
Section 4.4 Binding Effect. This Agreement has been duly
\nexecuted and delivered by TRW and is, and each Ancillary Agreement will be duly
\nexecuted and delivered by each TRW Entity which is a party thereto and when
\nexecuted and delivered by all parties thereto will be, the valid and binding
\nobligation of the TRW Entities which are a party hereto or thereto, enforceable
\nagainst the TRW Entities which are a party hereto or thereto in accordance with
\ntheir terms, assuming due authorization, executions and delivery by Buyer (and
\nas applicable, Buyer’s Affiliates).<\/p>\n
Section 4.5 Interest in Subsidiaries and Affiliates.<\/p>\n
(a) Section 4.5 of the TRW Disclosure Letter sets forth the
\nname and jurisdiction of organization or incorporation, the authorized capital
\nstock, partnership capital or equivalent, the number and type of its issued and
\noutstanding shares of capital stock, partnership interest or similar ownership
\ninterests and the current ownership of such shares, partnership interests or
\nsimilar ownership interests of each Aerospace Subsidiary and their Subsidiaries
\nand each Aerospace Affiliate and their Subsidiaries.<\/p>\n
29<\/p>\n
(b) All of the shares of capital stock of, or other equity
\ninterest in, the Aerospace Subsidiaries and the Aerospace Affiliates owned by
\nTRW Selling Shareholders, (i) are owned by one or more TRW Selling Shareholders,
\nfree and clear of all Liens, and (ii) have been duly authorized, validly issued
\nand are fully paid and nonassessable.<\/p>\n
(c) There are no outstanding options, warrants, convertible
\nsecurities or other rights, agreements, arrangements or commitments relating to
\nthe capital stock of, or other equity interest in, any Aerospace Subsidiary or
\nin any Aerospace Affiliate, obligating any TRW Selling Shareholder, Aerospace
\nSubsidiary or Aerospace Affiliate, at any time or upon the occurrence of certain
\nevents, to offer, issue, sell, transfer, vote or otherwise dispose of or sell
\nany shares of capital stock of, or other equity interest in, any Aerospace
\nSubsidiary or Aerospace Affiliate.<\/p>\n
Section 4.6 No Defaults; Consents. (a) Neither the execution and
\ndelivery of this Agreement or any Ancillary Agreement by the TRW Entities, nor
\nthe consummation of the transactions contemplated by this Agreement or the
\nAncillary Agreements will violate, breach, contravene, conflict with, result in
\nthe termination or acceleration of, entitle any party to payment under, entitle
\nany party to exercise any right of first refusal, first offer, preemptive right
\nor other option right under, or otherwise constitute or give rise to a Default
\nunder, as applicable, (i) any provision of the articles of incorporation, the
\nby-laws or similar organizational documents of any of the TRW Entities, (ii) any
\nContract or other instrument or obligation to which any of the TRW Entities is a
\nparty or by which any of the Assets or Subsidiary interests are bound, or (iii)
\nany writ, injunction, decree, statute, rule or regulation applicable to any TRW
\nSelling Shareholder, any Asset Selling Subsidiary or the Assets or the
\nSubsidiary interests; except, in the case of the foregoing clauses (ii) and
\n(iii), for such violations, breaches, conflicts, terminations, accelerations,
\nentitlements or Defaults which, individually or in the aggregate, have not
\nresulted in, or which would not reasonably be likely to result in, a Material
\nAdverse Effect.<\/p>\n
(b) No filing with or notice to, and no permit,
\nauthorization, registration, consent or approval of, any Governmental Entity is
\nrequired on the part of any TRW Entity for the execution, delivery and
\nperformance by TRW of this Agreement or the consummation by any TRW Entity of
\nthe transactions contemplated hereby, except (i) the filing of a notification
\nand report form under the HSR Act and the termination or expiration of any
\nwaiting period under the HSR Act, (ii) the filings, consents, approvals or
\nclearances required under any foreign antitrust or investment laws (including
\nwithout limitation under Council Regulation No. 4064\/89 of the European
\nCommunity, as amended (the “EU Merger Regulation”)), (iii) the filings,
\nconsents, approvals or clearances required by the department of defense or
\ndepartment of aviation of any jurisdiction, including, without limitation, the
\nUnited States Department of Defense, the Ministry of Defense of the United
\nKingdom and the Federal Aviation Agency, or (iv) where the failure to obtain
\nsuch permits, authorizations, consents or approvals or to make such filings or
\ngive such notice would not have, individually or in the aggregate, and would not
\nreasonably be likely to have, a Material Adverse Effect.<\/p>\n
30<\/p>\n
Section 4.7 Financial Statements.<\/p>\n
(a) Section 4.7(a) of the TRW Disclosure Letter contains the
\nSupplemental Accounting Principles and the following financial statements
\nrelating to the Business: the balance sheet of the Business as of March 29, 2002
\nand May 31, 2002 and the related Statement of Operations for the respective
\nthree-month period and five-month period then ended (collectively the “2002
\nFinancial Statements”).<\/p>\n
(b) The 2002 Financial Statements have been prepared in
\naccordance with the books of account and other financial records of the TRW
\nEntities, the Standard Practice Instructions as applied by the Business, Local
\nStandard Practice Instructions in use by the Business and with the Supplemental
\nAccounting Principles, in use by the Business, as of the dates and for the
\nperiods set forth. The 2002 Financial Statements present fairly, in all material
\nrespects, in accordance with GAAP consistently applied, the consolidated
\nfinancial condition and results of operations of the Business as of March 31,
\n2002 and May 31, 2002 and for the respective three-month period and five-month
\nperiod then ended, subject to normal year-end adjustments, except that they
\nexclude all applicable footnote disclosure as required by GAAP and except as set
\nforth in Section 4.7(b) of the TRW Disclosure Letter.<\/p>\n
(c) Section 4.7(c) of the TRW Disclosure Letter contains the
\nfollowing financial statements relating to the Business: the balance sheets of
\nthe Business as of December 31, 2000 and December 31, 2001, and the related
\nstatements of operations for the annual periods ended on such dates,
\nrespectively (collectively, the “Historical Financial Statements”). The
\nHistorical Financial Statements have been prepared in accordance with the books
\nof account and other financial records of the TRW Entities, the Standard
\nPractice Instructions as applied by the Business and Local Standard Practice
\nInstructions in use by the Business, as of the dates and for the periods therein
\nset forth. The Historical Financial Statements present fairly, in all material
\nrespects, in accordance with GAAP consistently applied, the consolidated
\nfinancial condition and results of operations of the Business as of December 31,
\n2000 and December 31, 2001 and for the respective twelve-month periods then
\nended, except that they exclude all applicable footnote disclosure as required
\nby GAAP and except as set forth in Section 4.7(c) of the TRW Disclosure Letter.<\/p>\n
31<\/p>\n
Section 4.8 No Undisclosed Liabilities. The TRW Participants
\nhave no liabilities (whether absolute, accrued, contingent or otherwise) that
\nare required by GAAP (as consistently applied by the Business in accordance with
\nthe Standard Practice Instructions or the Business’ Local Standard Practice
\nInstructions, which are in accordance with GAAP) to be reflected on the
\nconsolidated financial statements of the Business or reflected in the footnotes
\nthereto, except (a) liabilities disclosed and reserved against in the May 31,
\n2002 Balance Sheet, (b) items disclosed in Section 4.8 of the TRW Disclosure
\nLetter, (c) liabilities incurred in the ordinary course of business consistent
\nwith past practice since May 31, 2002 and (d) liabilities that, individually or
\nin the aggregate, have not resulted in, or which would not be reasonably likely
\nto result in, a Material Adverse Effect.<\/p>\n
Section 4.9 Absence of Certain Changes. Since May 31, 2002, the
\nTRW Entities have conducted the Business in the ordinary course of business
\nconsistent with past practice and have not experienced any development or change
\nwhich, individually or in the aggregate, has resulted in or which would be
\nreasonably likely to result in a Material Adverse Effect. From May 31, 2002
\nuntil the date of this Agreement, none of the TRW Entities has undertaken any
\nactions that are material in the aggregate to the Business and that would be
\nprohibited under Section 6.1(a) if undertaken after the date hereof.<\/p>\n
Section 4.10 Litigation. Except as set forth in the litigation
\nschedule included in Section 4.10 of the TRW Disclosure Letter, as of the date
\nof litigation schedule there is no claim, demand, action, suit, in law or in
\nequity, or proceeding or audit outside the ordinary course of business or, to
\nthe knowledge of TRW, investigation (collectively “Actions”) before or involving
\nany Governmental Entity or private arbitration tribunal pending or, to the
\nknowledge of TRW, threatened, against any TRW Entity in respect of the Assets or
\nthe Business which, individually or in the aggregate, has resulted in, or which,
\nif determined adversely to TRW, would be reasonably likely to result in a
\nMaterial Adverse Effect. There are no judgments, decrees, orders, agreements or
\nlitigation or other adversary proceeding settlements specifically against or
\nbinding upon any of the TRW Participants or the Business, or which prohibit or
\nrestrict the Business as currently conducted, or to the knowledge of TRW, any
\nsuch actions threatened against any of the TRW Participants except as set forth
\nin Section 4.10 of the TRW Disclosure Letter or that, individually or in the
\naggregate, have not resulted in, and would, if determined adversely to TRW, not
\nreasonably be likely to result in, a Material Adverse Effect.<\/p>\n
Section 4.11 Compliance with Applicable Law.<\/p>\n
(a) Each TRW Entity holds all Permits necessary for each of
\nthem to own, lease or operate its properties and assets and for the lawful
\nconduct of their respective businesses (with respect to the Business), except
\nwhere the failure to hold such Permits would not, individually or in the
\naggregate, be reasonably likely to result in a Material Adverse Effect. No
\nmaterial Permit is or will be materially impaired by the execution and delivery
\nof this Agreement or the consummation of the transactions contemplated hereby.<\/p>\n
32<\/p>\n
(b) Each TRW Entity is in compliance with the terms of its
\nrespective Permits (with respect to the Business), except where noncompliance
\nwith the terms of such Permits would not, individually or in the aggregate, be
\nreasonably likely to result in a Material Adverse Effect.<\/p>\n
(c) Each TRW Entity has complied and is in compliance, in
\nall material respects, with all material laws, rules and regulations,
\nordinances, judgments, decrees, orders, writs, and injunctions of all
\nGovernmental Entities applicable to the Business except as disclosed in Section
\n4.11 of the TRW Disclosure Letter, and no written notice has been received by a
\nTRW Entity (with respect to the Business) alleging any material violation of any
\nof the foregoing.<\/p>\n
Section 4.12 Taxes.<\/p>\n
(a) All material Tax Returns required to be filed with
\nrespect to each of the Asset Selling Subsidiaries and their Subsidiaries
\n(including the consolidated federal income Tax Return of TRW and any state,
\nlocal or foreign Tax Return that includes any of the Aerospace Subsidiaries on a
\nconsolidated, combined or unitary basis) have been timely filed, and all such
\nTax Returns are true, correct and complete in all material respects; all Taxes
\nshown as due on such Tax Returns as filed have been paid; there are no material
\nTax liens (other than Permitted Liens) on the Acquired Assets of the Business;
\nand TRW and each other entity transferring a United States real property
\ninterest (within the meaning of Section 897(c)(1) of the Code) hereunder is not
\na foreign person within the meaning of Section 1445(f)(3) of the Code.<\/p>\n
(b) Each of the TRW-controlled Aerospace Affiliates and
\ntheir respective Subsidiaries have withheld and paid all Taxes required to have
\nbeen withheld and paid in connection with amounts paid or owing to any employee,
\nformer employee, independent contractor, creditor, stockholder, or other third
\nparty.<\/p>\n
(c) No position has been asserted or adjustment proposed in
\nwriting by any Tax Authority, and there are no pending or, to the knowledge of
\nTRW, threatened actions or proceedings for the assessment or collection of Taxes
\nagainst the TRW-controlled Aerospace Affiliates or any of their Subsidiaries,
\nwhich, if asserted by such Tax Authority in a Tax period ending after the date
\nof this Agreement, has resulted or would reasonably be likely to result in a
\nMaterial Adverse Effect. No issues have been raised in any examination by any
\nTaxing Authority with respect to any of the Acquired Assets, the TRW-controlled
\nAerospace Affiliates or their respective Subsidiaries which, by application of
\nsimilar principles, reasonably could be expected to result in a proposed
\ndeficiency or increase in Tax for any other period not so examined. Section
\n4.12(c) of the TRW Disclosure Letter lists all state, local, and foreign income
\nTax Returns filed with respect to any of the TRW-controlled Aerospace Affiliates
\nand their respective Subsidiaries for taxable periods ended on or after December
\n31, 1999, indicates those Tax Returns that have been audited, and indicates
\nthose Tax Returns that currently are the subject of audit. TRW delivered or made
\navailable to Buyer correct and complete copies all Tax Returns, examination
\nreports, and statements of deficiencies assessed against or<\/p>\n
33<\/p>\n
agreed to by the TRW-controlled Aerospace Affiliates and their respective
\nSubsidiaries since December 31, 1999.<\/p>\n
(d) None of the TRW-controlled Aerospace Affiliates and
\ntheir respective Subsidiaries has waived any statute of limitations in respect
\nof Taxes or agreed to any extension of time with respect to a Tax assessment or
\ndeficiency.<\/p>\n
(e) To the knowledge of TRW no liability is outstanding or
\nhas been asserted against any of the Aerospace Affiliates or their Subsidiaries,
\nwith respect to material Taxes of any other Person pursuant to any Tax
\nallocation or sharing agreement with any such Person, or any agreement to
\nindemnify any such Person with respect to Taxes.<\/p>\n
(f) Each of the TRW-controlled Aerospace Affiliates and
\ntheir respective Subsidiaries qualifies and has since the date of its formation
\nqualified to be treated as a corporation for federal income tax purposes and
\nnone of the TRW-controlled Aerospace Affiliates and their respective
\nSubsidiaries nor, to the knowledge of TRW, any of the shareholders thereof has
\ntaken a position inconsistent with such treatment with regard to any Tax.<\/p>\n
Section 4.13 Employee Benefit Plans.<\/p>\n
(a) Section 4.13 of the TRW Disclosure Letter contains a
\ntrue and complete list of each Assumed Plan and of each material Plan. For all
\npurposes herein, “Plan” shall mean each material “welfare” plan, fund or program
\n(within the meaning of Section 3(1) of the Employee Retirement Income Security
\nAct of 1974, as amended (“ERISA”)); each material “pension” plan, fund or
\nprogram (within the meaning of Section 3(2) of ERISA); and each other material
\nemployee benefit plan, including, but not limited to, any bonus, retention,
\nincentive, deferred compensation, vacation, stock purchase, stock option,
\nseverance, change of control or fringe benefit plan, agreement, program or
\nwritten policy, in each case, that is sponsored, maintained or contributed to or
\nrequired to be contributed to by TRW or any ERISA Affiliate thereof (in any
\nevent, including the Aerospace Subsidiaries and the Aerospace Affiliates and
\ntheir respective Subsidiaries) or to which TRW or any ERISA Affiliate thereof is
\nparty, for the benefit of any employee or former employee of the Business (the
\n“Plans”). Each Plan that is (i) sponsored and maintained solely by any Aerospace
\nSubsidiary or any Aerospace Affiliate or any of their respective Subsidiaries
\nand (ii) expressly assumed by Buyer pursuant to Section 6.8 and identified as
\nsuch on Section 4.13 of the TRW Disclosure Letter shall be referred to herein as
\nan “Assumed Plan.” For purposes of this Agreement, (x) “Business Plan” means
\neach Assumed Plan and each Plan with respect to which Buyer receives assets
\npursuant to Section 6.8 and (y) “ERISA Affiliate” means, with respect to any
\nentity, trade or business, any other entity, trade or business that is, or was
\nat the relevant time, a member of a group described in Section 4.14(b), (c), (m)
\nor (o) of the Code or Section 4001(b)(1) of ERISA that includes or included the
\nfirst entity, trade or business, or that is, or was at the relevant time, a
\nmember of the same “controlled group” as the first entity, trade or business
\npursuant to Section 4001(a)(14) of ERISA.<\/p>\n
34<\/p>\n
(b) With respect to each Plan that is a Multiemployer Plan
\n(as defined in Section 4.13(i)), the representations in Sections 4.13(b) through
\n(g) and (k) through (m) shall not be applicable.<\/p>\n
(c) With respect to each Business Plan, TRW has heretofore
\ndelivered or made available to Buyer true and complete copies of each of the
\nfollowing documents: (i) a copy of the Plan (or to the extent no such copy
\nexists, an accurate written description thereof), and any amendments, trusts,
\nand insurance contracts with respect thereto; (ii) a copy of the most recent
\nsummary plan description and summary of material modifications required under
\nERISA with respect thereto; (iii) with respect to each Business Plan that is a
\npension plan within the meaning of Section 3(1) of ERISA (a “Pension Plan”), a
\ncopy of each trust or other funding arrangement; (iv) the most recent
\ndetermination letter (or analogous approval in a jurisdiction other than the
\nUnited States) most recently issued by the U.S. Internal Revenue Service (“IRS”)
\n(or other relevant national or provincial tax authority); (v) the most recently
\nprepared actuarial report and financial statement and (vi) the two most recent
\nAnnual Reports (Form 5500 Series). Except as specifically provided in the
\nforegoing documents delivered or made available to Buyer, there are no
\namendments to any Business Plan that has been adopted or approved, nor has any
\nparty undertaken to make any such amendments or to adopt or approve any new
\nBusiness Plan. With respect to each material Plan (other than a Business Plan),
\nTRW has heretofore delivered or made available to Buyer true and complete copies
\nof each of the following documents: (i) a copy of the Plan (or to the extent no
\nsuch copy exists, an accurate written description thereof) and (ii) a copy of
\nthe most recent summary plan description and summary of material modifications
\nunder ERISA with respect thereto, to the extent these documents exist for such
\nplans.<\/p>\n
(d) With respect to each Plan that is subject to United
\nStates law, each such Plan that is a Pension Plan is now and always has been
\noperated in accordance with its terms and the requirements of all applicable
\nlaws, regulations and rules promulgated thereunder, including, without
\nlimitation, ERISA and the Code, except to the extent such noncompliance would
\nnot reasonably be expected to result in a Material Adverse Effect. There are no
\nmaterial pending or, to the knowledge of TRW, threatened claims (other than
\nclaims for benefits in the ordinary course) or lawsuits with respect to the
\nAffected Employees which have been asserted or instituted, and, to the knowledge
\nof TRW, no set of circumstances exists which may reasonably give rise to a claim
\nor lawsuit, against the Assumed Plans, any fiduciaries thereof with respect to
\ntheir duties to the Assumed Plans or the assets of any of the trusts under any
\nof the Assumed Plans which could reasonably be expected to result in any
\nmaterial liability of Buyer, the Aerospace Subsidiaries or the Aerospace
\nAffiliates or any of their respective subsidiaries to the Pension Benefit
\nGuaranty Corporation, the Department of Treasury, the Department of Labor, any
\nMultiemployer Plan, any Plan, any participant in a Plan, or any other party.<\/p>\n
(e) Each Business Plan that is intended to be qualified
\nunder Section 401(a) of the Code or Section 401(k) of the Code has timely
\nreceived a favorable determination letter from the IRS that has not been revoked
\nto the effect that such Business Plan and the related trust is so qualified, and
\nno fact or event has occurred since the date of such determination letter or
\nletters from the IRS to adversely affect the<\/p>\n
35<\/p>\n
qualified status of any such Business Plan or the exempt status of any such
\ntrust. No trust funding any Business Plan is intended to meet the requirements
\nof Code Section 501(c)(9).<\/p>\n
(f) With respect to each Business Plan that is subject to
\nUnited States law, no liability under Title IV or Section 302 of ERISA has been
\nincurred by TRW, the Aerospace Affiliates or the Aerospace Affiliates or any of
\ntheir respective ERISA Affiliates that has not been satisfied in full, and to
\nthe knowledge of TRW, no condition exists that presents a material risk to Buyer
\nof incurring any such liability, other than liability for premiums due the
\nPension Benefit Guaranty Corporation (which premiums have been fully paid when
\ndue). Without limiting the generality of the foregoing, with respect to each
\nBusiness Plan that is subject to Title IV or Section 302 of ERISA or Section 412
\nor 4971 of the Code: (i) there does not exist any accumulated funding deficiency
\nwithin the meaning of Section 412 of the Code or Section 302 of ERISA, whether
\nor not waived; (ii) as of January 1, 2002, the fair market value of the assets
\nof such Business Plan held with respect to the Affected Employees equals or
\nexceeds the projected benefit obligation (“PBO”) determined in accordance with
\nStatement of Financial Accounting No. 87 (“FAS”) of the accrued obligations of
\nsuch Business Plan (whether or not vested); (iii) no reportable event within the
\nmeaning of Section 4043(c) of ERISA for which the 30-day notice requirement has
\nnot been waived has occurred, and the consummation of the transactions
\ncontemplated by this Agreement or the Ancillary Agreements will not result in
\nthe occurrence of any such reportable event; (iv) no liability (other than for
\npremiums to the PBGC) under Title IV of ERISA has been or is expected to be
\nincurred by the Aerospace Subsidiaries or the Aerospace Affiliates or any of
\ntheir respective Subsidiaries or ERISA Affiliates; (v) the PBGC has not
\ninstituted proceedings to terminate any such Business Plan and to the knowledge
\nof TRW, no condition exists that presents a risk that such proceedings will be
\ninstituted or which would constitute grounds under Section 4042 of ERISA for the
\ntermination of, or the appointment of a trustee to administer, any such Business
\nPlan; and (vi) there is not now, nor to the knowledge of TRW, do any
\ncircumstances exist that could give rise to, any requirement for the posting of
\nsecurity with respect to any such Business Plan or the imposition of any Lien on
\nthe assets of the Business or any Aerospace Subsidiary or Aerospace Affiliate or
\nany of their respective subsidiaries under ERISA or the Code.<\/p>\n
(g) With respect to each Business Plan that is subject to
\nUnited States law, all pension contributions and payments required to be made
\nwith respect to any Business Plan by applicable law or regulation or by any plan
\ndocument or other contractual undertaking, and all premiums due or payable with
\nrespect to insurance policies funding any Business Plan, for any period through
\nthe date hereof have been timely made or paid in full or, to the extent not
\nrequired to be made or paid on or before the date hereof, have been fully
\nreflected on the Financial Statements. Each Assumed Plan that is an employee
\nwelfare benefit plan under Section 3(1) of ERISA either (i) is funded through an
\ninsurance company contract and is not a “welfare benefit fund” with the meaning
\nof Section 419 of the Code or (ii) is unfunded.<\/p>\n
(h) Except as set forth in Section 4.13 of the TRW
\nDisclosure Letter, no Plan provides that the consummation of the transactions
\ncontemplated by this<\/p>\n
36<\/p>\n
Agreement will, either alone or in combination with another event, (i) entitle
\nany current or former employee or officer of the Business to any severance pay,
\nunemployment compensation or other payment or benefit, except as expressly
\nprovided in this Agreement, or (ii) materially accelerate the time of payment or
\nvesting of any amount or benefit, or increase the amount of compensation or
\nbenefits due any such employee or officer.<\/p>\n
(i) Except as set forth in Section 4.13 of the TRW
\nDisclosure Letter: (i) no Plan is a “multiemployer plan” within the meaning of
\nSection 4001(a)(3) of ERISA (a “Multiemployer Plan”) or a plan that has two or
\nmore contributing sponsors at least two of whom are not under common control,
\nwithin the meaning of Section 4063 of ERISA (a “Multiple Employer Plan”); (ii)
\nnone of TRW, the Aerospace Subsidiaries or the Aerospace Affiliates nor any
\nERISA Affiliates thereof has, at any time during the last six years, contributed
\nto or been obligated to contribute to any Multiemployer Plan or Multiple
\nEmployer Plan with respect to any Affected Employee; (iii) none of the Aerospace
\nSubsidiaries or the Aerospace Affiliates nor any ERISA Affiliates has incurred
\nor, to the knowledge of TRW, is reasonably expected to incur, any liability to a
\nMultiemployer Plan as a result of a complete or partial withdrawal from such
\nMultiemployer Plan (as those terms are defined in Part I of Subtitle E of Title
\nIV of ERISA) that has not been satisfied in full; (iv) as a result of the
\ntransaction set forth in this Agreement or otherwise, to the knowledge of TRW,
\nno such Multiemployer Plan is in reorganization, and no increased contributions
\nmay be required to avoid a reduction in benefits or an excise tax; and (v)
\nneither TRW nor any subsidiary has failed to make any required contribution with
\nrespect to such Multiemployer Plan.<\/p>\n
(j) There does not now exist, nor do any circumstances exist
\nthat could reasonably be expected to result in a liability of the Aerospace
\nSubsidiaries (other than the Asset Selling Subsidiaries) or the Aerospace
\nAffiliates or any of their respective subsidiaries following the Closing, as a
\nresult of joint and several liability, with respect to any liabilities of an
\nentity other than the Aerospace Subsidiaries or the Aerospace Affiliates or any
\nof their respective Subsidiaries (i) under Title IV of ERISA, (ii) under Section
\n302 of ERISA, (iii) under Sections 412 and 4971 of the Code, or (iv) as a result
\nof a failure to comply with the continuation coverage requirements of Section
\n601 et seq. of ERISA and Section 4980B of the Code. None of the Aerospace
\nAffiliates or Aerospace Subsidiaries or any of their respective Subsidiaries,
\nnor any fiduciary with respect to a Business Plan, has engaged in any
\n“prohibited transaction” (as defined in Section 4975 of the Code or Section 406
\nof ERISA), which could subject any of the Business Plans or their related
\ntrusts, the Aerospace Affiliates (other than the Asset Selling Subsidiaries) or
\nAerospace Subsidiaries or any of their respective Subsidiaries or any Person
\nthat any such entity has an obligation to indemnify, to any material tax or
\npenalty imposed under Section 4975 of the Code or Section 502 of ERISA.<\/p>\n
(k) With respect to Affected Employees and former employees
\nof the Business, no TRW Participant has or could reasonably be expected to have
\nany liability for life, health, medical or other welfare benefits to former
\nemployees or persons who could become former employees or beneficiaries or
\ndependents thereof, except for health continuation coverage as required by
\nSection 4980B of the Code or Part 6 of Title I of<\/p>\n
37<\/p>\n
ERISA and at no expense to the TRW Participant (each such plan, practice or
\narrangement, a “Retiree Plan”). With respect to Affected Employees and former
\nemployees of the Business, each Retiree Plan that is an Assumed Plan can be
\nfreely amended or terminated without the consent of participants without
\nliability according to its terms, and no representations or communications have
\nbeen made that any such Retiree Plan could or would not be so amended or
\nterminated.<\/p>\n
(l) Each individual who renders services to the Aerospace
\nSubsidiaries or the Aerospace Affiliates or any of their respective Subsidiaries
\nwho is classified as having the status of an independent contractor or other
\nnon-employee status for any purpose (including for purposes of taxation and Tax
\nreporting and under the Plans) is properly so characterized except as would not,
\nindividually or in the aggregate, be reasonably likely to have a Material
\nAdverse Effect.<\/p>\n
(m) With respect to each Business Plan that is not subject
\nto United States law (each, a “Non-U.S. Benefit Plan”):<\/p>\n
(i) all employer and employee payments,
\n contributions or accruals (including premiums) for each Non-U.S. Benefit
\n Plan required by law or by the terms of such Non-U.S. Benefit Plan have
\n been made when due, or, if applicable, accrued, in accordance with “FAS
\n 87”;<\/p>\n
(ii) the fair market value of the assets of any
\n funded Non-U.S. Benefit Plan that is a Pension Plan (excluding any book
\n reserves or balance sheet accruals) equals or exceeds the benefit
\n obligations of such Plans determined on a PBO basis;<\/p>\n
(iii) each Non-U.S. Benefit Plan required to be
\n registered has been registered (including pursuant to the UK Pension
\n Schemes Act of 1993) and has been maintained in good standing with
\n applicable laws and regulatory authorities (including the UK Pension
\n Schemes Act of 1993);<\/p>\n
(iv) all amounts required to be reserved under each
\n book reserved Non-U.S. Benefit Plan have been so reserved in accordance
\n with normal accounting practices prevailing in the country where such
\n plan is maintained;<\/p>\n
(v) if intended to qualify for special tax
\n treatment, each Non-U.S. Benefit Plan meets all requirements for such
\n treatment and TRW knows of no circumstances that might give reason to
\n any applicable governmental authority to revoke such treatment;<\/p>\n
(vi) Section 4.13(l) of the TRW Disclosure Letter
\n lists each Non-U.S. Benefit Plan that is a defined benefit pension plan;
\n and<\/p>\n
(vii) No power has been exercised to provide
\n additional benefits in respect of any UK Affected Employee or to admit a
\n UK<\/p>\n
38<\/p>\n
Affected Employee on special terms and no proposal or announcement has
\n been made to any UK Affected Employee about the introduction,
\n continuance, increase or improvement of any pension, lump sum, death,
\n ill-health, disability or accident benefit.<\/p>\n
(n) There are no actions, proceedings or claims (other than
\nroutine claims for benefits) outstanding, pending or threatened by the UK
\nAffected Employees or any of them in respect of the TRW UK pension scheme
\nrelating to any act, event, omission or other matter arising out of or in
\nconnection with the TRW UK pension scheme.<\/p>\n
(o) TRW has taken all necessary action with respect to trade
\nunions, work councils and employee representatives required to be, or which
\nwould be customarily, taken prior to the date hereof in connection with the
\ntransactions contemplated by this Agreement.<\/p>\n
Section 4.14 Intellectual Property.<\/p>\n
(a) Section 4.14(a) of the TRW Disclosure Letter sets forth
\na true and complete list of all material (i) Patents, (ii) Trademarks, (iii)
\nCopyright, (iv) Domain Names and (v) Software (but excluding off-the-shelf
\nSoftware) included in the Equity Intellectual Property and Transferred
\nIntellectual Property. Within 30 days following the date of this Agreement,
\nSection 4.14(a) of the TRW Disclosure Letter will be updated to specify whether
\nsuch Intellectual Property constitutes Equity Intellectual Property or
\nTransferred Intellectual Property.<\/p>\n
(b) The Equity Intellectual Property and Transferred
\nIntellectual Property includes all of the Intellectual Property used or held for
\nuse primarily in the Business by the TRW Participants. The Business Intellectual
\nProperty includes all of the Intellectual Property used in the operation of the
\nBusiness immediately prior to the Closing (with the exception of Software
\nobtained pursuant to corporate-level agreements listed in Section 4.14(b) of the
\nTRW Disclosure Letter) and, to TRW’s knowledge, no facts or circumstances exist
\nwith respect to the Business Intellectual Property that would reasonably be
\nexpected to preclude, or limit or impair in any material respect, Buyer’s
\nability to conduct the Business as currently conducted.<\/p>\n
(c) To the knowledge of TRW, other than as set forth in
\nSection 4.14(c) of the TRW Disclosure Letter, no TRW Participant has interfered
\nwith, infringed upon, misappropriated or violated any Intellectual Property
\nrights of any third party. No TRW Participant has received written notice from
\nany third party alleging any such interference, infringement, misappropriation
\nor violation. To the knowledge of TRW, no third party has interfered with,
\ninfringed upon, misappropriated or violated any Business Intellectual Property
\nin any material respect and TRW has no knowledge of any information, materials,
\nfacts or circumstances that would render any of the Business Intellectual
\nProperty invalid or unenforceable in any material respect.<\/p>\n
39<\/p>\n
(d) The owned Business Intellectual Property, excluding the
\nLicensed Trademarks and the Licensed Intellectual Property, is owned by one of
\nthe TRW Participants free and clear of any Liens other than Permitted Liens.
\nExcept as disclosed in Section 4.14(d) of the TRW Disclosure Letter, one of the
\nTRW Participants owns all right, title and interest in and to, or has a valid
\nand enforceable right to use, by license or other agreement, and assign, convey
\nand otherwise transfer all of its right, title and interest in and to the
\nTransferred Intellectual Property to Buyer except where the failure to make such
\ntransfer, individually or in the aggregate, would not reasonably be likely to
\nresult in a Material Adverse Effect.<\/p>\n
(e) All material application, registration, maintenance and
\nrenewal fees in connection with the registered owned Business Intellectual
\nProperty and applications therefor have been paid and all material documents and
\ncertificates in connection with such registered owned Business Intellectual
\nProperty have been filed with the relevant patent, copyright, trademark or other
\nauthority in the United States, regional or non-U.S. jurisdictions, as the case
\nmay be, for the purposes of maintaining such registered owned Business
\nIntellectual Property except as would not reasonably be likely, individually or
\nin the aggregate, to result in a Material Adverse Effect.<\/p>\n
(f) Other than as set forth in Section 4.14(f) of the TRW
\nDisclosure Letter, no TRW Participant licenses any Business Intellectual
\nProperty to third parties, or permits third parties to use any Business
\nIntellectual Property rights and no TRW Participant owes any material royalties
\nor payments to any third party for using or licensing to others any Business
\nIntellectual Property.<\/p>\n
(g) The TRW Participants have taken commercially reasonable
\nsteps to protect the TRW Participants’ rights in confidential information and
\nTrade Secrets of the TRW Participants or as required by any other person who has
\nprovided its confidential or proprietary information, source code or Trade
\nSecrets to the TRW Participants, including by requesting that employees of the
\nBusiness assign to a TRW Participant their Intellectual Property rights created
\nfor the Business, except where the failure to take such steps would not
\nreasonably be likely to result in a material adverse impact or the Business.<\/p>\n
Section 4.15 Labor Relations; Employees. Except as set forth in
\nthe TRW Disclosure Letter, to the knowledge of TRW, none of the Affected
\nEmployees is represented by any labor organization and no union organizing
\nactivities have occurred with respect to Affected Employees within the past
\nyear. Except as set forth in the TRW Disclosure Letter, no TRW Participant is a
\nparty to or bound by any collective bargaining or similar agreement with any
\nlabor organization applicable to Affected Employees. Except as set forth in
\nSection 4.15 of TRW Disclosure Letter, (i) there is no labor strike, dispute,
\nlock-out or stoppage pending or, to the knowledge of TRW, threatened, against or
\naffecting the Business and the Business has not experienced any such strike,
\ndispute, lock-out or stoppage within the past two years and (ii) to the
\nknowledge of TRW, the Business has not materially breached or otherwise failed
\nto comply with the provisions of any collective bargaining or union contract and
\nthere are no material written grievances outstanding against the Business under
\nany such agreement or contract. With respect to<\/p>\n
40<\/p>\n
the Affected Employees, the TRW Participants have in the past been and are in
\ncompliance in all material respects with applicable laws respecting employment,
\nemployment practices, employee classification, labor relations, safety and
\nhealth, wages, hours and terms and conditions of employment except where
\nfailures to comply would not, individually or in the aggregate, be reasonably
\nlikely to result in a Material Adverse Effect. The TRW Participants have
\ncomplied with their payment obligations to all Affected Employees in respect of
\nall wages, salaries, commissions, bonuses, benefits, vacation pay and other
\ncompensation due and payable to such employees under any policy, practice,
\nagreement, plan, program or applicable law except where failures to comply would
\nnot, individually or in the aggregate, be reasonably likely to result in a
\nMaterial Adverse Effect.<\/p>\n
Section 4.16 Environmental Matters. Except as set forth in
\nSection 4.16 of the TRW Disclosure Letter, or except as has not, individually or
\nin the aggregate, resulted in, or would not be reasonably likely to result in, a
\nMaterial Adverse Effect:<\/p>\n
(a) The TRW Participants are, and within all applicable
\nstatutes of limitation have been, in compliance in all respects with all
\nEnvironmental Laws applicable to the operation of the Business as currently or
\nformerly conducted;<\/p>\n
(b) The TRW Participants have obtained all Environmental
\nPermits (each of which is in full force and effect) required for the conduct and
\noperation of the Business and are in compliance with the terms and conditions
\ntherein;<\/p>\n
(c) No review by, or approval of, any Governmental Entity or
\nother Person is required under any order or agreement currently in effect in
\nconnection with the execution or delivery of this Agreement and the consummation
\nof the transactions contemplated hereby; and<\/p>\n
(d) There is no Environmental Claim pending, or to the
\nknowledge of TRW, threatened, against any TRW Participant, or against any Person
\n(including without limitation any predecessor of any TRW Participant) whose
\nliability any TRW Participant has or may have retained or assumed either
\ncontractually or by operation of law, in connection with, related to or arising
\nout of the ownership or operation of the Business.<\/p>\n
(e) As soon as practicable following the date of this
\nAgreement, TRW will provide Buyer with a list of any Aboveground Storage Tanks
\nor Underground Storage Tanks that are beneath any Owned Real Property or Leased
\nReal Property as of the date of this Agreement.<\/p>\n
(f) TRW has previously furnished to Buyer or its
\nrepresentatives the results of any ground, water or soil monitoring undertaken
\nby the TRW Participants or undertaken by any Governmental Entity and known to
\nTRW relating to the TRW Participants or any real property currently or
\npreviously owned or leased by the TRW Participants.<\/p>\n
(g) Section 4.16 of the TRW Disclosure Letter identifies all
\nmaterial environmental audits, assessments or occupational health studies
\nundertaken by the TRW<\/p>\n
41<\/p>\n
Participants or its agents or undertaken by any Governmental Entity or any other
\nPerson and known to TRW, relating to the TRW Participants or any real property
\ncurrently or previously owned or leased by the TRW Participants. As soon as
\npracticable following the date of this Agreement, TRW will provide Buyer with a
\nlist of all material written communications between the TRW Participants and any
\nGovernmental Entity arising under or related to Environmental Laws.<\/p>\n
Section 4.17 Real Property.<\/p>\n
(a) Section 4.17(a) of the TRW Disclosure Letter includes a
\ncomplete and correct list of each parcel of Owned Real Property.<\/p>\n
(b) Section 4.17(b) of the TRW Disclosure Letter includes a
\ncomplete and correct list of all leases relating to the Leased Real Property.
\nTrue, correct and complete copies, including all amendments thereto, of each
\nsuch lease have been provided to Buyer or its representatives.<\/p>\n
(c) The applicable TRW Participant holds good, valid and
\nmarketable title to each parcel of Owned Real Property in fee simple absolute,
\nfree and clear of all Liens, except for Permitted Encumbrances and Permitted
\nLiens and is in exclusive possession thereof. To the knowledge of TRW, no
\nmaterial expenditures are required, in TRW’s reasonable discretion, to be made
\nfor the repair or maintenance of any improvements on the Owned Real Property or
\nfor the Owned Real Property to be used for its intended purpose other than
\nroutine repairs and maintenance in the ordinary course of business.<\/p>\n
(d) The applicable TRW Participant holds good, valid and
\nmarketable leasehold title to each parcel of Leased Real Property, free and
\nclear of all Liens, other Permitted Liens and Permitted Encumbrances, and is in
\nexclusive possession as lessee thereof. Each parcel of Leased Real Property is
\nheld under a valid, binding and enforceable lease, except as the enforceability
\nthereof may be limited by bankruptcy, insolvency, reorganization, moratorium,
\nand other similar laws relating to or limiting creditors’ rights generally. No
\nTRW Participant is in material default under any material agreement relating to
\nthe Leased Real Property nor, to the knowledge of TRW, is any other party
\nthereto in material default thereunder. There is no pending or, to the knowledge
\nof TRW, threatened action or proceeding that could materially interfere with the
\nuse by the lessee of any such Leased Real Property. To the knowledge of TRW, no
\nmaterial expenditures are required, in TRW’s reasonable discretion, to be made
\nfor the repair or maintenance of any improvements on the Leased Real Property
\nwhich exceed those set forth in the 2002 Capital Expenditure Plan (which is set
\nforth on Schedule 6.1(a)(xv)), or for routine repairs and maintenance in the
\nordinary course of business.<\/p>\n
(e) There are no condemnation proceedings or eminent domain
\nproceedings of any kind pending or, to the knowledge of TRW, threatened with
\nrespect to any portion of the Real Property.<\/p>\n
42<\/p>\n
(f) None of the improvements comprising the Real Property,
\nor the businesses conducted by any TRW Participant thereon, is in violation of
\nany building line or use or occupancy restriction, limitation, condition or
\ncovenant of record or any zoning or building law, code, or ordinance, public
\nutility or other easement or other applicable law, except for violations which,
\nindividually or in the aggregate, have not resulted in, and would not reasonably
\nbe likely to result in, a Material Adverse Effect.<\/p>\n
Section 4.18 Material Contracts.<\/p>\n
(a) Section 4.18 of the TRW Disclosure Letter lists each of
\nthe following Contracts of the TRW Participants that relate primarily to the
\nBusiness and exist as of the date hereof (the “Material Contracts”):<\/p>\n
(i) all material distributor and sales agent
\n agreements to which any of the TRW Entities is a party;<\/p>\n
(ii) the material contracts for the top 14 vendors
\n and top 20 customers of the Business, based on 2001 revenues of the
\n Business;<\/p>\n
(iii) all joint venture and partnership agreements and
\n similar material contracts involving a sharing of profits or expenses
\n (including joint research and development contracts);<\/p>\n
(iv) all material employment contracts with Affected
\n Employees whose base salary exceeds $150,000;<\/p>\n
(v) all material licenses, licensing arrangements,
\n and other Contracts providing in whole or in part for the use of, or
\n limiting the use of, Business Intellectual Property other than Contracts
\n entered into in the ordinary course of business which contain customary
\n provisions entitling the other party thereto to receive a license to use
\n Intellectual Property rights upon termination of such Contract in the
\n event the applicable TRW Entity is in material breach thereof provided
\n that any such Contracts have not been materially breached as of the date
\n of this Agreement;<\/p>\n
(vi) all loan agreements, indentures, letters of
\n credit, mortgages, security agreements, pledge agreements, deeds of
\n trust, bonds, notes, guarantees and other agreements and instruments
\n relating to the borrowing of money or obtaining of or extension of
\n credit pursuant to which an Aerospace Subsidiary or an Aerospace
\n Affiliate or any Subsidiary thereof is a guarantor or obligor and in
\n each case which will be an Assumed Liability;<\/p>\n
(vii) all Contracts that contain a provision or
\n covenant materially prohibiting, impairing, limiting or restricting, or
\n purporting to materially prohibit, impair, limit or restrict, the
\n ability of the TRW Participants to (i) sell or license any products or
\n services of or to any other<\/p>\n
43<\/p>\n
person in any material respect, (ii) engage in any line of business, or
\n (iii) compete with or to obtain products or services from any person or
\n limiting the ability of any person to provide products or services to
\n the TRW Participants;<\/p>\n
(viii) Contracts with any director, or officer, or
\n stockholder or Affiliate of the TRW Participants;<\/p>\n
(ix) Contracts granting any third party any rights of
\n first refusal, rights of first offer, preemptive rights, or similar
\n rights;<\/p>\n
(x) all material Contracts between any of the
\n Aerospace Affiliates, the Aerospace Subsidiaries or their Subsidiaries,
\n on one hand, and TRW or any Affiliate of TRW (other than the Aerospace
\n Affiliates and the Aerospace Subsidiaries), on the other hand;<\/p>\n
(xi) all asset purchase agreements and other
\n acquisition or divestiture agreements, including but not limited to any
\n agreements relating to the sale, lease or disposal of any Acquired
\n Assets or any assets of any Aerospace Subsidiary or Aerospace Affiliate
\n or any of their Subsidiaries (other than sales of inventory in the
\n ordinary course of business);<\/p>\n
(xii) Contracts or other commitments relating to
\n capital expenditure or expenditures in excess of $5 million in any
\n calendar year;<\/p>\n
(xiii) all Contracts relating to the lease of real
\n property leased (whether as lessor or lessee), used or operated by the
\n TRW Participants;<\/p>\n
(xiv) all collective bargaining agreements; and<\/p>\n
(xv) all settlement contracts, consent orders and
\n similar agreements under which the TRW Participants have ongoing
\n obligations.<\/p>\n
(b) Each Material Contract is valid and binding on the TRW
\nParticipants pursuant to its terms and is in full force and effect, except as
\ndisclosed in Section 4.18 of the TRW Disclosure Letter. None of the TRW
\nEntities, or, to the knowledge of TRW, any other party thereto, is in breach of
\nor default under, any Material Contract and, to the knowledge of TRW, no event
\nhas occurred and no condition exists which, with the lapse of time, the giving
\nof notice, or both, or the happening of any further event or condition, would
\nbecome a default of a provision under any Material Contract, except for such
\nbreaches or defaults which have not resulted in, or would not be reasonably
\nlikely to result in, individually or in the aggregate, a Material Adverse
\nEffect. None of the TRW Entities has released or waived any material right or
\nbenefit under any such Material Contract other than in the ordinary course of
\nbusiness consistent with past practices.<\/p>\n
44<\/p>\n
Section 4.19 Title to Assets. The TRW Participants (i) own or
\nhave other legal rights to all of the Assets and (ii) have good title to the
\nAssets owned by them free and clear of all Liens, other than Permitted Liens and
\nPermitted Encumbrances; provided, that this representation does not concern
\nIntellectual Property or Real Property which are the subject of the
\nrepresentations in Sections 4.14 and 4.17 hereof.<\/p>\n
Section 4.20 Affiliated Transactions. Except as described in
\nSection 4.20 of the TRW Disclosure Letter, and except for trade payables and
\nreceivables arising in the ordinary course of business for purchases and sales
\nof goods or services consistent with past practice on terms no less favorable
\nthan those available from non-Affiliated parties, the Aerospace Subsidiaries,
\nthe Aerospace Affiliates or their Subsidiaries have not been a party over the
\npast 12 months to any material transaction or agreement with TRW or any
\nAffiliate of TRW (other than the Aerospace Subsidiaries, the Aerospace
\nAffiliates or their respective Subsidiaries). Except as set forth in Section
\n4.20 of the TRW Disclosure Letter, there are no material agreements or other
\ntransactions between the TRW Participants, on the one hand, and any Affiliate of
\nthe TRW Participants, on the other hand, and no director or officer of a TRW
\nParticipant has, directly or indirectly, any material interest in any of the
\nassets or properties of the TRW Participants. Prior to the Closing, all amounts
\ndue and owing to or from the TRW Participants by or to any of the Affiliates of
\nthe TRW Participants (excluding employee compensation and other incidents of
\nemployment) shall be paid in full.<\/p>\n
Section 4.21 Product Liability; Airworthiness. Except as set
\nforth in Section 4.21 of the TRW Disclosure Letter, none of the TRW Participants
\nhas received any written notice relating to, nor does TRW have any knowledge of
\nany facts or circumstances which are reasonably expected to give rise to, any
\nclaim involving any service provided or any product designed, manufactured,
\nserviced, produced, modified, distributed or sold by or on behalf of the TRW
\nParticipants resulting from an alleged defect in design, manufacture, materials
\nor workmanship, performance, or any alleged failure to warn, or from any alleged
\nbreach of implied warranties or representations, or any alleged noncompliance
\nwith any applicable laws, requirements, specifications, rules and regulations,
\nother than notices or claims that have been settled or resolved by the TRW
\nParticipants prior to the date of this Agreement or those that would not,
\nindividually or in the aggregate, and would not reasonably be likely to have,
\nhave a Material Adverse Effect. Except as set forth in Section 4.21 of the TRW
\nDisclosure Letter, there is no publicly and formally announced rule or
\nregulation by any Governmental Entity that could reasonably be expected to
\naffect the various airworthiness or repair station approvals, licenses, permits,
\nqualifications or certifications applicable to the goods, services, assets,
\nfacilities or operations of the TRW Participants, except to the extent that such
\nrules or regulations would not, individually or in the aggregate, have, and
\nwould not reasonably be likely to have, a Material Adverse Effect.<\/p>\n
Section 4.22 Insurance. Section 4.22 of the TRW Disclosure
\nLetter lists all material insurance policies or contracts (or programs) of
\nself-insurance owned or held by any TRW Participant on the date hereof which
\ncover the Business or the Assets. All such insurance policies are in full force
\nand effect, are valid and enforceable, all premiums due thereunder have been
\npaid and cover against the risks of the nature<\/p>\n
45<\/p>\n
normally insured against by entities in the same or similar lines of business in
\ncoverage amounts typically and reasonable carried by such entities. In the last
\ntwo years, no TRW Participant has received notice of cancellation or termination
\nother than in connection with normal renewals, of any such insurance policies,
\nand no claim is pending as of the date of this Agreement under any insurance
\npolicy involving an amount in excess of $750,000.<\/p>\n
Section 4.23 Inappropriate Payments. None of the TRW Participants nor,
\nto the knowledge of TRW, any of their respective officers, directors, principal
\nstockholders, employees, agents or representatives with respect to the Business
\nhas knowingly violated any law relating to bribery, kickbacks, illegal political
\ncontributions, payments from corporate funds to governmental officials, in their
\nindividual capacities, for the purpose of affecting their action or the action
\nof the government they represent, to obtain favorable treatment in securing
\nbusiness or licenses or to obtain special concessions, or illegal payments from
\ncorporate funds to obtain or retain business.<\/p>\n
Section 4.24 Entire Business; Sufficiency of Assets. The sale of the
\nAssets by TRW and the Asset Selling Subsidiaries, together with the sale of the
\nEquity Interests by TRW and the TRW Selling Shareholders, to Buyer pursuant to
\nthis Agreement will convey to Buyer the entire Business and all of the assets
\nand properties used or held for use (whether owned, leased or held under
\nlicense) primarily in connection with the operation of the Business as
\nheretofore conducted (except for the Retained Assets) including, without
\nlimitation, all assets and properties relating to the Business reflected in the
\nbalance sheet of the Business as of December 31, 2001 and assets and properties
\nacquired since December 31, 2001 in the conduct of the Business (except for the
\nRetained Assets and assets and properties disposed of since such date without
\nviolation of the terms and provisions of this Agreement). Except as set forth in
\nSection 4.24 of the TRW Disclosure Letter and except for the Retained Assets
\n(other than those Retained Assets described in Section 2.3(b)(vii) hereof) as of
\nthe Closing Date, the Assets will constitute all of the assets used by TRW
\nimmediately prior to the Closing to conduct the Business as heretofore
\nconducted, other than the rights of Buyer under the Ancillary Agreements.<\/p>\n
Section 4.25 Brokers and Finders. Except for Goldman, Sachs & Co. and
\nCredit Suisse First Boston Corporation, whose fees and expenses will be paid by
\nTRW, none of the TRW Entities has employed any broker, financial advisor or
\nfinder or incurred any liability for any broker, financial advisory or finders’
\nfees in connection with this Agreement or the transactions contemplated hereby.<\/p>\n
Section 4.26 No Other Representations and Warranties. No TRW Participant
\nor any other Person makes any other express or implied representation or
\nwarranty on behalf of a TRW Participant or any of their Affiliates other than as
\nexpressly set forth in this Article.<\/p>\n
46<\/p>\n
ARTICLE V<\/p>\n
REPRESENTATIONS AND WARRANTIES OF BUYER<\/p>\n
Buyer represents and warrants to TRW as follows:<\/p>\n
Section 5.1 Organization and Existence. Buyer and each of Buyer’s
\nAffiliates who will participate in the transactions contemplated by this
\nAgreement is a legal entity duly established, validly existing and (where
\napplicable) in good standing under the laws of its jurisdiction of organization
\nor incorporation, as the case may be, and has all requisite power and authority
\nto own, lease and operate its properties and to conduct its business as it is
\ncurrently conducted, except where the failure to have such power and authority,
\nindividually or in the aggregate, has not resulted in, and is not reasonably
\nlikely to result in, a material adverse effect on Buyer’s ability to consummate
\nthe transactions contemplated hereby. Buyer, and each of Buyer’s Affiliates who
\nwill participate in the transactions contemplated by this Agreement, is duly
\nqualified or licensed to do business under the laws of each jurisdiction in
\nwhich the nature of the activities conducted by it makes such qualification
\nnecessary, except where the failure to be so qualified or licensed, individually
\nor in the aggregate, has not resulted or is not reasonably likely to result, in
\na material adverse effect on Buyer’s ability to consummate the transactions
\ncontemplated hereby.<\/p>\n
Section 5.2 Power and Authority. Buyer, and each of Buyer’s Affiliates
\nwho will participate in the transactions contemplated by this Agreement, has all
\nrequisite corporate or other organizational power and authority to execute and
\ndeliver, to perform its obligations under, and to consummate the transactions
\ncontemplated by, this Agreement and the Ancillary Agreements to which it is a
\nparty. Buyer, and each of Buyer’s Affiliates who will participate in the
\ntransactions contemplated by this Agreement, has all requisite corporate or
\nother organizational power and, as of the Closing will have the corporate or
\nother organizational authority to execute and deliver, to perform its
\nobligations under, and to consummate the transactions contemplated by, this
\nAgreement and the Ancillary Agreements to which it is a party.<\/p>\n
Section 5.3 Authorization. The execution and delivery by Buyer (and each
\nof Buyer’s Affiliates who will participate in the transactions contemplated by
\nthis Agreement) of, the performance by Buyer (and each of Buyer’s Affiliates who
\nwill participate in the transactions contemplated by this Agreement) of its
\nobligations under, and the consummation by Buyer (and each of Buyer’s Affiliates
\nwho will participate in the transactions contemplated by this Agreement) of the
\ntransactions contemplated by this Agreement have been, and the other Ancillary
\nAgreements, as of the Closing, will be, duly authorized by all requisite
\ncorporate or other organizational action of Buyer (and each of Buyer’s
\nAffiliates who will participate in the transactions contemplated by this
\nAgreement).<\/p>\n
Section 5.4 Binding Effect. This Agreement has been duly executed and
\ndelivered by Buyer and is, and each Ancillary Agreement will be duly executed
\nand delivered by Buyer (and each of Buyer’s Affiliates who is a party to such
\nAncillary <\/p>\n
47<\/p>\n
Agreement) and when executed and delivered by all parties thereto will be, the
\nvalid and binding obligation of Buyer (and as applicable, Buyer’s Affiliates),
\nenforceable against Buyer (and as applicable, Buyer’s Affiliates) in accordance
\nwith their terms, assuming due authorization, executions and delivery by the
\nrelevant TRW Entity.<\/p>\n
Section 5.5 No Defaults; Consents.<\/p>\n
(a) Neither the execution and delivery of this Agreement or any
\nAncillary Agreement, nor the consummation of the transactions contemplated by
\nthis Agreement or the Ancillary Agreements, will violate, breach, contravene,
\nconflict with, result in the termination or acceleration of, entitle any party
\nto any payment under, entitle any party to exercise any right of first refusal,
\nfirst offer, preemptive right or other option right under, or otherwise
\nconstitute or give rise to a Default under, as applicable, (i) any provision of
\nthe articles of incorporation, the by-laws or similar organizational documents
\nof Buyer or any of Buyer’s Affiliates, (ii) any Contract or other instrument or
\nobligation to which Buyer or any of Buyer’s Affiliates is a party; or (iii) any
\nwrit, injunction, decree, statute, rule or regulation applicable to Buyer or
\nBuyer’s Affiliates; except in the case of the foregoing clauses (ii) and (iii)
\nsuch violations, breaches, conflicts, terminations, accelerations, entitlements,
\nor Defaults which, individually or in the aggregate, have not resulted in, or
\nwhich would not reasonably be likely to result in, a material adverse effect on
\nBuyer’s ability to consummate the transactions contemplated hereby.<\/p>\n
(b) No filing with or notice to, and no permit, authorization,
\nregistration, consent or approval of, any Governmental Entity is required on the
\npart of Buyer or any of its Subsidiaries for the execution, delivery and
\nperformance by Buyer of this Agreement or the consummation by Buyer of the
\ntransactions contemplated hereby, except (i) the filing of a notification and
\nreport form under the HSR Act and the termination or expiration of any waiting
\nperiod under the HSR Act, (ii) the filings, consents, approvals or clearances
\nrequired under any foreign antitrust or investment laws (including without
\nlimitation under EU Merger Regulation) or (iii) where the failure to obtain such
\npermits, authorizations, consents or approvals or to make such filings or give
\nsuch notice would not have, individually or in the aggregate, a material adverse
\neffect on Buyer’s ability to consummate the transactions contemplate hereby.<\/p>\n
Section 5.6 Litigation. There are no judgments, decrees, orders, writs
\nor injunctions, nor any actions, claims, suits or proceeding before or involving
\nany Governmental Entity or private arbitration tribunal pending or, to the
\nknowledge of Buyer, threatened, against Buyer or any of Buyer’s Affiliates which
\nhas resulted, or which would be reasonably likely to result, in a prohibition
\nagainst, or a material delay in completing, all or any part of the transactions
\ncontemplated by this Agreement.<\/p>\n
Section 5.7 Financing. Buyer has or will have available, at or prior
\nto Closing, sufficient cash in immediately available funds to pay the Purchase
\nPrice and necessary to consummate the transactions contemplated hereby. Buyer
\nhas received the executed commitment letter attached to Schedule 5.7 hereof (the
\n“Commitment Letter”) with respect to the financing arrangements for the
\ntransactions contemplated hereby (the “Financing”). As of the date of this
\nAgreement, the Commitment Letter is in full force<\/p>\n
48<\/p>\n
and effect and has not been amended or rescinded. The aggregate proceeds of the
\nFinancing provided for in the Commitment Letter, together with available cash
\nand other credit facilities available to Buyer, will be sufficient to pay the
\nPurchase Price and satisfy the other obligations of Buyer and its Affiliates
\nnecessary to consummate the transactions contemplated hereby. As of the date
\nhereof, Buyer believes that such Financing will be obtained.<\/p>\n
Section 5.8 Brokers or Finders. Except for Merrill Lynch, whose fees
\nand expenses will be paid by Buyer, neither Buyer, nor any Affiliate thereof,
\nhas employed any broker, financial advisor or finder or incurred any liability
\nfor any broker, financial advisory or finders’ fees in connection with this
\nAgreement or the transactions contemplated hereby.<\/p>\n
Section 5.9 Investment Representations.<\/p>\n
(a) Buyer is acquiring the Equity Interests to be acquired by it
\nhereunder for its own account, solely for the purpose of investment and not with
\na view to, or for sale in connection with, any distribution thereof in violation
\nof the federal securities laws or any applicable foreign or state securities
\nlaw.<\/p>\n
(b) Buyer is an “accredited investor” as defined in Rule 501(a)
\npromulgated under the Securities Act of 1933, as amended.<\/p>\n
(c) Buyer understands that the acquisition of the Equity Interests to
\nbe acquired by it pursuant to the terms of this Agreement involves substantial
\nrisk. Buyer and its officers have experience as an investor in securities and
\nEquity Interests of companies such as the ones being transferred pursuant to
\nthis Agreement and acknowledges that it can bear the economic risk of its
\ninvestment and has such knowledge and experience in financial or business
\nmatters that Buyer is capable of evaluating the merits and risks of its
\ninvestment in the Equity Interests to be acquired by it pursuant to the
\ntransactions contemplated hereby.<\/p>\n
(d) Buyer understands that the Equity Interests to be acquired by it
\nhereunder have not been registered under the Securities Act on the basis that
\nthe sale provided for in this Agreement is exempt from the registration
\nprovisions thereof. Buyer acknowledges that such securities may not be
\ntransferred or sold except pursuant to the registration and other provisions of
\napplicable securities laws or pursuant to an applicable exemption therefrom.<\/p>\n
(e) Buyer acknowledges that the offer and sale of the Equity Interests
\nto be acquired by it in the transactions contemplated hereby has not been
\naccomplished by the publication of any advertisement.<\/p>\n
Section 5.10 No Other Representations and Warranties. Except for the
\nrepresentations and warranties contained in this Article V, neither Buyer nor
\nany other Person makes any other express or implied representation or warranty
\non behalf of Buyer or any of its Affiliates.<\/p>\n
49<\/p>\n
Section 5.11 Certain Transactions. There are no existing agreements or
\narrangements pursuant to which Buyer will divest or otherwise dispose of the
\nassets of or equity in, or by any other manner, the Business, except as set
\nforth in Sections 6.3 and 6.4.<\/p>\n
ARTICLE VI<\/p>\n
COVENANTS<\/p>\n
Section 6.1 Conduct of the Business.<\/p>\n
(a) During the period from the date hereof until the Closing, except
\nas otherwise provided for in this Agreement or any Ancillary Agreement or with
\nthe prior written consent of Buyer (which consent shall not be unreasonably
\nwithheld or delayed), TRW shall, and shall cause each of the other TRW
\nParticipants (other than the Spanish Affiliate), and will use its reasonable
\nbest efforts to cause the Spanish Affiliate (including by not providing consent
\nto an action that would otherwise be prohibited by this Section 6.1) to, (1)
\noperate the Business in the ordinary course consistent with past practice; (2)
\nmaintain the existing assets of the Business in the ordinary course consistent
\nwith past practice and (3) use reasonable best efforts, generally consistent
\nwith existing practices, to keep available the services of employees and
\npreserve relationships with all key customers, suppliers, licensors, licensees,
\ndistributors, creditors and other Persons having business dealings with the
\nBusiness in order to preserve, in all material respects, the goodwill and
\nongoing operations of the Business at the Closing. Except (a) for actions
\nnecessary to effectuate the Preliminary Transfers, (b) for actions permitted
\npursuant to the first sentence of this Section 6.1(a), and (c) as set forth in
\nSchedule 6.1(a) hereof, TRW shall not, and shall cause the other TRW
\nParticipants (other than the Spanish Affiliate, for which TRW shall use its
\nreasonable best efforts to cause the Spanish Affiliate) not to (in each case
\nonly with respect to the Business):<\/p>\n
(i) enter into any sale commitment in excess of $10 million
\n or purchase commitment in excess of $5 million;<\/p>\n
(ii) other than in the ordinary course of business consistent
\n with past practice, sell, transfer, lease, sublease, license or
\n otherwise dispose of any real property, real property interest, personal
\n property (tangible or intangible) or any other material asset that would
\n otherwise be an Acquired Asset or any asset of any Aerospace Subsidiary
\n (or Subsidiary thereof) or any Aerospace Affiliate (or Subsidiary
\n thereof);<\/p>\n
(iii) enter into any lease of real property or any renewals
\n thereof involving a term of one (1) year or more;<\/p>\n
(iv) enter into any lease of personal property or any renewals
\n thereof involving a term of one (1) year or more, other than in the
\n ordinary course of business, consistent with past practice;<\/p>\n
50<\/p>\n
(v) other than in the ordinary course of business consistent
\n with past practice, enter into any transaction, contract or commitment
\n or otherwise incur any obligation or liability that would constitute an
\n Assumed Liability;<\/p>\n
(vi) abandon, sell, license, assign, or grant any security
\n interest in or to any material item of the Business Intellectual
\n Property other than in the ordinary course of business;<\/p>\n
(vii) fail to perform or cause to be performed all applicable
\n material filings, recordings and other acts, and pay or cause to be paid
\n all required fees and taxes, to maintain and protect its interest, in
\n each and every material item of the Business Intellectual Property,
\n except where it has been determined by a TRW Entity in the ordinary
\n course of business, not to maintain or protect such interests;<\/p>\n
(viii) (A) grant any increase in compensation or benefits or
\n make any bonus payments to any of its directors, officers, employees or
\n consultants except in the ordinary course of business consistent with
\n past practice, (B) adopt or amend (or otherwise increase or accelerate
\n the vesting of benefits or severance with respect to or make any payment
\n not otherwise due to) any employee benefit plan, agreement or
\n arrangement with or for the benefit of any of its directors, officers,
\n employees or consultants that Buyer could assume or employ as of the
\n Closing Date pursuant to this Agreement, or (C) take any action that
\n could give rise to severance benefits payable to any employee as a
\n result of consummation of any of the transactions contemplated by this
\n Agreement except in each case (x) as required by contractual commitments
\n existing on the date hereof and(y) as required by applicable law;<\/p>\n
(ix) except in the ordinary course of business, permit or
\n allow any Acquired Asset or any asset of any Aerospace Subsidiary (or
\n Subsidiary thereof) or any Aerospace Affiliate (or Subsidiary thereof)
\n to be subjected to any Lien, other than Permitted Liens, Permitted
\n Encumbrances and material Liens that will be released at or prior to the
\n Closing;<\/p>\n
(x) make any material change in any method of accounting or
\n accounting practice or policy used by the TRW Entities, other than such
\n changes required by GAAP or applicable law;<\/p>\n
(xi) except in the ordinary course of business consistent with
\n past practice, enter into, modify, extend or terminate any Material
\n Contract or enter into a Contract that would be a Material Contract if
\n in existence on the date hereof; provided that in no event shall any TRW
\n Participant or any Affiliate thereof enter into any new hedging Contract
\n (other than a replacement of any existing hedging Contract, on the same<\/p>\n
51<\/p>\n
economic terms and conditions, that is entered into in connection with
\n transferring the hedging Contracts that primarily relate to the Business
\n to Buyer);<\/p>\n
(xii) settle any suit, claim, action or proceeding, whether
\n pending on the date hereof or hereafter made or brought if such
\n settlement contains injunctive, equitable or other provisions that
\n affect the ongoing operation of the Business;<\/p>\n
(xiii) with respect to any Aerospace Subsidiary (or Subsidiary
\n thereof) or any Aerospace Affiliate (or Subsidiary thereof), (A) redeem,
\n purchase or otherwise acquire any shares of its capital stock or any
\n securities or obligations convertible into or exchangeable for any
\n shares of its capital stock, or any options, warrants or conversion or
\n other rights to acquire any shares of its capital stock or any such
\n securities or obligations; (B) effect any reorganization or
\n recapitalization; (C) split, combine or reclassify any of its capital
\n stock or issue or authorize or propose the issuance of any other
\n securities in respect of, in lieu of or in substitution for, shares of
\n its capital stock; or (D) issue, deliver, or sell, or authorize or
\n propose the issuance, delivery or sale (including the grant of any
\n encumbrance) of, any shares of any class of its capital stock (including
\n shares held in treasury), any securities convertible into or exercisable
\n or exchangeable for any such shares, any notes, bonds or other
\n securities or any rights, warrants or options to acquire same or any
\n other interest;<\/p>\n
(xiv) merge with, enter into a consolidation with or acquire
\n an interest of 5% or more in any Person or acquire substantially all of
\n the assets or business of any Person;<\/p>\n
(xv) make any capital expenditure or commitment for any
\n capital expenditure in excess of $1 million individually; provided,
\n however, that the Business can make any capital expenditures or
\n commitments that are reflected in its 2002 Capital Expenditure Plan, a
\n true, accurate and complete copy of which is set forth on Schedule
\n 6.1(a)(xv);<\/p>\n
(xvi) permit any Aerospace Subsidiary or Aerospace Affiliate,
\n or any of their respective Subsidiaries to incur or guarantee additional
\n indebtedness for borrowed money individually in excess of $1 million
\n individually; provided that this restriction shall not apply to the
\n Spanish Affiliate to the extent that the Spanish Affiliate may incur or
\n guarantee such additional indebtedness without the consent of TRW;<\/p>\n
(xvii) except as otherwise explicitly permitted by this
\n Agreement or required by applicable law, amend or restate the
\n certificate of incorporation or by-laws (or other organizational
\n documents) of any <\/p>\n
52<\/p>\n
Aerospace Subsidiary or Aerospace Affiliate, or any of their respective
\n Subsidiaries; provided that this restriction shall not apply to the
\n Spanish Affiliate to the extent that the Spanish Affiliate may amend or
\n restate such organizational documents without the consent of TRW;<\/p>\n
(xviii) take or agree or commit to take any action that would
\n make any representation or warranty of TRW under this Agreement
\n inaccurate in any material respect, at, or as of any time prior to, the
\n Closing Date or that would, or would be reasonably likely to, result in
\n any of the conditions set forth in Article VII not being satisfied on
\n the Closing Date (provided, however that a breach of this covenant shall
\n only be considered a breach of representation and warranty for purposes
\n of Article IX); and<\/p>\n
(xix) agree, commit or resolve to do any of the foregoing.<\/p>\n
Notwithstanding the foregoing, during the thirty (30) Business Days immediately
\npreceding the anticipated Closing Date, TRW shall, and shall cause all TRW
\nParticipants to, settle intercompany accounts payable and accounts receivable
\nand arrange for the termination of other matters as contemplated by this
\nAgreement, including Sections 2.3 and 2.4 hereof. TRW shall determine the method
\nby which such intercompany accounts are eliminated including, but not limited
\nto, by means of setoff, settlement or capital contribution. TRW shall terminate
\nthe involvement of the Business in TRW’s accounts receivable securitization
\nprogram, terminate the related security interests, and have the previously
\ntransferred receivables transferred back to the Business prior to the Closing.<\/p>\n
(b) Promptly following the date hereof, Buyer shall appoint a
\nrepresentative who shall have authority to respond to any request for consent to
\na TRW Participant taking an action that would otherwise be prohibited by Section
\n6.1(a) hereof. Promptly following the appointment of such representative, Buyer
\nshall provide TRW with the name and contact information for such representative.<\/p>\n
Section 6.2 Access to Information.<\/p>\n
(a) TRW shall permit, and shall cause the other TRW Participants to
\npermit, to the extent permitted by law, Buyer and any of its agents,
\nrepresentatives, advisors and consultants to have reasonable access to the
\npremises taking into account, among other things, the level of disruption to the
\noperations at any facility, the number of employees at such facility and the
\nsize of such facility, and reasonable access to the non-privileged books and
\nrecords of the TRW Participants related to the Business (including records and
\nfiles relating to Taxes), and to the officers and employees of the TRW Entities
\nwith knowledge of the whereabouts and\/or contents of such books and records;
\nprovided, such access does not interfere with the conduct of, or otherwise
\ndisrupt, the Business or the other businesses of TRW and is consistent with
\napplicable laws and regulations (including, without limitation, industrial
\nsecurity and export control laws and regulations); provided, further, that any
\nsuch access shall occur after reasonable notice and during normal business
\nhours. In an effort to prevent any interference or disruption caused by such
\naccess, TRW may, at its sole discretion, reasonably limit the number of<\/p>\n
53<\/p>\n
individuals and the number of visits to its facilities. Buyer shall coordinate
\nall such access with a TRW employee who will be identified to Buyer promptly
\nafter the execution of this Agreement, and shall not directly or indirectly
\ncontact any other employee of TRW or of the Business without the prior approval
\nof the designated employee.<\/p>\n
(b) Any information regarding the Business or Assets heretofore or
\nhereafter obtained from TRW or its Subsidiaries or Affiliates by Buyer or their
\nrepresentatives shall be subject to the terms of the Confidentiality Agreement,
\nand such information shall be held in confidence by Buyer and its
\nrepresentatives in accordance with the terms of the Confidentiality Agreement.<\/p>\n
(c) If requested by Buyer, TRW shall allow Ernst & Young LLP personnel
\nwho are familiar with the Business, on behalf of Buyer, to conduct as promptly
\nas practicable following the Closing Date an audit of the financial statements
\nof the Business as of, and for the twelve months ended, December 31, 2000 and
\nDecember 31, 2001, and shall cooperate with the conduct of such audit. The cost
\nof such audit shall be borne by Buyer.<\/p>\n
Section 6.3 Reasonable Best Efforts.<\/p>\n
(a) Upon the terms and subject to the conditions of this Agreement and
\nthe Ancillary Agreements, each of the parties hereto shall use its reasonable
\nbest efforts to take, or cause to be taken, all appropriate actions, and to do,
\nor cause to be done, all things necessary, proper or advisable under applicable
\nlaws and regulations to consummate and make effective the transactions
\ncontemplated by this Agreement and the Ancillary Agreements as promptly as
\npracticable including, without limitation, (i) subject to Section 6.4, the
\npreparation and filing of all forms, registrations and notices required to be
\nfiled to consummate the transactions contemplated by this Agreement and the
\nAncillary Agreements and the taking of such actions as are necessary to obtain
\nany requisite approvals, consents, orders, exemptions or waivers by any third
\nparty or Governmental Entity and (ii) using their reasonable best efforts to
\ncause the satisfaction of all conditions to Closing. Subject to Section 6.4,
\neach party shall promptly consult with the other with respect to, provide any
\nnecessary information with respect to, and provide copies of all filings made by
\nsuch party with any Governmental Entity or any other information supplied by
\nsuch party to a Governmental Entity in connection with this Agreement and the
\nAncillary Agreements and the transactions contemplated hereby and thereby.
\nSubject to Section 6.4, TRW and Buyer shall, and shall cause their respective
\nAffiliates to, with respect to a threatened or pending preliminary or permanent
\ninjunction or other order, decree or ruling or statute, rule, regulation or
\nexecutive order that would adversely affect the ability of any party to this
\nAgreement or an Ancillary Agreement to consummate the transactions contemplated
\nhereby or thereby, use their respective reasonable best efforts to prevent the
\nentry, enactment or promulgation thereof, as the case may be (including by
\npursuing any available appeal process).<\/p>\n
(b) Subject to Section 6.4, each party hereto shall promptly inform
\nthe other of any communication from any Governmental Entity regarding any of the
\ntransactions contemplated by this Agreement and the Ancillary Agreements.
\nSubject to<\/p>\n
54<\/p>\n
Section 6.4, if any party or Affiliate thereof receives a request for additional
\ninformation or documentary material from any such Governmental Entity with
\nrespect to the transactions contemplated by this Agreement, then such party will
\nuse its reasonable best efforts to make, or cause to be made, as soon as
\npracticable and after consultation with the other party, an appropriate response
\nin compliance with such request.<\/p>\n
(c) Neither this Section 6.3 nor Section 6.4 shall be deemed to require
\nany party hereto to sell or otherwise dispose, hold separate, agree to sell or
\notherwise dispose of any assets or facilities, or to take any other actions
\naffecting, or accept any limitations on, its ability, the ability of its
\nAffiliates or the ability of the Business, to own their respective assets or
\nconduct their respective businesses substantially as currently conducted or
\nproposed to be conducted, which, if such actions or limitations were with
\nrespect to a comparable amount of assets, businesses or product lines of the
\nBusiness would be reasonably likely, individually or in the aggregate, to have a
\nMaterial Adverse Effect on the Business. Any action or limitation contemplated
\nby this Section 6.3 or by Section 6.4 affecting the ability of TRW, Buyer or
\ntheir Affiliates, to own their respective assets or conduct their respective
\nbusinesses substantially as currently conducted or proposed to be conducted
\nshall not be required to be effective prior to the Closing.<\/p>\n
Section 6.4 Consents and Approvals.<\/p>\n
(a) Without limiting the generality of the undertakings pursuant to
\nSection 6.3 and subsections (b) and (c) of this Section 6.4 and upon the terms
\nand subject to the conditions herein provided, each of TRW and Buyer shall use
\nits reasonable best efforts to take, or cause to be taken, all action and to do,
\nor cause to be done, all things necessary under applicable antitrust laws and
\nregulations to consummate and make effective the transactions contemplated by
\nthis Agreement, including, without limitation, (i) to comply promptly with all
\nlegal requirements which may be imposed on it with respect to this Agreement and
\nthe transactions contemplated hereby by any Governmental Entities with
\nregulatory jurisdiction over enforcement of any applicable antitrust laws
\n(“Governmental Antitrust Entity”) (which actions shall include, without
\nlimitation, furnishing all information required by applicable law in connection
\nwith approvals of or filings with any Governmental Antitrust Entity), including
\nfiling, or causing to be filed, as promptly as practicable, any required
\nnotification and report forms (x) under the HSR Act with the Federal Trade
\nCommission and the Antitrust Division of the United States Department of Justice
\nor (y) under other applicable non-U.S. laws with the applicable non-U.S.
\nGovernmental Antitrust Entities including without limitation filings required
\npursuant to the EU Merger Regulation, (ii) to obtain any consent, authorization,
\norder or approval of, or any exemption by, any Governmental Antitrust Entity
\nrequired to be obtained or made by TRW and Buyer, or any of their Subsidiaries
\nor Affiliates in connection with the transaction contemplated by this Agreement
\nor the taking of any action contemplated by this Agreement, and (iii) to take
\nany action reasonably necessary to defend vigorously, lift, mitigate or, rescind
\nthe effect of any litigation or administrative proceeding involving any
\nGovernmental Antitrust Entity adversely affecting the transaction contemplated
\nby this Agreement or this Agreement, including promptly appealing any adverse
\ncourt or administrative decision. Without limitation of the foregoing, TRW,
\nBuyer and their respective Affiliates shall not extend any waiting period<\/p>\n
55<\/p>\n
under the HSR Act, the EU Merger Regulation or any other foreign antitrust
\nmerger control laws or enter into any agreement with the FTC or the Antitrust
\nDivision not to consummate the transactions contemplated by this Agreement,
\nexcept with the prior written consent of the other parties hereto.<\/p>\n
(b) Without limiting the generality of the undertakings pursuant to
\nSection 6.3 and subsections (a) and (c) of this Section 6.4 and subject to
\nappropriate confidentiality protections, TRW and Buyer shall each furnish to the
\nother such necessary information and reasonable assistance as the other party
\nmay request in connection with the foregoing and, shall each provide counsel for
\nthe other party with copies of all filings made by such party, and all
\ncorrespondence between such party (and its advisors) with any Governmental
\nAntitrust Entity and any other information supplied by such party and such
\nparty’s Affiliates to a Governmental Antitrust Entity in connection with this
\nAgreement and the transactions contemplated hereby, provided, however, that
\nmaterials may be redacted (i) to remove references concerning the valuation of
\nthe Business and (ii) as necessary to comply with contractual arrangements. Each
\nparty shall, subject to applicable law permit counsel for the other party to
\nreview in advance, and consider in good faith the views of the other party in
\nconnection with, any proposed written communication to any Governmental
\nAntitrust Entity. TRW and Buyer agree not to participate, or to permit their
\naffiliates to participate, in any substantive meeting or discussion, either in
\nperson or by telephone, with any Governmental Antitrust Entity in connection
\nwith this Agreement and the transactions contemplated hereby unless it consults
\nwith the other party in advance and, to the extent not prohibited by such
\nGovernmental Antitrust Entity, gives the other party the opportunity to attend
\nand participate. Upon the terms and subject to the conditions herein provided,
\nin case at any time after the Closing Date any further action is necessary or
\ndesirable to secure the approvals from any and all Governmental Antitrust
\nEntities necessary to carry out the purposes of this Agreement, the proper
\nofficers and\/or directors of the parties shall use their best efforts to take or
\ncause to be taken all such necessary action.<\/p>\n
(c) Consistent with the undertakings pursuant to Section 6.3 and
\nsubsections (a) and (b) of this Section 6.4, TRW and Buyer agree to take or
\ncause to be taken the following actions: (i) provide as promptly as practicable
\ninformation and documents requested by any Governmental Antitrust Entity
\nnecessary, proper or advisable to permit consummation of the transactions
\ncontemplated by this Agreement; (ii) without in any way limiting the provisions
\nof (c)(i) above, use its best efforts to certify as soon as practicable their
\nsubstantial compliance with any requests for additional information or
\ndocumentary material that may be made under the HSR Act; and (iii) take
\npromptly, in the event that any permanent or preliminary injunction or other
\norder is entered or becomes reasonably foreseeable to be entered in any
\nproceeding that would make consummation of the transactions contemplated by this
\nAgreement and the Ancillary Agreements in accordance with the terms thereof
\nunlawful or that would prevent or delay consummation of any such transactions,
\nany and all steps (including the appeal thereof and the posting of a bond)
\nnecessary to vacate, modify or suspend such injunction or order so as to permit
\nsuch consummation on a schedule as close as possible to that contemplated by
\nthis Agreement.<\/p>\n
56<\/p>\n
Section 6.5 Further Assurances.<\/p>\n
(a) Subject to Section 6.5(b), on and after the Closing Date, TRW and
\nBuyer shall cooperate and use their respective reasonable best efforts to take
\nor cause to be taken all appropriate actions and do, or cause to be done, all
\nthings necessary or appropriate to consummate and make effective the
\ntransactions contemplated hereby, including the execution of any additional
\ndocuments or instruments of any kind, the obtaining of consents which may be
\nreasonably necessary or appropriate to carry out any of the provisions hereof
\nand the taking of all such other actions as such party may reasonably be
\nrequested to take by the other party hereto from time to time, consistent with
\nthe terms of this Agreement and the Ancillary Agreements, in order to effectuate
\nthe provisions and purposes of this Agreement and the Ancillary Agreements and
\nthe transactions contemplated hereby and thereby.<\/p>\n
(b) Notwithstanding subsection (a), nothing in this Agreement shall be
\ndeemed to require the conveyance, assignment or transfer of any Asset that by
\nits terms or by operation of applicable law cannot be freely conveyed, assigned,
\ntransferred or assumed. To the extent a party hereto has been unable to obtain
\nany governmental or any third party consents or approvals required under
\napplicable law for the transfer of any Asset and to the extent not otherwise
\nprohibited by the terms of any Asset, TRW and its Affiliates shall continue to
\nbe bound by the terms of such applicable Asset and Buyer shall pay, perform and
\ndischarge fully all of the obligations of TRW and its Affiliates thereunder from
\nand after the Closing to the extent that the corresponding benefit is received.
\nTRW shall, without consideration therefor, pay, assign and remit to Buyer
\npromptly all monies, rights and other consideration received in respect of such
\nperformance. To the extent permitted by law, TRW and its Affiliates shall
\nexercise or exploit their rights in respect of such Assets only as reasonably
\ndirected by Buyer and at Buyer’s expense. Each party hereto shall continue to
\nuse reasonable best efforts to obtain all such unobtained consents or approvals
\nrequired to be obtained by it at the earliest practicable date; provided that
\nneither TRW, Buyer nor any of their Affiliates or Subsidiaries shall be required
\nto pay any consideration, other than a de minimus amount, in connection with
\nsuch consents or approvals. If and when any such consents or approvals shall be
\nobtained, then TRW and its Affiliates shall promptly assign their rights and
\nobligations thereunder to Buyer without payment of consideration and Buyer
\nshall, without the payment of any consideration therefor, assume such rights and
\nobligations. Each party shall execute such good and sufficient instruments as
\nmay be necessary to evidence such assignment and assumption.<\/p>\n
Section 6.6 Property Transfer Taxes; Other Expenses; Bulk Transfer
\nLaws.<\/p>\n
(a) The payment of fees, charges, Taxes or other payments (including,
\nany notary and registration fees) required to be made by TRW or Buyer to any Tax
\nAuthority or other Person in connection with the transfer of the Assets,
\nincluding by way of license, pursuant to the terms of the Agreement shall be
\ntreated as follows:<\/p>\n
57<\/p>\n
(i) Buyer and TRW shall each pay or cause to be paid, and
\n shall indemnify, defend and hold harmless the other for, one half of any
\n and all real property, transfer, personal property, sales and use, value
\n added, stamp taxes, documentary taxes and similar Taxes (including any
\n Taxes imposed by way of withholding) and notary fees (“Transfer Taxes”)
\n attributable to the transactions contemplated by this Agreement;
\n provided, however, that TRW shall pay or cause to be paid and indemnify,
\n defend and hold harmless Buyer against any and all Restructuring Taxes
\n and any and all UK stamp duties and stamp Taxes that relate to the
\n transactions described in Schedule 2.1;<\/p>\n
(ii) TRW, on the one hand, and Buyer, on the other hand, shall
\n each pay or cause to be paid, and shall indemnify, defend and hold
\n harmless the other for, their own expenses in connection with the
\n filings and other actions necessary for compliance with the HSR Act and
\n other any regulatory filings (provided, however, that Buyer shall pay
\n all governmental fees and charges imposed with respect to such
\n regulatory filings);<\/p>\n
(iii) each of TRW and Buyer shall pay or cause to be paid, and
\n shall indemnify and hold harmless the other party for, any such other
\n fees, charges or the other payments for which such party is legally
\n responsible under applicable law and which are not covered by clauses
\n (i) and (ii); and<\/p>\n
(iv) TRW and Buyer shall cooperate and work together as the
\n parties may mutually agree in the future to reduce or to obtain
\n exemption where available from sales and use, value added, goods and
\n services taxes and any other Transfer Tax. In addition, TRW and Buyer
\n agree that the transfer of the Acquired Assets in each country
\n constitutes the transfer of a going concern in each country for purposes
\n of obtaining exemption as such from any sales and use, value added,
\n goods and services taxes and other Transfer Taxes.<\/p>\n
(b) Each of TRW and Buyer will be responsible for the preparation and
\nfiling of any Tax Return with respect to any Transfer Taxes for which such party
\nis legally responsible under applicable law. The non-filing party shall pay the
\nother the amount of any Transfer Taxes shown due on any Tax Return relating to
\nTransfer Taxes for which such party is liable under Section 6.6(a)(i) of this
\nAgreement within three (3) Business Days of demand by the filing party.<\/p>\n
Section 6.7 Publicity. Except as otherwise required by law or court
\nprocess or by any listing agreement with a national securities exchange or
\ntrading market, until the Closing, or the date the Agreement is terminated
\npursuant to Article VIII, TRW and Buyer shall not, and each of them shall cause
\ntheir respective officers, directors, partners, Affiliates, representatives and
\nagents not to, disclose or cause the disclosure of information, or issue or
\ncause the publication of the initial press release or public <\/p>\n
58<\/p>\n
announcement, with respect to the transactions contemplated by this Agreement or
\nany Ancillary Agreement, without the prior review and approval thereof by the
\nother party hereto, such approval not to be unreasonably withheld. All
\nsubsequent press releases or public announcements by any party hereto with
\nrespect to the transactions contemplated by this Agreement or any Ancillary
\nAgreement require consultation, to the extent practicable, with the other party
\nhereto. Nothing in this Section 6.7 shall restrict TRW from disclosing
\ninformation with respect to the transactions contemplated by this Agreement or
\nany Ancillary Agreement to a third party who may engage in a business
\ncombination transaction resulting in the acquisition (by purchase or otherwise)
\nof all or substantially all of the capital stock or assets of TRW; provided that
\nsuch third party is subject to a customary confidentiality agreement.<\/p>\n
Section 6.8 Employees and Employee Benefit Plans.<\/p>\n
(a) General. For purposes hereof, (i) “Affected Employees” shall mean
\nthose current employees of the Business (including those employees who are on
\nvacation, approved leave of absence, lay-off status or short-term disability and
\nexcluding those on long-term disability) as of the Closing Date; (ii)
\n“Regulations” shall mean Section 18A of the Employment Act Cap. 91 of Singapore,
\nthe Transfer of Undertakings (Protection of Employment) Regulations 1981, as
\namended, or Section L122-12, paragraph 2 of the French Labor Code, as amended,
\nor Section 613a of the Civil Code of Germany, as amended; and (iii) “Aerospace
\nEmployee” shall mean any Affected Employee employed by the Aerospace
\nSubsidiaries or by the Aerospace Affiliates as of the Closing Date, but
\nspecifically excluding the UK-based Affected Employees (“UK Affected
\nEmployees”).<\/p>\n
(b) Transferred Employees. The parties hereto intend that there will
\nbe a continuity of employment for all Affected Employees following the Closing
\nDate, except for the persons identified on Schedule 6.8(b) hereof as expressly
\nexcluded and persons on extended leaves of absence as specifically referred to
\nherein. In order to effectuate such transfer of employment as of the Closing
\nDate, except as otherwise provided herein, Buyer shall make a general offer of
\nemployment on terms no less favorable than the employees’ current conditions of
\nemployment in the aggregate, provided that, unless required by applicable law or
\notherwise provided for herein, Buyer shall not be obligated to continue such
\nterms beyond the Closing Date, through a general notice of transfer (pursuant to
\nmethodologies mutually agreed upon by TRW and Buyer) to each Affected Employee
\nwho is not an Aerospace Employee or a U.K. Affected Employee, and who will not
\nbecome an employee of Buyer by operation of the Regulations and who is not
\nidentified on Schedule 6.8(b) (each an “Offer Employee”). Such general offer of
\nemployment will be deemed accepted by each Offer Employee unless (A) expressly
\nrejected by the Offer Employee prior to the Closing Date or (B) if the Offer
\nEmployee otherwise indicates by his or her actions that such offer of employment
\nhas not been accepted and Buyer notifies TRW within 30 days following the
\nClosing Date of such non-acceptance of the offer (each Offer Employee who acts
\nunder (A) or (B), a “Non-Acceptance Offer Employee”). For purposes of this
\nAgreement, “Transferred Employee” shall mean (i) each Offer Employee other than
\na Non-Acceptance Offer Employee; provided that, in the case of Offer Employees
\non short term<\/p>\n
59<\/p>\n
disability or other approved leaves of absence, such employees must commence
\nservice with Buyer prior to the six-month anniversary of the Closing Date to
\nbecome Transferred Employees; (ii) each Affected Employee whose employment
\ntransfers to Buyer pursuant to operation of Regulations and (iii) each Affected
\nEmployee who is a UK Affected Employee or an Aerospace Employee. Any Affected
\nEmployee who does not commence employment with Buyer as described above shall
\nnot be treated as a Transferred Employee. Except as otherwise provided in this
\nSection 6.8, all Transferred Employees will cease to accrue benefits under and
\nparticipate as active participants in all Plans (that are not Assumed Plans) as
\nof the Closing Date. The parties will cooperate to comply with legal and
\nregulatory requirements to accomplish the employment transfers described in this
\nSection 6.8, including without limitation any requirements for TRW to terminate
\nthe employment of any Affected Employee and for Buyer to make a specific
\nemployment offer to such Affected Employees, and TRW will transfer (at TRW’s
\ncost and expense) any work permits or passes applicable to the Affected
\nEmployees who receive offers to become Transferred Employees. No later than 30
\ndays after the date of this Agreement, TRW shall provide Buyer with respect to
\neach Affected Employee (i) years of service; (ii) job title; (iii) base salary
\nor current wages; (iv) date of hire; (v) employment status; and (vi) work
\nlocation. TRW shall update the information required to be provided by the
\npreceding sentence and shall deliver such updated information to Buyer no later
\nthan 15 days prior to the Closing Date.<\/p>\n
(c) Pre-Closing Welfare Benefits. Notwithstanding anything in this
\nAgreement to the contrary, TRW and the Asset Selling Subsidiaries shall be
\nsolely responsible for (A) claims for the type of benefits described in Section
\n3(1) of ERISA (whether or not covered by ERISA) (“Welfare Benefits”) that are
\nincurred by or with respect to any Affected Employee (other than an Aerospace
\nEmployee) and his or her beneficiaries or dependents on or before the Closing
\nDate and (B) claims relating to COBRA continuation coverage attributable to
\n“qualifying events” with respect to any Affected Employee (other than an
\nAerospace Employee) and his or her beneficiaries and dependents that occur on or
\nbefore the Closing Date. For purposes of the foregoing, a medical\/dental claim
\nshall be considered incurred when the services are rendered, the supplies are
\nprovided or medications are prescribed, and not when the condition arose;
\nprovided that claims relating to a hospital confinement that begins on or before
\nthe Closing Date but continues thereafter shall be treated as incurred on or
\nbefore the Closing Date. A disability claim shall be considered incurred on or
\nbefore the Closing Date if the injury or illness resulting in such disability
\noccurs on or prior to the Closing Date.<\/p>\n
(d) US Transferred Employees. The provisions of this Section 6.8(d)
\napply only to US-based Transferred Employees (“US Transferred Employees”).<\/p>\n
(i) Workers’ Compensation. TRW will bear the entire cost and
\n expense of all workers’ compensation claims arising out of injuries
\n identifiably sustained by US Transferred Employees on or before the
\n Closing. Buyer will bear the entire cost and expense of all workers’
\n compensation claims arising out of injuries identifiably sustained by US
\n Transferred Employees after the Closing. TRW will bear the entire cost
\n and expense of all workers’ compensation claims arising out of injuries<\/p>\n
60<\/p>\n
without an identifiable date of occurrence and which are alleged to have
\n arisen either before or before and after the Closing which are filed
\n within sixty (60) calendar days after the Closing Date. Buyer shall bear
\n the entire cost and expense of all workers’ compensation claims arising
\n out of injuries sustained by US Transferred Employees without an
\n identifiable date of occurrence and which are alleged to have arisen
\n either before or before and after the Closing which are filed more than
\n sixty (60) calendar days after the Closing Date. From and after the
\n Closing, Buyer will use its reasonable efforts to facilitate the return
\n to work of any Transferred Employees who were on disability leave on the
\n Closing Date as a result of a work-related injury or illness.<\/p>\n
(ii) Non-Represented Employees. The following provisions of
\n this Section 6.8(d)(ii) shall apply only to US Transferred Employees
\n whose terms of employment are not governed by a collective bargaining
\n agreement (“Non-Represented Employees”).<\/p>\n
(A) Buyer is not assuming, and will not have liability
\n for the continuation of, or any liability for claims under, any
\n Plan (other than the Assumed Plans and, to the extent of
\n liabilities assumed in connection with the receipt of assets as
\n provided in this Section 6.8, the Business Plans) applicable to
\n Non-Represented Employees, and Buyer will not be deemed a
\n successor employer to TRW and any Asset Selling Subsidiary with
\n respect to any such Plan. No Plan adopted or maintained by Buyer
\n with respect to the Non-Represented Employees will be deemed a
\n successor plan of any plan maintained or adopted by TRW or an
\n Asset Selling Subsidiary.<\/p>\n
(B) No assets held in trust for any Plan (other than the
\n TRW Salaried Pension Plan ) applicable to the Non-Represented
\n Employees, specifically including but not limited to, , the
\n Lucas Retirement Account Plan and the TRW Employee Stock
\n Ownership and Savings Plan (“Stock Savings Plan”), will be
\n transferred to Buyer or to any Plan adopted or maintained by
\n Buyer.<\/p>\n
(C) From the Closing Date until the first anniversary
\n thereof, Buyer will provide all Non-Represented Employees with
\n benefits (including, if so determined by Buyer, defined benefit
\n pension plans and defined contribution pension plans) that are
\n comparable in the aggregate to those maintained by TRW for the
\n Non-Represented Employees prior to the Closing; provided,
\n however, without limiting the generality of the foregoing, Buyer
\n shall not be required to provide equity-based compensation or
\n post-retirement medical, dental or other post-retirement welfare
\n benefits to any person. Buyer will waive any<\/p>\n
61<\/p>\n
pre-existing condition exclusions otherwise applicable to the
\n Non-Represented Employees under any benefit plan of Buyer
\n providing medical, dental and vision benefits in which such
\n Non-Represented Employee becomes eligible to participate
\n (“Medical Plans”), and will credit all payments made by each
\n Non-Represented Employee against annual deductibles and
\n out-of-pocket maximums under Medical Plans prior to the Closing
\n Date to the annual deductibles and out-of-pocket maximums under
\n the Buyer’s Medical Plans. Buyer will give each Non-Represented
\n Employee credit for such employee’s service with TRW or any
\n Asset Selling Subsidiary prior to the Closing Date (to the
\n extent recognized by TRW or the Asset Selling Subsidiaries, as
\n applicable, under their respective plans) only for purposes of
\n any participation requirement and for vesting (but not for
\n benefit accrual purposes, or to the extent such treatment would
\n result in a duplication of benefits or a duplicative accrual on
\n or after the Closing Date of benefits for the same period of
\n service, or to the extent such service is prior to a specific
\n date before which service would not have been credited for
\n employees of Buyer) under any defined benefit pension plan and
\n defined contribution savings plan of Buyer in which such
\n Non-Represented Employee becomes eligible to participate. Except
\n as otherwise provided herein, TRW and Buyer reserve the right to
\n establish, eliminate or change any employee benefit plans in the
\n future when and as they deem appropriate.<\/p>\n
(D) TRW will provide Non-Represented Employees who,
\n prior to the Closing, have met the requirements for retiree
\n medical under TRW’s retiree medical plan with benefit coverage
\n under the TRW Retiree Select Medical Plan upon their retirement
\n from Buyer and will provide retired employees of the Business
\n immediately prior to the Closing with retiree medical plan
\n benefit coverage under TRW’s Retire Select Medical Plan if such
\n employees have met the requirements for such coverage.<\/p>\n
(iii) Represented Employees. The following provisions of this
\n Section 6.8(d)(iii) shall apply only to Transferred Employees whose
\n terms of employment are governed by a collective bargaining agreement
\n listed on Schedule 6.8(d)(iii) (“Represented Employees”).<\/p>\n
(A) Buyer shall assume the collective bargaining
\n agreements applicable to the Represented Employees as of the
\n Closing and shall continue all terms and conditions of
\n employment under such assumed collective bargaining agreements
\n through the expiration or other termination of such agreements
\n in conformity with labor laws and regulations of the applicable
\n country. Buyer and TRW shall take all steps necessary under
\n ERISA Section 4204 so that the transaction contemplated by this
\n Agreement will not<\/p>\n
62<\/p>\n
constitute a partial or complete withdrawal under section 4201
\n of ERISA, other than the posting of any bond, escrow or other
\n security. If Buyer withdraws in a complete or partial withdrawal
\n with respect to the Business during the five-year period
\n following the Closing, TRW will be secondarily liable for any
\n withdrawal liability it would have had if it had withdrawn as of
\n the Closing Date, to the extent Buyer fails to satisfy such
\n liability upon Buyer’s complete or partial withdrawal.<\/p>\n
(B) Certain of the Aerospace Subsidiaries and Aerospace
\n Affiliates maintain defined benefit plans (the “Hourly Defined
\n Benefit Plans”) for the benefit of their Affected Employees
\n covered by collective bargaining agreements, all of the assets
\n for which are held in the TRW Master Trust (the “Master Trust”).
\n At the Closing, Buyer shall assume all of the relevant TRW
\n Subsidiary’s obligations and liabilities, and acquire all of the
\n relevant TRW Subsidiary’s right, title and interests in, to and
\n under the Hourly Defined Benefit Plans by adopting, effective as
\n of the Closing Date, the Hourly Defined Benefit Plans; provided
\n that TRW will continue to be responsible for the payment of
\n benefits from the Hourly Defined Benefit Plans until the
\n transfer described in this Section 6.8(d)(ii)(B) is made.
\n Participation in the Hourly Defined Benefit Plans, as adopted by
\n Buyer, by the Transferred Employees participating thereunder
\n shall not be deemed terminated, nor shall their employment be
\n deemed otherwise interrupted for purposes of the Hourly Defined
\n Benefit Plans, as adopted by Buyer, by reason of the
\n transactions contemplated under this Agreement and
\n notwithstanding anything in the Agreements to the contrary, the
\n Transferred Employees shall maintain their service credit under
\n the Hourly Defined Benefit Plan for benefit accrual purposes.
\n Buyer shall, prior to or at the Closing, complete all actions as
\n shall be necessary or desirable to evidence its sponsorship of
\n the Hourly Defined Benefit Plans and the assumption of the
\n ongoing administration and management of such Plans, including
\n establishing or designating one or more successor trusts for the
\n maintenance of the Hourly Defined Benefit Plans’ assets. As soon
\n as administratively possible after receipt by TRW of evidence
\n that Buyer has taken the actions required by this Section
\n 6.8(d)(iii)(B), TRW shall cause cash (or property in kind, if
\n reasonably requested by Buyer and approved by TRW, which
\n approval shall not be unreasonably withheld) equal to the fair
\n market value, as of the date immediately preceding the date of
\n transfer, of the assets attributable to the Hourly Defined
\n Benefit Plans held by the TRW master trustee to be transferred
\n to the successor trust or trusts established by Buyer.<\/p>\n
63<\/p>\n
(C) Certain of the Aerospace Subsidiaries in the
\n United States maintain the retiree medical plans set
\n forth on Schedule 6.8(d)(iii)(C) (the “Hourly Retiree I
\n Medical Plans”), providing medical benefits to retirees
\n and their eligible beneficiaries. At the Closing, Buyer
\n shall assume all of TRW’s obligations and liabilities
\n under the Hourly Retiree Medical Plans with respect to
\n Non-Represented Employees. TRW will provide retired
\n employees of the Business immediately prior to the
\n Closing with retiree medical plan benefit coverage under
\n the Hourly Retiree Medical Plans if such former
\n employees meet the requirements for coverage.<\/p>\n
(D) Lucas Western Inc. sponsors and maintains
\n the Lucas Western Inc. 401(k) Plan for the benefit of
\n the Represented Employees at its Diamond Bar, California
\n facility (the “Union 401(k) Plan”). Buyer shall assume
\n all of Lucas Western Inc.’s obligations and liabilities,
\n and acquire all of Lucas Western Inc.’s right, title and
\n interest in, to and under the Union 401(k) Plan and
\n Lucas Western Inc. shall transfer to Buyer on the
\n Closing Date all of the assets held with respect to the
\n Union 401(k) Plan.<\/p>\n
(e) UK Transferred Employees. The provisions of this
\n Section 6.8(e) apply only to Transferred Employees employed by
\n TRW Limited or any of its Subsidiaries (“UK Transferred
\n Employees”). TRW and Buyer acknowledge that the transaction
\n contemplated by this Agreement constitutes a relevant transfer
\n under the Regulations.<\/p>\n
(i) Buyer will continue, and will cause any
\n Subsidiary of Buyer to which the contract of employment
\n of any UK Transferred Employee is transferred by
\n operation of the Regulations to continue all terms and
\n conditions of employment defined in individual contracts
\n and in collective bargaining agreements applicable to UK
\n Transferred Employees as of the Closing through the
\n respective expiration or other termination of such
\n agreements to the extent required by Regulations,
\n subject to any ability to modify such terms or
\n conditions as set forth in the applicable contract or
\n agreement. Schedule 6.8(e) contains each form of
\n individual contract entered into with UK Transferred
\n Employees and lists each collective bargaining agreement
\n applicable to UK Affected Employees.<\/p>\n
(ii) TRW shall transfer assets and liabilities
\n from the TRW UK Pension Scheme in accordance with the
\n terms and conditions of Schedule 6.8(e)(ii).<\/p>\n
(iii) TRW will bear the entire cost and expense
\n of all employers’ liability claims arising out of
\n injuries sustained (or to the extent sustained) by UK
\n Transferred Employees on or before the Closing. Buyer
\n will bear the entire cost and expense of all employers’
\n liability<\/p>\n
64<\/p>\n
claims arising out of injuries sustained (or to the
\n extent sustained) by UK Transferred Employees after the
\n Closing.<\/p>\n
(f) Canadian Affected Employees. The provisions of
\n this Section 6.8(f) apply only to Canadian based Transferred
\n Employees of TRW or any Asset Selling Subsidiary, (“Canadian
\n Transferred Employees”)<\/p>\n
(i) As of the Closing, TRW and the
\n applicable Asset Selling Subsidiary (TRW Aeronautical
\n Systems Canada Limited) hereby assign to Buyer and Buyer
\n hereby assumes the employment contracts, and collective
\n bargaining agreement of TRW, any of its Subsidiaries or
\n the relevant Canadian Asset Selling Subsidiary with
\n respect to Canadian Transferred Employees. TRW shall
\n provide Buyer with each form of contract with Canadian
\n Transferred Employees no later than thirty Business Days
\n after the Closing and a statement of the number of
\n employees subject to such form agreements.<\/p>\n
(ii) Salaried Pension Plan<\/p>\n
(A) The Buyer shall, effective as of
\n and from the Closing Date, designate a
\n registered pension plan to provide pension
\n benefits to Canadian salaried Affected Employees
\n from and after the Closing Date (the “Buyer’s
\n Canadian Salaried Pension Plan”).<\/p>\n
(B) Effective as of the Closing Date,
\n each Canadian salaried Affected Employee who is
\n a member of the TRW Canada Limited Salaried
\n Pension Plan (the “TRW Canadian Salaried Pension
\n Plan”) shall cease to actively participate in
\n and accrue benefits under the TRW Canadian
\n Salaried Pension Plan and shall commence
\n participation in and accrue benefits under the
\n Buyer’s Canadian Salaried Pension Plan. The
\n Buyer shall enroll each Canadian salaried
\n Affected Employee in the Buyer’s Canadian
\n Salaried Pension Plan effective as at the
\n Closing Date. The Buyer’s Canadian Salaried
\n Pension Plan shall recognize each Canadian
\n salaried Affected Employee’s period of service
\n prior to the Closing Date (as recognized under
\n the TRW Canadian Salaried Pension Plan) for the
\n purposes of vesting of and eligibility for
\n benefits under the Buyer’s Canadian Salaried
\n Pension Plan.<\/p>\n
(C) All benefits accrued by a
\n Canadian salaried Transferred Employee under the
\n TRW Canadian Salaried Pension Plan up to the
\n Closing Date shall be transferred from the TRW
\n Canadian Salaried Pension Plan to the Buyer’s
\n Canadian Salaried Pension Plan, subject to and
\n upon the completion of, the transfer of assets
\n from the TRW Canadian Salaried Pension Plan to
\n the<\/p>\n
65<\/p>\n
Buyer’s Canadian Salaried Pension Plan as
\n contemplated by this Section 6.8(f)(ii).<\/p>\n
(D) Upon the completion of the
\n transfer of assets from the TRW Canadian
\n Salaried Pension Plan to the Buyer’s Canadian
\n Salaried Pension Plan, the Buyer’s Canadian
\n Salaried Pension Plan shall, for each Canadian
\n salaried Affected Employee, recognize such
\n period of service (as recognized under the TRW
\n Canadian Salaried Pension Plan) for all purposes
\n relating to the determination of such Canadian
\n salaried Affected Employee’s benefits under the
\n Buyer’s Canadian Salaried Pension Plan.<\/p>\n
(E) As soon as practicable after the
\n Closing Date, TRW shall update the pension
\n records of each Canadian salaried Affected
\n Employee in relation to the TRW Canadian
\n Salaried Pension Plan up to the Closing Date,
\n and shall provide to TRW’s actuary such data,
\n records and other information as is necessary to
\n enable TRW’s actuary to determine the amount of
\n the Canadian Salaried Affected Employee
\n Liabilities for the TRW Canadian Salaried
\n Pension Plan. As soon as practicable after such
\n information has been provided to TRW’s actuary,
\n TRW shall instruct its actuary to determine the
\n amount of the Canadian Salaried Affected
\n Employee Liabilities for the TRW Canadian
\n Salaried Pension Plan. TRW shall make the
\n details of these calculations and their results
\n available to the Buyer and its actuary for their
\n review and confirmation, and shall furnish to
\n them such data and other information as may be
\n required or requested to permit a review,
\n recalculation and confirmation of the Canadian
\n Salaried Affected Employee Liabilities by the
\n Buyer and its actuary. The Buyer shall within
\n thirty (30) days of receiving such information
\n and data (or such later date as the parties may
\n agree to) notify TRW as to its agreement or
\n disagreement with TRW’s calculation of the
\n Canadian Salaried Affected Employee Liabilities.
\n For purposes of this Section 6.8(f)(ii)(E),
\n “Canadian Salaried Affected Employee
\n Liabilities” means the greatest of the going
\n concern liabilities, the solvency liabilities
\n and the projected benefit obligation for the
\n benefits accrued by the Canadian salaried
\n Affected Employees under the TRW Canadian
\n Salaried Pension Plan. For these purposes, the
\n ongoing liabilities shall be calculated as of
\n the Closing Date using the actuarial methods and
\n assumptions set out in the most recent actuarial
\n report filed with the regulators in respect of
\n plan, the solvency liabilities shall be
\n calculated as of the Closing using the actuarial
\n methods and assumptions which would have as of
\n December 31, 2001 or January 1, 2002 (whichever
\n is plan’s traditional measurement date) had an
\n actuarial report prepared as of that date for
\n filing with the regulators in of such plan, and
\n projected benefit obligation shall be calculated
\n as of <\/p>\n
66<\/p>\n
the Closing Date using the same actuarial
\n methods and assumptions as used by TRW to
\n calculate the projected benefit obligations as
\n of January 1, 2002 as documented on page 5 of
\n the Towers Report.<\/p>\n
(F) If the Buyer and TRW cannot reach
\n agreement with respect to calculations under
\n this Section 6.8(f)(ii), any such disputes shall
\n be referred to and settled with final and
\n binding effect by an independent actuary
\n mutually agreeable to the Buyer and TRW. The
\n costs, fees and expenses which are associated
\n with any such appointment shall be borne equally
\n by TRW and the Buyer.<\/p>\n
(G) As soon as practicable, but in any
\n event within thirty (30) days after final
\n agreement is reached between TRW and the Buyer
\n with respect to the amount of the Canadian
\n Salaried Affected Employee Liabilities in
\n relation to the TRW Canadian Salaried Pension
\n Plan, TRW shall instruct its actuary to make
\n application to the applicable governmental
\n authorities for approval of the transfer of
\n assets equal to the Transfer Amount from the TRW
\n Canadian Salaried Pension Plan to the Buyer’s
\n Canadian Pension Plan. For purposes of this
\n Section 6.8(f)(ii)(G), “Transfer Amount” means,
\n in relation to the TRW Canadian Salaried Pension
\n Plan, the amount of assets of the TRW Canadian
\n Salaried Pension Plan to be transferred to the
\n Buyer’s Canadian Salaried Pension Plan,
\n determined as at the Closing Date to be equal to
\n the Canadian Salaried Affected Employee
\n Liabilities. Written confirmation of any and all
\n approvals of applicable governmental authorities
\n shall be forwarded by TRW to the Buyer within
\n five (5) business days of receipt of such
\n approvals.<\/p>\n
(H) If any governmental authority or
\n court refuses to permit a transfer of assets
\n from the TRW Canadian Salaried Pension Plan to
\n the Buyer’s Canadian Salaried Pension Plan in an
\n amount equal to the Transfer Amount, the
\n transfer shall be made from the TRW Canadian
\n Salaried Pension Plan in the amount that such
\n governmental authority or court advises would be
\n acceptable to it. The asset transfer amount
\n approved by the governmental authority or court,
\n whether equal to the Transfer Amount or some
\n other amount, shall be referred to as the
\n “Regulatory Amount”. TRW shall provide Buyer all
\n information relevant to calculate the Regulatory
\n Amount. In the event that the Regulatory Amount
\n is greater than the Transfer Amount, the Buyer
\n shall not be required to pay any amount to TRW
\n or any other person in respect of such excess.<\/p>\n
67<\/p>\n
(I) From the Closing Date to the
\n Transfer Date, TRW shall cause the funding agent
\n for the TRW Canadian Salaried Pension Plan to
\n accept and record, as required, all benefit
\n payments relating to Canadian salaried Affected
\n Employees under the TRW Canadian Salaried
\n Pension Plan and shall remain responsible for
\n all benefit calculations, communications and the
\n completion of all forms and reports under the
\n TRW Canadian Salaried Pension Plan relating to
\n the Canadian salaried Affected Employees. All
\n benefit payments payable between the Closing
\n Date and the Transfer Date to Canadian salaried
\n Affected Employees under the terms of the TRW
\n Canadian Salaried Pension Plan shall be payable
\n out of such plan. For purposes of this Section
\n 6.8(f)(ii), “Transfer Date” means the date
\n assets are actually transferred from the TRW
\n Canadian Salaried Pension Plan to the Buyer’s
\n Canadian Salaried Pension Plan.<\/p>\n
(J) Within thirty (30) days of receipt
\n of all required approvals from the governmental
\n authorities in relation to the TRW Canadian
\n Salaried Pension Plan, TRW shall calculate the
\n Final Transfer Amount and shall advise the Buyer
\n of such Final Transfer Amount. For purposes of
\n this Section 6.8(f)(ii), the term “Final
\n Transfer Amount” shall mean, in relation to the
\n TRW Canadian Salaried Pension Plan, the
\n Regulatory Amount adjusted for (i) a
\n proportionate share of the fund rate of return
\n (positive or negative) earned by the TRW
\n Canadian Salaried Pension Plan from the Closing
\n Date to the Transfer Date, (ii) any data
\n corrections identified subsequent to the
\n determination of the Canadian Salaried Affected
\n Employee Liabilities, (iii) any benefit payments
\n paid pursuant to Section 6.8(f)(ii), and (iv)
\n all fees and expenses relating to the Canadian
\n Salaried Affected Employee Liabilities between
\n the Closing Date and the Transfer Date. TRW
\n shall make the details of these calculations and
\n their results available to the Buyer and its
\n actuary for their review and confirmation, and
\n shall furnish to them such other information and
\n data as may reasonably be required or requested
\n to permit a review, recalculation and
\n confirmation of the Final Transfer Amount by the
\n Buyer and its actuary. The Buyer shall notify
\n TRW within thirty (30) days of receiving such
\n information and data as to its agreement or
\n disagreement with TRW’s calculation of the Final
\n Transfer Amount.<\/p>\n
(K) Within thirty (30) days of TRW and
\n the Buyer reaching agreement on a Final Transfer
\n Amount, TRW shall cause an amount of cash,
\n assets in kind or a combination thereof, as
\n determined by TRW and the Buyer, equal to the
\n Final Transfer Amount, to be transferred from
\n the TRW Canadian Salaried Pension Plan to the
\n Buyer’s Canadian Salaried Pension Plan.<\/p>\n
68<\/p>\n
(iii) Hourly Pension Plan<\/p>\n
(A) Effective as of the Closing Date, TRW
\n shall cause TRW Canada to assign and transfer to Buyer or its
\n subsidiary or affiliate, as applicable, its rights, obligations
\n and liabilities with respect to the Retirement Pension Plan for
\n Hourly-Paid Employees of Lucas Industries Canada Limited (the
\n “Canadian Hourly Pension Plan”) and its related funding medium
\n (the “Canadian Hourly Fund”). Effective as of the Closing Date,
\n the Buyer or its subsidiary or affiliate, as applicable, shall
\n accept such assignment and transfer, provided that any required
\n approvals of the employee association or bargaining agent are
\n obtained. TRW shall cause TRW Canada to cause to be filed with
\n the applicable federal and provincial regulatory authorities, as
\n soon as possible after the Closing Date, such documentation as
\n may be required with respect to the assumption of sponsorship of
\n the Canadian Hourly Pension Plan and the Canadian Hourly Fund as
\n provided for hereunder. The Buyer agrees to do all things
\n required of it under applicable laws to establish that it or its
\n affiliate or subsidiary, as applicable, is the successor sponsor
\n under the terms of the Canadian Hourly Pension Plan and the
\n Canadian Hourly Fund as provided hereunder.<\/p>\n
(B) TRW shall cause TRW Canada to be
\n responsible for satisfying any and all governmental reporting
\n and\/or disclosure requirements applicable to the Canadian Hourly
\n Pension Plan and the Canadian Hourly Fund with respect to plan
\n years ending prior to the Closing Date and the Buyer shall be
\n responsible for satisfying any and all governmental reporting
\n and\/or disclosure requirements with respect to plan years ending
\n on or after the Closing Date. TRW shall cause TRW Canada to
\n co-operate with the Buyer with respect to such reporting
\n requirements for the plan year in which the Closing occurs.
\n Prior to and following the Closing Date, TRW shall cause TRW
\n Canada to provide the Buyer with such books, records and other
\n relevant data within its control or access relating to the
\n Canadian Hourly Pension Plan and the Canadian Hourly Fund as the
\n Buyer shall reasonably request.<\/p>\n
(C) The parties acknowledge that TRW Canada
\n and the Canadian Hourly Fund participate in the TRW Canada
\n Master Trust. The parties shall co-operate with each other to
\n effect the removal of the Canadian Hourly Fund and its assets
\n (in cash or in kind, as agreed to by the parties) from the TRW
\n Canada Master Trust. Without limiting the generality of the
\n foregoing, the removal shall occur on a fair market value basis,
\n determined as of the date immediately preceding the date of
\n removal.<\/p>\n
69<\/p>\n
(iv) TRW Aeronautical Systems Canada Ltd. maintains a retiree
\n medical plan (the “Canadian Retiree Medical Plan”), providing medical
\n and life insurance benefits to retirees and their eligible
\n beneficiaries. At the Closing, Buyer shall assume all of TRW
\n Aeronautical Systems Canada Ltd.’s obligations and liabilities under the
\n Canadian Retiree Medical Plan with respect to the Canadian Transferred
\n Employees and TRW shall retain liabilities for all other current or
\n former Canadian employees of the Business and will provide retired
\n employees of the Business with retiree medical plan benefit coverage
\n under Canadian Retiree Medical Plan if such employees has met the
\n requirements for such coverage.<\/p>\n
(g) Subsequent Terminations or Layoffs. Buyer will be solely
\nresponsible for all costs related to the termination or layoff of a Transferred
\nEmployee by it after the Closing Date, including but not limited to severance
\nexpenses, penalties, damages and\/or attorneys’ fees related to Buyer’s failure
\nto comply with the WARN Act or any other applicable law (“Lay-off Payments”).
\nBuyer will give all Transferred Employees full credit for such employee’s
\nservices with TRW or any Subsidiary thereof prior to the Closing Date. TRW shall
\nbe solely responsible for all Lay-off Payments with respect to terminations of
\nemployment of any Affected Employees before or after Closing and arising from
\nany notice of termination given by TRW or any of its subsidiaries of any
\nAffected Employee prior to the Closing Date. TRW shall be solely responsible for
\nall severance payments (and similar payments) to Affected Employees incurred as
\na result of the transactions contemplated by this Agreement which are not caused
\n(i) by Buyer’s failure to offer employment to or accept transfers of employment
\nof Affected Employees consistent with Section 6.8(b) or (ii) by a termination of
\nemployment following the Closing Date. TRW will also be responsible for
\ncomplying with all obligations and liabilities arising under the WARN Act and
\nany comparable state law with respect to any actions taken by TRW prior to or on
\nthe Closing Date.<\/p>\n
(h) Personal Employee Contracts.<\/p>\n
(i) TRW will be solely responsible for all obligations arising
\n under all plans, programs, practices or agreements with respect to
\n Affected Employees, if any, providing financial incentives to such
\n employees relating to their services to TRW during the process of
\n selling the Business.<\/p>\n
(ii) With respect to any expatriate\/inpatriate Transferred
\n Employees, Buyer or a Subsidiary of Buyer will assume as of the Closing
\n the agreements between TRW or any of the Asset Selling Subsidiaries and
\n such Transferred Employees listed on Schedule 6.8(h) through the terms
\n thereof, subject to the ability to modify or amend according to the
\n terms thereof.<\/p>\n
(i) Payroll Obligations. TRW shall pay each Transferred Employee who
\nis a participant in any cash incentive plan of TRW or the Asset Selling
\nSubsidiaries a<\/p>\n
70<\/p>\n
bonus for the plan year in which the Closing Date occurs equal to a pro rated
\nportion of the full bonus amount that would have otherwise been paid for such
\nyear to such Transferred Employee pursuant to the terms of such plans as in
\neffect immediately prior to the Closing Date. Such bonus shall be paid based
\nupon the bonus performance for the full year and shall be pro rated based upon
\nthe number of days the Transferred Employee is employed by TRW or the Asset
\nSelling Subsidiary for the plan year in which the Closing Date occurs, and shall
\nbe paid at the time bonuses for such plan year are paid.<\/p>\n
(j) Vacation. As of the Closing, Buyer will assume all obligations of
\nTRW, the Aerospace Affiliates and the Asset Selling Subsidiaries to Transferred
\nEmployees for any accrued vacation entitlement and vacation pay entitlement
\nsolely to the extent such liability is properly reflected on the Closing Balance
\nSheet. TRW, the Aerospace Affiliates and the Asset Selling Subsidiaries will
\nhave no obligation to make any payment to Transferred Employees after the
\nClosing with respect to any such accrued vacation entitlement and vacation pay
\nentitlement to the extent such liability is properly reflected on the Closing
\nBalance Sheet. Buyer will give the Transferred Employees full credit for their
\nrespective service with TRW and the Asset Selling Subsidiaries prior to the
\nClosing Date for purposes of entitlement and accrual of vacation and vacation
\npay from and after the Closing Date (to the extent Buyer gives credit to its
\nsimilarly situated employees for such purposes).<\/p>\n
(k) Severance. From the Closing Date until the first anniversary
\nthereof, Buyer will provide all Transferred Employees with a severance policy
\ncomparable in the aggregate to that provided by TRW, and the Asset Selling
\nSubsidiaries, respectively, immediately prior to the Closing Date and listed in
\nSchedule 6.8(k) and, for all purposes with respect to such severance policies,
\nwill provide each of the Transferred Employees credit for past service with TRW
\nand its Subsidiaries and Affiliates to the extent such service was credited
\nunder severance plans of TRW, or the Asset Selling Subsidiaries. From the
\nClosing Date until the first anniversary thereof, Buyer will cause the Aerospace
\nSubsidiaries and will use its reasonable best efforts to cause the Aerospace
\nAffiliates to maintain the severance policies in place as of the date of this
\nAgreement with respect to the Affected Employees, or severance policies that are
\ncomparable in the aggregate to such severance policies and for purposes of
\nSection 2.4 such severance obligations are deemed assumed by Buyer.<\/p>\n
(l) Aerospace Subsidiary and Aerospace Affiliate Employees. With
\nrespect to employees of the Aerospace Subsidiaries and Aerospace Affiliates,
\nBuyer shall, or shall cause the Aerospace Subsidiaries and Aerospace Affiliates
\nthat will be controlled by Buyer (and shall use reasonable efforts to cause the
\nAerospace Affiliates not controlled directly or indirectly by Buyer) to, (a)
\nhonor all terms and conditions of employment defined in individual contracts and
\nin applicable collective bargaining agreements through the respective expiration
\nor other termination of such agreements to the extent required by the labor laws
\nand regulations of the applicable country, and (b) assume the
\nexpatriate\/inpatriate agreements between TRW or any of its Subsidiaries or
\nAffiliates, on the one hand, and any Aerospace Employees, on the other hand.<\/p>\n
71<\/p>\n
(m) Transition Services. TRW and the Asset Selling Subsidiaries shall
\nreasonably cooperate with Buyer to implement this Section 6.8, including, but
\nnot limited to, allowing Buyer access to the Affected Employees for interviews
\non a mutually convenient basis prior to the Closing Date, as well as access to
\ntheir personnel records and other related information, as reasonably requested
\nby Buyer. TRW and the Asset Selling Subsidiaries agree to provide to Buyer
\nadministrative payroll and benefits services during a transition period after
\nthe Closing Date on a fully reimbursed basis pursuant to a transition services
\nagreement, the terms of which shall be mutually agreed upon by TRW and Buyer,
\nfor the purpose of providing continuous benefits coverage to the Transferred
\nEmployees.<\/p>\n
(n) Alternate Procedure. TRW and the Asset Selling Subsidiaries agree
\nthat, pursuant to the “Alternate Procedure” (provided in Section 5 of Revenue
\nProcedure 96-60, 1996-2 C.B. 399), with respect to filing and furnishing IRS
\nForms W-2, W-3, W-4, W-5, and 941, (i) TRW and the Asset Selling Subsidiaries,
\nas applicable, shall report on a “predecessor-successor” basis (as set forth
\ntherein), (ii) TRW and the Asset Selling Subsidiaries, as applicable, shall be
\nrelieved from furnishing Forms W-2 to any of the Transferred Employees, and
\n(iii) Buyer shall assume the obligations of TRW and its Affiliates, as
\napplicable, to furnish such Forms W-2 to any such Transferred Employees for the
\nyear in which the Closing occurs; provided that, in each case TRW and the Asset
\nSelling Subsidiaries shall cooperate with Buyer in such transition procedures by
\nsupplying Buyer with all relevant wage, withholding and other relevant
\ninformation in respect of periods prior to the Closing Date on a timely basis.<\/p>\n
(o) Australian Employees. The provisions of this Section 6.8(o) apply
\nonly to Australia-based Transferred Employees of TRW or any Asset Selling
\nSubsidiary, (“Australian Transferred Employees”).<\/p>\n
(i) Any offer of employment to an Australian based Affected
\n Employee shall be conditional on Closing and shall also require the
\n Australian Transferred Employee to resign from employment with TRW or
\n the Asset Selling Subsidiary if the Australian Transferred Employee
\n accepts employment with Buyer. The offer must be in the form as agreed
\n between Buyer and TRW and shall be made by Buyer at least fifteen
\n Business Days prior to the Closing Date. Buyer and TRW shall use
\n reasonable endeavors to ensure that each Australian Transferred Employee
\n accepts the offer.<\/p>\n
(ii) On Closing, TRW shall (A) pay each Australian Transferred
\n Employee his accrued entitlement to annual leave and long service leave,
\n and (B) provide Buyer with documentation concerning all entitlements to
\n which each Australian Transferred Employee is entitled as at the Closing
\n Date, including accrued sick leave, annual leave and long service leave
\n together with evidence of payment of the amounts referred to in clause
\n (A) above.<\/p>\n
72<\/p>\n
(iii) Buyer shall, with respect to all existing benefit plans as
\n listed in Section 4.13 of the TRW Disclosure Letter in which each
\n Australian Transferred Employee is eligible to participate waive all
\n limitations relating to pre-existing conditions, exclusions or waiting
\n periods applicable to the Australian Transferred Employees.<\/p>\n
(iv) From the Closing Date, Buyer shall (A) treat each
\n Australian Transferred Employee as if the Australian Transferred
\n Employee had been continuously employed by Buyer from the time of
\n commencement of employment with TRW or with any predecessor of TRW in
\n any part of the Business, and (B) deal with all entitlements (including
\n bonus payments or incentive schemes) to which each Australian
\n Transferred Employee is entitled as if each entitlement had been accrued
\n by the Australian Transferred Employee while in the employment of Buyer
\n in each case, except to the extent doing so would result in a
\n duplication of benefits for the same period of service; provided, that
\n TRW will reimburse Buyer as soon as practicable following calculation of
\n amounts for any bonus amounts TRW would have otherwise been required to
\n pay the Australian Transferred Employees pursuant to Section 6.8(i) in
\n the absence of this Section 6.8(o)(iv).<\/p>\n
(v) Superannuation.<\/p>\n
(A) For purposes of this Section 6.8(o)(v), the following
\n definitions will apply:<\/p>\n
“Funds” shall mean the Lucas (Australia) Staff Superannuation
\n Fund, a subplan of the Mercer Master Retirement Trust, the Mercer
\n Retirement Fund, and the AMP SuperLeader Fund.<\/p>\n
“SGA” means the Superannuation Guarantee (Administration) Act 1992
\n (Cth).<\/p>\n
“Superannuation” shall mean any fund, scheme, benefit or
\n contribution and shall include any pension, retirement, provident
\n or similar fund, scheme, benefit or contribution.<\/p>\n
“Superannuation Commitment” means every amount: (x) needed to
\n satisfy any actual or contingent liability, including under the
\n governing rules of a superannuation fund, a contract of
\n employment, an industrial instrument such as an award or
\n agreement, or any law for any superannuation contribution; (y)
\n needed to satisfy any moral obligation to pay superannuation
\n contributions or benefits in accordance with the same practices,
\n standards and procedures that applied before the date concerned;
\n or (z) needed so that on the date concerned, the employer is free
\n of actual and contingent liability (making the assumption that the<\/p>\n
73<\/p>\n
superannuation guarantee charge accrues from day to day during
\n each contribution period) for superannuation guarantee charge
\n under the SGA for any contribution period or part period under the
\n SGA up to that date.<\/p>\n
“Tax Act” means the Income Tax Assessment Act 1936 and the Income
\n Tax Assessment Act 1997, jointly, as applicable.<\/p>\n
(B) To the extent permitted by applicable law and by the
\n trustee of the Funds, TRW and Buyer shall each do what is
\n reasonably needed so that with effect from the Closing Date: (x)
\n TRW shall cease to contribute to, and participate in, the Fund as
\n employer in relation to each Australian Transferred Employee who
\n is a member of the Funds; and (y) Buyer shall contribute to, and
\n participate in, the Funds in place of TRW as employer in relation
\n to each Australian Transferred Employee on terms no less favorable
\n to those on which TRW did immediately prior to the date hereof
\n until at least the first anniversary of the Closing Date.<\/p>\n
(C) Prior to and following the Closing, TRW shall give and
\n do all that is reasonably needed on its part to ensure that the
\n trustee of the Funds gives Buyer all records and information
\n reasonably needed, including information concerning each
\n Australian Affected Employee and such Australian Affected
\n Employee’s participation in the Funds, such that Buyer can
\n contribute to and participate in the Funds in respect of each
\n Australian Affected Employee and assume responsibility for
\n superannuation for each Australian Affected Employee.<\/p>\n
(D) TRW shall pay to the Funds on or before Closing the
\n full amount of the TRW’s Superannuation Commitment in respect of
\n every Australian Affected Employee for any period up to the
\n Closing Date.<\/p>\n
(E) TRW shall not, without the prior written consent of
\n Buyer, do anything or omit to do anything that would, either
\n directly or indirectly: (x) alter the method for calculating the
\n benefits payable by the Funds in respect of any Australian
\n Transferred Employee; (y) increase the obligations of TRW as
\n employer of any Australian Transferred Employee in relation to the
\n Funds or contributions to it; or (z) increase from the present
\n Superannuation Commitment of TRW, the Superannuation Commitment of
\n Buyer after Closing for an Australian Transferred Employee or the
\n Australian Affected Employee’s dependents.<\/p>\n
74<\/p>\n
(p) Singapore Transferred Employees. The provisions of this
\n Section 6.8(p) apply only to Singapore-based Transferred Employees of TRW
\n or any Asset Selling Subsidiary, (“Singapore Transferred Employees”).<\/p>\n
(i) With respect to Singapore Transferred Employees who are
\n employed by a TRW or an Asset Selling Subsidiary and are subject
\n to the regulations of the Singapore Employment Act Cap.91 Revised
\n Edition 1996 (the “Employment Act”, and such employees
\n collectively, the “EA Affected Employees”), the parties
\n acknowledge and agree that the EA Affected Employees, and the
\n terms and conditions of their employment, shall be transferred to
\n Buyer in compliance with the Employment Act and that the
\n individual contracts of employment shall have and shall be deemed
\n to have effect after the Closing as if originally made between
\n Buyer and the EA Affected Employees.<\/p>\n
(ii) To the extent required by applicable laws and
\n regulations and subject to any right of an Affected Employee to
\n consent, Buyer shall continue to observe and comply with all terms
\n and conditions of employment defined in individual contracts
\n applicable to the Singapore Transferred Employees as of the
\n Closing through the expiration or other termination of the
\n respective individual contracts in conformity with the applicable
\n labor laws and regulations.<\/p>\n
(q) German Transferred Employees. The provisions of this Section
\n 6.8(q) apply only to Germany-based Transferred Employees of TRW or any
\n Asset Selling Subsidiary, (“German Transferred Employees”). As of the
\n Closing, TRW or the applicable Asset Selling Subsidiary shall assign and
\n Buyer shall assume all employment contracts of Pierburg Luftahrtgerate
\n Union GmbH (“PLU Gmb”) with German Transferred Employees, subject to the
\n right of any individual to consent to the assumption of such contracts,
\n with all rights and claims as well as all obligations and liabilities
\n resulting therefrom, including, without limitation, the pension liability
\n with respect to the German Transferred Employees; provided, however, that
\n this sentence shall not be read as requiring Buyer to assume any Plans
\n other than such individual employment contracts. PLU Gmb and Buyer
\n acknowledge that these employment relationships, with rights and
\n obligations including pension obligations will pass to Buyer pursuant to
\n Section 613a Civil Code of Germany as a result of the purchase of the
\n sold Business. TRW shall provide Buyer with each form of contract with
\n such employees no later than thirty Business Days after the Closing
\n together with a statement of the number of employees subject to such form
\n agreement. Without limiting the forgoing, Buyer will assume all of PLU
\n Gmb’s obligations and liabilities under the pension plan maintained by
\n PLU Gmb (the “German Pension Plan”) for the German Transferred Employees
\n as of the Closing, as referenced in, and pursuant to assumptions
\n consistent with those used for, the Towers Report, but in any event to
\n the extent required by law. As soon as practicable following the Closing,
\n TRW will transfer all of the assets held with respect to the German
\n Pension Plan in respect of the German Transferred Employees’ accrued
\n liabilities to Buyer.<\/p>\n
75<\/p>\n
(r) French Transferred Employees. The provisions of this Section
\n 6.8(r) apply only to France-based Transferred Employees of TRW or any
\n Asset Selling Subsidiary, (“French Transferred Employees”). As of the
\n Closing, TRW or the applicable Asset Selling Subsidiary shall assign and
\n Buyer shall assume all employment contracts of the relevant French Asset
\n Selling Subsidiary with French Transferred Employees, subject to the
\n right of any individual to consent to the assumption of such contracts,
\n with all rights and claims as well as all obligations and liabilities
\n resulting therefrom, including, without limitation, the pension liability
\n with respect to the French Transferred Employees; provided, however, that
\n this sentence shall not be read as requiring Buyer to assume any Plans
\n other than such individual employment contracts. TRW and Buyer
\n acknowledge that these employment relationships, with rights and
\n obligations including pension obligations with respect to French Affected
\n Employees will pass to Buyer (pursuant to Article L. 122-12 of the French
\n Labour Code) as a result of the purchase of the sold Business. TRW shall
\n provide Buyer with each form of contract with such employees no later
\n than thirty Business Days after the Closing together with a statement of
\n the number of employees subject to such form agreement. Without limiting
\n the forgoing, Buyer will assume all of TRW’s and the Asset Selling
\n Subsidiary’s obligations and liabilities under any pension plans,
\n including the pension plan for executives (the “French Pension Plan”),
\n maintained by TRW or any of its Subsidiaries for the French Transferred
\n Employees and those already entitled to and receiving benefits under such
\n pension plans as of the Closing, as referenced in, and pursuant to
\n assumptions consistent with those used for, the Towers Report, but in any
\n event to the extent required by law. As soon as practicable following the
\n Closing, TRW will transfer all of the assets held with respect to the
\n French Pension Plan in respect of the French Transferred Employees’
\n accrued liabilities to Buyer.<\/p>\n
(s) US Salaried Asset Transfer<\/p>\n
(i) As soon as practicable following the Closing Date,
\n Buyer will:<\/p>\n
(A) establish a defined benefit pension plan designed to
\n be a qualified plan under section 401(a) of the Code; or<\/p>\n
(B) designate an existing defined benefit pension plan
\n that is so qualified, (such plan, in either case, the “Buyer U.S.
\n Pension Plan”) to provide benefits to Transferred Employees who
\n were participants in the TRW Salaried Pension Plan as of the
\n Closing Date and to accept the transfer of assets and assumption
\n of liabilities from the TRW Salaried Pension Plan as provided for
\n in Section 6.8(s)(ii).<\/p>\n
(ii) Subject to Section 6.8(s)(vi), as soon as practicable
\n following the Closing, TRW will cause the trustees of the TRW Salaried
\n Pension Plan to transfer to the Buyer U.S. Pension Plan an amount in
\n cash, to the extent reasonably practicable, as may be determined by
\n the trustees <\/p>\n
76<\/p>\n
of the TRW Salaried Pension Plan (or in kind, to the extent requested
\n by Buyer) calculated in accordance with the following formula:<\/p>\n
W = X minus Z, both adjusted for Y<\/p>\n
where:<\/p>\n
W = the amount to be transferred to the Buyer U.S.
\n Pension Plan under this Section 6.8(s)(ii);<\/p>\n
X = the assets in the TRW Salaried Pension Plan
\n equal to the “Projected Benefit Obligations”
\n (calculated in accordance with FAS 87) of the
\n Transferred Employees as of the Closing Date (the
\n “Measurement Date”) determined on the basis of the
\n actuarial and other assumptions and methods used
\n by the TRW Salaried Pension Plan, subject to
\n Section 6.8(s)(iii), but in no event less than the
\n amount required to be transferred under section
\n 414(l) of the Code (using ERISA section 4044 safe
\n harbor assumptions to the extent applicable and
\n where not applicable relying on the assumptions
\n used in the most recent expense valuation
\n calculated in accordance with FAS 87 prior to the
\n date of the Agreement);<\/p>\n
Y = the sum of:<\/p>\n
the time-weighted rate of return (positive
\n or negative), net of expenses, on the assets
\n in the TRW Salaried Pension Plan from the
\n Measurement Date and ending on the last day
\n of the month immediately preceding the date
\n of transfer under this Section 6.8(s)(ii)
\n applied solely to X and Z; and<\/p>\n
for the month during which the date of
\n transfer occurs, interest at the total rate
\n of return on a 90-day Treasury Bill as
\n determined by Merrill Lynch for the last day
\n of the month preceding the month of
\n transfer; and<\/p>\n
Z = any benefits paid by the TRW Salaried Pension
\n Plan to such employees after the Closing Date and
\n prior to the date of such transfer under this
\n Section 6.8(s)(ii) to the Transferred Employees.<\/p>\n
(iii) All determinations of the amount of assets of the
\n TRW Salaried Pension Plan to be transferred under Section 6.8(s)(ii)
\n will be made by the actuaries for the TRW Salaried Pension Plan. Buyer
\n may retain its designated actuary to perform the determinations under
\n Section<\/p>\n
77<\/p>\n
6.8(s)(ii). If there is a dispute between those actuaries, then TRW and
\n Buyer will agree on a third actuary to resolve the dispute. The
\n independent actuary shall act on the following bases, as applicable:<\/p>\n
(A) the independent actuary shall not act as an
\n arbitrator;<\/p>\n
(B) TRW and Buyer shall each provide the
\n independent actuary with all information relating to the
\n dispute which the independent actuary reasonably requires; and<\/p>\n
(C) any findings or reports prepared by the
\n independent actuary will be provided to both TRW and Buyer at
\n the same time.<\/p>\n
(iv) The decision of the independent actuary is, in the
\n absence of fraud or manifest error, final and binding on the parties.
\n TRW and Buyer shall each pay one half of the independent actuary’s
\n costs.<\/p>\n
(v) In connection with matters addressed in this Section
\n 6.8(s), TRW and Buyer will co-operate in:<\/p>\n
(A) the filing of any IRS Forms 5310-A required
\n with respect to the transfer of assets and liabilities
\n described in this Section 6.8(s);<\/p>\n
(B) making all other filings required under the
\n Code or ERISA and any applicable securities laws; implementing
\n all appropriate communications with participants;<\/p>\n
(C) transferring appropriate records;<\/p>\n
(D) taking all such other actions as may be
\n necessary and appropriate to implement the provisions of this
\n Section 6.8(s) in a timely manner; and<\/p>\n
(E) transferring all information to enable the
\n enrolled actuaries for the TRW Salaried Pension Plan and Buyer
\n the Salaried Pension Plan to issue the certifications required
\n by section 6058(b) of the Code (Form 5310-A).<\/p>\n
(vi) The transfer referred to in Section 6.8(s)(ii) will
\n not take place until as soon as practicable after the later of:<\/p>\n
(A) the expiration of the 30-day period following
\n the filing of any required notices with the IRS pursuant to
\n section 6058(b) of the Code;<\/p>\n
78<\/p>\n
(B) the date TRW has delivered to Buyer (with
\n respect to the TRW Salaried Pension Plan) a copy of the most
\n recent determination letter from the IRS to the effect that
\n the TRW Salaried Pension Plan is qualified under section
\n 401(a) of the Code, together with documentation (in a form and
\n substance satisfactory to Buyer acting reasonably) evidencing
\n the due adoption of any amendments to the TRW Salaried Pension
\n Plan required by the IRS as a condition to such qualification
\n and a certificate from TRW that no events have occurred that
\n would adversely affect the continued validity of such
\n determination letters (apart from the enactment of any United
\n States’ federal law for which the remedial amendment period
\n under section 401(b) of the Code has not yet expired); and<\/p>\n
(C) the date Buyer has delivered to TRW a copy of
\n the most recent determination letter from the IRS to the
\n effect that the Buyer U.S. Pension Plan is qualified under
\n section 401(a) of the Code, together with documentation (in a
\n form and substance satisfactory to TRW acting reasonably)
\n evidencing the due adoption of any amendments to the Buyer
\n U.S. Pension Plan required by the IRS as a condition to such
\n qualification and a certificate from Buyer that no events have
\n occurred that would adversely affect the continued validity of
\n such letters (apart from the enactment of any United States’
\n federal law for which the remedial amendment period under
\n section 401(b) of the Code has not yet expired).<\/p>\n
(vii) The parties agree to pursue the receipt of the
\n items described in this Section 6.8(s) as soon as reasonably
\n practicable following the Closing Date. For each Buyer U.S. Pension
\n Plan which is newly created (if any), Buyer will provide TRW with
\n written evidence (in form and substance satisfactory to TRW acting
\n reasonably) of:<\/p>\n
(A) the adoption of the Buyer U.S. Pension Plan by
\n Buyer; and<\/p>\n
(B) the creation of the trust under the Buyer U.S.
\n Pension Plan.<\/p>\n
(C) Notwithstanding anything in this Agreement to
\n the contrary, the Transferred Employees who became
\n participants in the Buyer U.S. Pension Plan will be given
\n service credit for such plan for benefit accrual purposes
\n equal to their service credit under the TRW Salaried Pension
\n Plan.<\/p>\n
(t) Cooperation. TRW and Buyer will cooperate to effectuate
\n the provisions of this Section 6.8, including without limitation,
\n informing and consulting<\/p>\n
79<\/p>\n
with trade unions, works councils, and employee representatives prior
\n to the Closing Date in accordance with, and at such time or times as
\n shall be required under, applicable law. TRW and Buyer shall cooperate
\n and consult with one another as necessary as to the content of such
\n information and consultation.<\/p>\n
(u) Pension Shortfall<\/p>\n
(i) For purposes of this Section 6.8(u), (a) “Buyer PBO” shall be
\n calculated pursuant to the provisions of Schedule 6.8(u) to
\n the Agreement, (b) “TRW PBO” shall have the meaning set forth
\n in the Actuary’s Letter that is part of Schedule 6.8(e)(ii)
\n (the “Actuary’s Letter”), (c) the “Transfer Amount” shall have
\n the meaning set forth in the Actuary’s Letter, (d) “unadjusted
\n Transfer Amount” shall have the meaning set forth in the
\n Actuary’s Letter, (e) “Full Funding Amount” is the amount by
\n which the Buyer PBO exceeds the TRW PBO (but in no event
\n greater than $35 million), (f) the “Pension Surplus” means the
\n excess, if any, of the unadjusted Transfer Amount over the TRW
\n PBO, (g) the “Pension Deficit” means the excess of E17.1
\n million (or E19.4 million, if the assets applicable to French
\n and German pension liabilities, denominated in Euros as of
\n January 1, 2002, are not transferred by TRW to Buyer) over the
\n German pension liability, denominated in Euros as of January
\n 1, 2002, retained by TRW (which is a component of the German
\n pension liability described in the Towers Perrin Summary
\n Report provided in Annex 1 to Section 4.13 of the TRW
\n Disclosure Letter (the “Towers Report”) and is determined
\n under the same assumptions set forth in the Towers Report), if
\n any, with respect to former TRW employees converted into US
\n dollars at the spot $\/E exchange rate two days before the
\n payment thereof in accordance with paragraphs (iii), (iv) or
\n (vi) below, plus $6.2 million, (h) “Members” shall have the
\n meaning set forth in Schedule 6.8(e)(ii), (i) “Consenting
\n Members” shall have the meaning set forth in Schedule
\n 6.8(e)(ii), and (j) “Currency Averaged Pension Deficit” means
\n the excess of E17.1 million (or E19.4 million, if the assets
\n applicable to French and German pension liabilities,
\n denominated in Euros as of January 1, 2002, are not
\n transferred by TRW to Buyer) over the German pension
\n liability, denominated in Euros as of January 1, 2002,
\n retained by TRW, if any, with respect to former TRW employees
\n converted into US dollars at the average of the spot $\/E
\n exchange rates on (i) January 1, 2002 and (ii) two days before
\n payment, plus $6.2 million. In the event of any conflict
\n between the provisions of this Section 6.8(u) and Schedule
\n 6.8(e)(ii), the provisions of this Section 6.8(u) shall
\n control. For the avoidance of doubt, (x) once a Pension
\n Deficit is paid, the amount deemed paid for purposes of this
\n Agreement shall not vary when referred to in other
\n calculations in this Section 6.8(u) and (y) the amount of the
\n Buyer PBO, TRW PBO, Transfer Amount, unadjusted Transfer
\n Amount, Full Funding Amount and Pension Surplus each shall be
\n deemed to be in pounds sterling for purposes of this
\n Agreement.<\/p>\n
80<\/p>\n
(ii) The parties hereby agree to use their reasonable best efforts
\n to effectuate the calculation of the unadjusted Transfer
\n Amount and the transfer of the Transfer Amount pursuant to
\n Schedule 6.8(e)(ii), including without limitation soliciting
\n consents from Members to transfer their accrued benefits under
\n the TRW Pension Scheme to a Buyer UK Pension Scheme in the
\n event such Members become UK Transferred Employees (the
\n “Transfer Consents”), and instructing their respective
\n actuaries to perform the actuarial services necessary to
\n calculate the unadjusted Transfer Amount and the TRW PBO and
\n the Buyer PBO as promptly as practicable. Buyer shall solicit
\n Transfer Consents as soon as practicable following the
\n execution of this Agreement, and TRW shall cooperate fully in
\n assisting Buyer to solicit such consents. The period during
\n which Members may provide Transfer Consents shall be four
\n weeks following the later of the Closing Date and the date of
\n commencement of the solicitation of Transfer Consents and may
\n be extended up to an additional six weeks at the discretion of
\n Buyer (the “Transfer Consent Period”), and the end of such
\n four-week or extended period shall be the end of the Transfer
\n Consent Period for purposes of this Section 6.8(u). Buyer
\n agrees to consider in good faith any request by TRW that it be
\n permitted to make the payments described in subsection (iii)
\n and (iv) below in lieu of transferring the Transfer Amount
\n pursuant to this Section 6.8(u)(ii).<\/p>\n
(iii) If at the six-month anniversary of the end of the Transfer
\n Consent Period (or earlier = in the case of (y) below), (x)
\n the Transfer Amount has not been transferred or (y) the
\n Trustees of the TRW Pension Scheme have determined not to
\n permit the transfer of any portion of the Pension Surplus to a
\n Buyer UK Pension Scheme, TRW shall transfer the Pension
\n Deficit in a lump sum within five business days following the
\n first to occur of (a) the six-month anniversary of the end of
\n the Transfer Consent Period or (b) the action by the trustees
\n of the TRW Pension Scheme denying the transfer of the Pension
\n Surplus, but in no event prior to the Closing Date.<\/p>\n
(iv) If at the nine-month anniversary of the end of the Transfer
\n Consent Period, (or = earlier in the case of (y) below), (x)
\n the Transfer Amount has not been transferred or (y) the
\n Trustees of the TRW Pension Scheme have determined not to
\n permit the transfer of any portion of the Pension Surplus to a
\n Buyer UK Pension Scheme, TRW shall transfer the Full Funding
\n Amount (or if the Full Funding Amount cannot be calculated,
\n $35 million (as modified below, the “Estimated Full Funding
\n Amount”)), converted to U.S. dollars at the spot $\/Pound
\n Sterling exchange rate on the date that is two days before
\n payment, to Buyer within five business days following the
\n first to occur of (a) the nine-month anniversary of the end of
\n the Transfer Consent Period or (b) the action of the trustees
\n of the TRW Pension Scheme denying the transfer of the Pension
\n Surplus, but in no event prior to three months after the end
\n of the Transfer Consent Period. Within five business days
\n following the final calculation of the Full Funding Amount,
\n TRW and Buyer shall, if necessary, adjust the amount
\n transferred as the <\/p>\n
81<\/p>\n
Estimated Full Funding Amount by a payment in U.S. dollars
\n from Buyer to TRW equal to the excess of the Estimated Full
\n Funding Amount over the Full Funding Amount, so that Buyer
\n will have actually received and retained the Full Funding
\n Amount in US dollars (the Full Funding Amount having been
\n converted to U.S. dollars at the spot $\/Pound Sterling
\n exchange rate on the date that is two days before payment)
\n pursuant to this Section 6.8(u)(iv).<\/p>\n
(v) If the Transfer Amount is transferred to the Buyer UK Pension
\n Scheme following the time that a cash payment is made by TRW
\n to Buyer pursuant to Section 6.8(u)(iii) or (iv) above and
\n within 48 months following the end of the Transfer Consent
\n Period, Buyer shall reimburse TRW for such cash payment by
\n paying to TRW the amount obtained by netting the payment
\n required by paragraph (vi) below against the refund of such
\n cash payment plus interest on such amount from the one-year
\n anniversary of the date on which TRW made the payment under
\n clause (iii) to the date on which Buyer makes the payment
\n required under this sentence at a rate equal to the daily
\n average one month LIBOR plus one percent (1%) during such
\n period. If the Transfer Amount is transferred to the Buyer UK
\n Pension Scheme more than 48 months following the end of the
\n Transfer Consent Period, Buyer shall have no obligation to
\n reimburse TRW for any cash payments made under this Section
\n 6.8(u). For the avoidance of doubt, TRW shall have no
\n obligation to make any payment to the Buyer under this Section
\n 6.8(u)(v).<\/p>\n
(vi) If a transfer of the Transfer Amount is made from the TRW
\n Pension Scheme to the Buyer UK Pension Scheme, TRW will pay
\n Buyer in US dollars within five business days following such
\n transfer, the amount determined, if any, under clause (a) or
\n (b) below, as applicable:<\/p>\n
(a) If the Pension Surplus (transferred as part of the
\n Transfer Amount) is less than the Full Funding Amount,
\n an amount in US dollars equal to the sum of (1) the
\n excess of (A) the Full Funding Amount over (B) the
\n Pension Surplus converted to US dollars at the average
\n of the $\/Pound Sterling exchange rate at January 1, 2002
\n and the date that is two days before the transfer of the
\n Transfer Amount, plus (2) the Pension Deficit; or<\/p>\n
(b) If the Pension Surplus (transferred as part of the
\n Transfer Amount) is equal to or greater than the Full
\n Funding Amount, an amount in US dollars equal to the (1)
\n the Currency Averaged Pension Deficit, less (2) the
\n quotient obtained by dividing (A) the excess of the
\n Pension Surplus over the Full Funding Amount converted
\n to US dollars at the average of the $\/Pound Sterling
\n exchange rate at January 1, 2002 and the date that is
\n two days before the transfer of the Transfer Amount, by
\n (B) three.<\/p>\n
82<\/p>\n
For the avoidance of doubt, Buyer shall have no obligation to
\n make any payment to TRW under this Section 6.8(u)(vi).<\/p>\n
(vii) The Buyer UK Pension Scheme shall be required to maintain
\n “ringfencing” on the use of the Pension Surplus for no more
\n than five years from the Closing Date, and Buyer shall be
\n specifically permitted to use the Pension Surplus for
\n Consenting Members for (a) employer contribution holidays, (b)
\n retirement redundancy benefits and (c) augmentations. In the
\n event the trustees of the TRW Pension Scheme require a
\n deviation from the provisions of this Section 6.8(u)(viii) in
\n order to effectuate a transfer of the Transfer Amount, the
\n parties agree that such transfer will not occur unless
\n expressly agreed to by Buyer and, if it would be adversely
\n affected, TRW.<\/p>\n
(viii) At the Closing, TRW will pay Buyer a cash amount in US
\n dollars equal to $20.7 million in connection with the retiree
\n medical liability assumed by Buyer pursuant to Section
\n 6.8(d)(iii)(C).<\/p>\n
(ix) At the Closing, TRW will pay Buyer a cash amount in US dollars
\n equal to $300,000 in connection with the retiree medical
\n liability assumed by Buyer pursuant to Section 6.8(f)(iv).<\/p>\n
The unadjusted Transfer Amount will be calculated by TRW’s actuary
\nas provided in Schedule 6.8(e)(ii) and Buyer’s actuary shall have the right to
\nreview the TRW actuary’s calculation pursuant to the terms of paragraph 4 of
\nSchedule 6.8(e)(ii) with disputes settled pursuant to paragraph 4 of Schedule
\n6.8(e)(ii). Buyer’s actuary will calculate the Full Funding Amount subject to
\nthe right of TRW’s actuary to review those calculations pursuant to the same
\nprinciples as are set forth in paragraph 4 of Schedule 6.8(e)(ii), with disputes
\nsettled pursuant to the same principles as are set forth in paragraph 8 of
\nSchedule 6.8(e)(ii) (such principles in paragraph 4 and 8, the “Actuarial Review
\nPrinciples”). TRW’s actuary will calculate the retained German pension liability
\nof TRW subject to the right of Buyer’s actuary to review pursuant to the
\nActuarial Review Principles.<\/p>\n
(v) Access to Affected Employees. After the Closing, Buyer will
\npermit TRW (and its subsidiaries and affiliates) to have access to Transferred
\nEmployees of Buyer or the Aerospace Subsidiaries or controlled Aerospace
\nAffiliates whom TRW or its Subsidiaries or Affiliates may reasonably need in
\norder to defend or prosecute any legal or administrative action to which TRW or
\nany of its Subsidiaries or Affiliates is a party and which relates to the
\nconduct of the Business prior to the Closing. TRW or the applicable Subsidiary
\nor Affiliate will pay or reimburse Buyer for all reasonable expenses which may
\nbe incurred by such employees in connection therewith, including, without
\nlimitation, all travel, lodging, and meal expenses, and TRW or the applicable
\nSubsidiary or Affiliate will compensate Buyer for the number of whole business
\ndays spent by each such employee in providing such services at the rate of one
\nhundred thirty percent (130%) of the average daily gross pay per business day
\n(excluding the value of employee benefits) of such employee during the calendar
\nmonth in which such services are<\/p>\n
83<\/p>\n
performed. Buyer may deny such access to the extent it reasonably believes such
\naccess would be disruptive to the business, other than to a de minimus extent,
\nor to the extent such access interferes, other than to a de minimus extent, with
\nthe conduct of the business.<\/p>\n
Section 6.9 Novation of Government Contracts; Hedging Contracts.
\nThe parties will cooperate and use their reasonable best efforts to obtain, to
\nthe extent legally required, the novation of all government contracts and
\nsubcontracts included in the Acquired Assets. Subject to Section 2.3(a)(xiv),
\nthe parties will cooperate and use their reasonable best efforts to obtain the
\nnovation of each hedging Contract set forth on Schedule 2.3(a)(xiv).<\/p>\n
Section 6.10 Tax Matters.<\/p>\n
(a) Assistance and Cooperation. Within sixty (60) days after the
\nreceipt of a customary package of Tax information materials from TRW, Buyer
\nshall provide to TRW a package of Tax information materials, including schedules
\nand work papers required by TRW to enable TRW to prepare and file all Tax
\nReturns required to be prepared and filed by it with respect to the Acquired
\nAssets to the extent that TRW or any of the Asset Selling Subsidiaries has
\ntransferred the relevant books and records to Buyer in connection herewith.
\nBuyer shall prepare such package in good faith in a manner consistent with TRW’s
\npast practice. After the Closing Date, each of TRW and Buyer shall (and shall
\ncause their respective Affiliates to), at the reasonable request of the other
\nparty, (i) assist the other party in preparing and filing any Tax Returns,
\namended Tax Returns or refund claims which such other party is responsible for
\npreparing and filing including Tax Returns and amended Tax Returns with respect
\nto the Acquired Assets, and (ii) cooperate fully with the other party in
\npreparing for any audits of, or disputes with any Tax Authority regarding, any
\nTax Returns of TRW or its Affiliates, any of the Aerospace Subsidiaries or their
\nAffiliates or the Acquired Assets. Such assistance and cooperation shall include
\nproviding the other party and, at the direction of the other party, any Tax
\nAuthority, with copies (at the other party’s expense) of relevant Tax Returns or
\nportions thereof, together with accompanying schedules, related work papers and
\ndocuments relating to rulings or other determinations by Tax Authorities. Each
\nof TRW and Buyer shall make its employees available on a basis mutually
\nconvenient to both parties to provide explanations of any documents or
\ninformation provided hereunder to the other party and, at the direction of the
\nother party, any Tax Authority. In connection therewith, TRW and Buyer shall not
\ndispose of any Tax work papers, books or records relating to any of the
\nAerospace Subsidiaries or the Acquired Assets until the later of the expiration
\nof the six-year period following the Closing Date or expiration of the statute
\nof limitations of the taxable period to which such Tax Returns and other
\ndocuments relate, without regard to extensions, except to the extent notified by
\nthe other party in writing of such extensions for the respective Tax periods,
\nand thereafter shall give the other party reasonable written notice, and the
\nopportunity to take possession of any such items, before disposing of such
\nitems. Any information obtained under this Section 6.10(a) shall be kept
\nconfidential except as may be otherwise necessary in connection with the filing
\nof Tax Returns or claims for refund or in conducting an audit or other Tax
\nproceeding.<\/p>\n
84<\/p>\n
(b) Tax Indemnification.<\/p>\n
For the purpose of this Section 6.10, “Losses” shall mean any and
\nall actual losses, liabilities, costs and expenses (including reasonable
\nattorneys’ fees and costs of investigation), after giving effect to any amounts
\nrecovered from third parties, including amounts recovered under insurance
\npolicies, with respect to such Losses.<\/p>\n
(i) Indemnification by TRW. Notwithstanding any other
\n provision of this Agreement or any Ancillary Agreement, TRW shall
\n indemnify Buyer, from and against and in respect of any and all Losses
\n incurred by Buyer, which may be imposed on, sustained, incurred or
\n suffered by or assessed against Buyer, directly or indirectly, to the
\n extent relating to or arising out of:<\/p>\n
(A) any liability for Taxes imposed upon or relating
\n to TRW, the TRW Selling Shareholders or the Asset Selling
\n Subsidiaries for any period (whether before or after the Closing
\n Date);<\/p>\n
(B) any liability for Taxes imposed on each of the
\n Aerospace Affiliates, the Aerospace Subsidiaries, and the Acquired
\n Assets for any Pre-Closing Tax Period;<\/p>\n
(C) any liability, or increase in a liability, for
\n Taxes imposed on Buyer or any of its Affiliates (including, after
\n the Closing Date, the TRW-controlled Aerospace Affiliates) as a
\n result of any failure by TRW to perform or comply with its
\n obligations under this Agreement;<\/p>\n
(D) any Taxes for which TRW is liable pursuant to
\n Section 6.6; and<\/p>\n
(E) any liability for Restructuring Taxes (together
\n with the Taxes described in clauses (A) through (E), “Excluded
\n Taxes”).<\/p>\n
(ii) Indemnification by Buyer. Notwithstanding any other
\n provision of this Agreement or any Ancillary Agreement, Buyer shall
\n indemnify TRW from and against and in respect of any and all Losses
\n incurred by TRW or its Affiliates, which may be imposed on, sustained,
\n incurred or suffered by or assessed against TRW or its Affiliates,
\n directly or indirectly, to the extent relating to or arising out of:<\/p>\n
(A) any liability for Taxes imposed upon or relating
\n to Buyer or Buyer’s designee for any period (whether before or after
\n the Closing Date) for which TRW is not required to indemnify Buyer
\n pursuant to Section 6.10(b)(i) hereof;<\/p>\n
85<\/p>\n
(B) any liability for Taxes imposed on any of the
\n Aerospace Affiliates and any liability for Taxes incurred in
\n connection with the Business, for Post-Closing Tax Periods;<\/p>\n
(C) any liability, or increase in a liability, for
\n Taxes imposed on TRW or any of its Affiliates as a result of any
\n failure by Buyer to perform or comply with its obligations under
\n this Agreement; and<\/p>\n
(D) any and all Taxes for which Buyer is liable
\n pursuant to Section 6.6.<\/p>\n
(iii) Payment in full of any amount due from TRW or Buyer
\n under this Section 6.10(l) shall be made to the affected party in
\n immediately available funds at least two business days before the
\n date payment of the Taxes to which such payment relates is due, or,
\n if no Tax is payable, within fifteen days after written demand is
\n made for such payment.<\/p>\n
(c) Survival of Tax Provisions. Notwithstanding any other
\nprovision of this Agreement to the contrary, any claim to be made pursuant to
\nSection 6.10 hereof shall survive until thirty days after the expiration of the
\napplicable statutes of limitations relating to the Taxes at issue.<\/p>\n
(d) Tax Treatment. Any payment made pursuant to this Section 6.10
\nwill be treated as an adjustment to the Purchase Price for all Tax purposes. TRW
\nand Buyer agree, and agree to cause the controlled Aerospace Affiliates (and to
\nuse reasonable best efforts to cause the Aerospace Affiliates not controlled
\ndirectly or indirectly by TRW), not to take any position inconsistent with this
\nSection 6.10(d) for Tax purposes in connection with their respective Federal,
\nstate and local Tax returns and other filings, unless required to do otherwise
\npursuant to a Final Determination.<\/p>\n
(e) TRW warrants and undertakes to Buyer that all documents
\nforming part of the title to any asset that is the subject of the restructuring
\ndescribed in Schedule 2.1 and that a UK resident company may wish to enforce or
\nproduce in evidence are or will be duly stamped and have where appropriate been
\nor will be adjudicated. If this warranty is untrue, or if this undertaking is
\nnot satisfied, with respect to any document and in the reasonable opinion of
\nBuyer it is necessary to procure stamping of such document, then at Buyer’s
\noption (i) TRW shall pay to Buyer by way of liquidated damages an amount equal
\nto any unpaid stamp duty and any interest or penalties payable in respect
\nthereof or (ii) TRW shall procure the stamping of such document.<\/p>\n
Section 6.11 Transition and Ancillary Agreements.<\/p>\n
(a) Between the signing of this Agreement and the Closing, the
\nparties shall negotiate in good faith and enter into an agreement (the
\n“Transition Agreement”) pursuant to which TRW shall, or shall cause its
\nAffiliates to, provide such services as requested by Buyer, which services may
\nbe necessary to facilitate the operation of the<\/p>\n
86<\/p>\n
Business during the period following the Closing and shall include at a maximum
\nthose services that are currently provided to the Business by TRW or any of its
\nAffiliates, including without limitation all services set forth in Section
\n4.24(a) of the TRW Disclosure Letter (but not those noted in Section 4.24(b) of
\nthe TRW Disclosure Letter), and which are necessary to conduct the Business as
\ncurrently conducted. At Buyer’s request, these services shall be provided (i)
\nduring the period from the Closing Date until the first anniversary of the
\nClosing Date, (ii) in substantially the same manner as of the date hereof and
\n(iii) at a cost not to exceed the direct cost of providing such services without
\ntaking into account any allocation of overhead. Between the signing of this
\nAgreement and the Closing, the parties shall negotiate in good faith such other
\nagreements as are reasonably necessary to consummate the transactions
\ncontemplated by this Agreement, and such agreements together with the Transition
\nAgreement, the Local Transfer Agreements, the Insurance Agreement and the
\nlicense agreements referenced in Sections 6.11(a), 6.14(a), 6.14(b) and 6.20
\nhereof shall constitute the “Ancillary Agreements”. If, and to the extent an
\nAffiliate of TRW is a party to any of the Ancillary Agreements, TRW will
\nunconditionally guarantee the performance of such Affiliate under that
\nagreement. If, and to the extent an Affiliate of Buyer is a party to any of the
\nAncillary Agreements, Buyer will unconditionally guarantee the performance of
\nsuch Affiliate under that agreement.<\/p>\n
(b) For those foreign jurisdictions where (i) applicable laws in
\nsuch jurisdiction require any of the parties to be a party to a Local Transfer
\nAgreement in order to effect the sale, assignment, transfer or delivery (as the
\ncase may be) of Assets in such jurisdiction, or (ii) a Local Transfer Agreement
\nis otherwise deemed necessary or appropriate for tax or other purposes, TRW or
\nthe applicable TRW Selling Shareholders or Asset Selling Subsidiaries. Buyer
\nshall negotiate in good faith to enter into a Local Transfer Agreement for each
\nsuch jurisdiction between the date hereof and the Closing Date. “Local Transfer
\nAgreements” shall mean the separate transfer and sale agreements to be entered
\ninto by TRW, the applicable TRW Selling Shareholders or Asset Selling
\nSubsidiaries and Buyer for the transfer, assignment and sale of the Equity
\nInterest or the Acquired Assets, as the case may be, in such form and substance
\nas may be reasonably required to give effect to such transfer, assignment and
\nsale or the allocation of the Purchase Price in accordance with Section 2.7
\nunder the applicable laws in effect in the jurisdiction in which the relevant
\nAcquired Assets are located or which governs the Equity Interest. The terms of
\nthe Local Transfer Agreements shall be consistent with and governed by the terms
\nof this Agreement.<\/p>\n
Section 6.12 Waiver of Bulk Sales Requirement. Each of the parties
\nhereto waives compliance with any applicable bulk sales laws, including without
\nlimitation the Uniform Commercial Code Bulk Transfer provisions.<\/p>\n
Section 6.13 Post-Closing Access to Records and Employees. Buyer
\nshall permit, to the extent permitted by law, TRW, and any of its agents,
\nrepresentatives, advisors and consultants, to have reasonable access to the
\nemployees of the Business for information relating to periods up to and
\nincluding the Closing which is reasonably requested by TRW, subject to the same
\nconditions and limitations as set forth in Section<\/p>\n
87<\/p>\n
6.2(a). This Section 6.13 does not apply to Taxes or Tax Returns, which are
\ncovered by Section 6.10(d) hereof.<\/p>\n
Section 6.14 Intellectual Property Licenses; Related Matters.<\/p>\n
(a) Buyer License. The parties shall enter into a license
\nagreement, substantially on the terms and in the form of Schedule 6.14(a),
\nwhereby Buyer shall grant to TRW, effective as of Closing, a perpetual,
\nirrevocable, royalty-free, in those jurisdictions where TRW has such rights,
\nnon-exclusive license set forth on Schedule 6.14(a) to the Licensed-Back
\nIntellectual Property, and to use the foregoing, to make, have made, use and
\nsell products and processes in the fields other than the Business.<\/p>\n
(b) TRW License. The parties shall enter into a license agreement,
\nsubstantially on the terms and in the form of Schedule 6.14(b), whereby TRW
\nshall grant to Buyer, effective as of Closing, a perpetual, irrevocable,
\nroyalty-free, in those jurisdictions where TRW has such rights, non-exclusive
\nlicense set forth on Schedule 6.14(b) to the Licensed Intellectual Property, and
\nto use the foregoing, to make, have made, use and sell products and processes in
\nthe fields of the Business.<\/p>\n
(c) Lucas Trademarks. The parties shall negotiate in good
\nfaith to enter into a license agreement at Closing whereby TRW shall grant to
\nBuyer a perpetual royalty-free license with respect to the trademarks listed in
\nSchedule 6.14(c), which license shall be non-exclusive, except such license
\nshall be exclusive with respect to those trademarks listed on Schedule 6.14(c)
\nthat are used as of the date hereof in the aerospace field (except for those
\ntrademarks that are used in the design, development, manufacture or sale of (i)
\nengine valves, valve train components and valve train systems for aircraft
\napplications; (ii) occupant restraint components and systems and occupant head
\nand body protection components and systems for aircraft applications; (iii)
\nautomotive components and (iv) power systems and engine systems for applications
\nother than aircraft).<\/p>\n
(d) Trademark License. Notwithstanding Section 2.3(b)(iii) hereof,
\nBuyer and its Affiliates shall have the right to resell any and all of the
\nInventories included in the Assets. Within four months of the Closing with
\nrespect to products with a serial number or other conclusive mark identifying
\nwhether TRW or the Buyer manufactured such product, and within 30 days of the
\nClosing, with respect to all other products and inventory, Buyer will, and will
\ncause its Affiliates to, institute a procedure whereby a stamp or other
\nindelible identifying mark is affixed to products sold by the Business in order
\nto distinguish such products from products sold by the Business prior to the
\nClosing. Following the Closing, Buyer shall use the names, forms, marketing
\nmaterials, signage and similar items of any TRW Entity included in the Acquired
\nAssets only to the extent that the use thereof cannot be commercially reasonably
\navoided in the conduct of the Business following the Closing and shall in any
\nevent cease all such uses, for any purpose whatsoever, not more than four months
\nfollowing the Closing.<\/p>\n
(e) Effective as of the Closing, TRW shall grant to Buyer a
\nlimited, royalty-free license to use the Domain Names listed on Schedule 6.14(e)
\nattached hereto<\/p>\n
88<\/p>\n
solely in connection with the Business for a period of three (3) months from the
\ndate of Closing. Buyer shall cease all uses, for any purpose whatsoever no more
\nthan three months following the Closing.<\/p>\n
Section 6.15 Non-Competition Agreement. During the period
\nbeginning on the Closing Date and ending on the third anniversary thereof, none
\nof TRW nor any of its Subsidiaries shall directly or indirectly engage in any
\nbusiness or activity in any geographic area in which the Business operates which
\nis in competition with the Business, as conducted on the Closing Date; provided,
\nhowever, that neither TRW nor any of its Affiliates shall be prevented from:<\/p>\n
(i) acquiring as an investment in the ordinary course of
\n business (including investments by any trust of any of its employee
\n benefit plans) any securities required to be registered under the
\n Securities Exchange Act of 1934, as amended, of any Person to the extent
\n that such acquisitions do not result in TRW or any of its Affiliates
\n owning in the aggregate 5% or more of any class of such securities;<\/p>\n
(ii) acquiring (through merger, stock purchase or sale of
\n all or substantially all of the assets or otherwise) of ownership of or
\n any equity interest in any Person, provided that the annual revenues of
\n such Person from any business that competes with the Business are not more
\n than 10% of such Person’s total annual revenues (based on the most recent
\n full fiscal year revenues of such Person); or<\/p>\n
(iii) engaging and continuing to engage in any business or
\n activities in which TRW or any of its Subsidiaries shall be engaged
\n immediately after the Closing, including:<\/p>\n
(A) the design, development, manufacture and sale of
\n missile and spacecraft products;<\/p>\n
(B) the design, development, manufacture and sale of
\n engine valves and valve train components and valve train systems for
\n aircraft applications;<\/p>\n
(C) the design, development, manufacture and sale of
\n occupant restraint components and systems and occupant head and body
\n protection components and systems for aircraft applications;<\/p>\n
(D) the design, development, manufacture and sale of
\n avionics;<\/p>\n
(E) the design, development, manufacture and sale of
\n automotive components;<\/p>\n
89<\/p>\n
(F) the design, development, manufacture and sale of
\n power systems and engine systems for applications other than on
\n aircraft;<\/p>\n
(G) the design, development, provision and sale of
\n software, information consulting and related services;<\/p>\n
(H) integration of products into systems (e.g. UAVs
\n and other aeronautical and space platforms); and<\/p>\n
(I) purchasing aeronautical systems products from
\n third parties and incorporating such products into other TRW
\n products and selling such products;<\/p>\n
Nothing in this Agreement shall restrict the activities of any Person or any of
\nits Affiliates who engages in a business combination transaction resulting in
\nthe acquisition (by purchase or otherwise) of all or substantially all of the
\ncapital stock or assets of TRW; provided that nothing in this Section 6.15 shall
\nbe construed to allow TRW or any of its subsidiaries to directly or indirectly
\nengage in any business or activity otherwise prohibited by this Section 6.15 (it
\nbeing understood that if TRW is merged with an unaffiliated third party, the
\nresulting merged company will not be subject to the terms of this Section 6.15,
\nexcept that the assets of the resulting merged company that were the assets of
\nTRW immediately prior to such merger, as well as all subsidiaries of such merged
\ncompany that were previously subsidiaries of TRW, shall remain bound by this
\nSection 6.15).<\/p>\n
Section 6.16 No Hire and Non-Solicitation of Employees. None of
\nTRW, any of its Affiliates or any of their respective representatives will at
\nany time prior to one year from the Closing Date, directly or indirectly,
\nsolicit the employment or services of, or hire in any capacity (whether as an
\nemployee, consultant, independent contractor or otherwise), any Affected
\nEmployee who is a Transferred Employee without Buyer’s prior written consent.
\nNone of Buyer, any of its Affiliates or any of their respective representatives
\nwill at any time prior to one year from the Closing Date, directly or
\nindirectly, solicit the employment or services of, or hire in any capacity
\n(whether as an employee, consultant, independent contractor or otherwise), any
\nTRW Employee without TRW’s prior written consent. For purposes of this Section
\n6.16, the term “solicit the employment or services” shall not be deemed to
\ninclude generalized searches for employees through media advertisements of
\ngeneral circulation, employment firms, open job fairs or otherwise provided that
\nsuch searches are not focused or targeted on Persons employed by Buyer or any of
\nits Affiliates or TRW or any of its Affiliates, as the case may be. Nothing in
\nthis Agreement shall restrict the activities of any Person or any of its
\nAffiliates who engages in a business combination transaction resulting in the
\nacquisition (by purchase or otherwise) of all or substantially all of the
\ncapital stock or assets of TRW; provided that nothing in this Section 6.16 shall
\nbe construed to allow TRW or any of its subsidiaries to directly or indirectly
\nsolicit the employment of or hire any Affected Employee who is a Transferred
\nEmployee if otherwise prohibited by this<\/p>\n
90<\/p>\n
Section 6.16 (it being understood that if TRW is merged with an unaffiliated
\nthird party, the resulting merged company will not be subject to the terms of
\nthis Section 6.16, except that the portion of the resulting merged company that
\nwas TRW immediately prior to such merger, as well as all subsidiaries of such
\nmerged company that were previously subsidiaries of TRW, shall remain bound by
\nthis Section 6.16).<\/p>\n
Section 6.17 No Shop. From the date hereof until the earlier to occur
\nof (i) termination of this Agreement pursuant to the terms and conditions hereof
\nand (ii) the Closing, each TRW Participant will not (and each TRW Participant
\nwill cause each of its employees, officers, directors, representatives and
\nagents not to) (a) solicit, initiate, entertain, consider, encourage or accept
\nthe submission of any proposal or offer from any third party relating to the
\nacquisition (whether by merger, purchase of stock, purchase of assets or
\notherwise) of all or substantially all or any significant part of the Business
\nor of the Assets (other than through an offer or proposal for a majority of the
\nshares of TRW), or (b) participate in any discussions or negotiations (and each
\nTRW Participant shall immediately cease any discussions or negotiations that are
\nongoing) regarding, furnish any information with respect to, assist or
\nparticipate in any effort or attempt by any third party to do or seek any of the
\nforegoing.<\/p>\n
Section 6.18 Certain Transactions.<\/p>\n
(a) Buyer shall not, and shall not permit any of its Subsidiaries to,
\nacquire or agree to acquire by merging or consolidating with, or by purchasing a
\nsubstantial portion of the assets of or equity in, or by any other manner, any
\nbusiness or any corporation, partnership, association or other business
\norganization or division thereof, or otherwise acquire or agree to acquire any
\nassets if the entering into of a definitive agreement relating to or the
\nconsummation of such acquisition, merger or consolidation would reasonably be
\nexpected to (i) impose any material delay in the obtaining of, or significantly
\nincrease the risk of not obtaining, any authorizations, consents, orders,
\ndeclarations or approvals of any Governmental Entity necessary to consummate the
\ntransactions contemplated by this Agreement or the expiration or termination of
\nany applicable waiting period, (ii) significantly increase the risk of any
\nGovernmental Entity entering an order prohibiting the consummation of the
\ntransactions contemplated by this Agreement, (iii) significantly increase the
\nrisk of not being able to remove any such order on appeal or otherwise or (iv)
\nmaterially delay or prevent the consummation of the transactions contemplated by
\nthis Agreement. Notwithstanding the foregoing, the restrictions set forth in
\nthis Section 6.18 shall not apply (x) in the event a third party commences a
\ntender offer or exchange offer for equity securities of Buyer, which tender
\noffer or exchange offer, if consummated, would result in such third-party
\nofferor and\/or its affiliates beneficially owning securities having not less
\nthan a majority of the ordinary voting power in the election of directors
\n(“Majority Voting Power”) or (y) to any merger, consolidation or other business
\ncombination as a result of which Buyer’s stockholders own securities of the
\nultimate parent of the resulting entity having less than Majority Voting Power.<\/p>\n
(b) Prior to Closing, Buyer shall not, and shall not permit any of its
\nSubsidiaries to, divest or otherwise dispose of or enter into any agreement or
\narrangement<\/p>\n
91<\/p>\n
to divest or otherwise dispose of any of the assets of or equity in, or by any
\nother manner, the Business, except as set forth in Sections 6.3 and 6.4 hereof.<\/p>\n
Section 6.19 Environmental Matters. (a) Each party agrees that it will
\nnot, and agrees to use and use its reasonable best efforts to ensure that its
\nAffiliates do not, voluntarily or by discretionary action, accelerate the
\ntiming, or increase the cost, of any obligations of the other party under this
\nAgreement, except as required by law, provided the conduct of Phase I or Phase
\nII environmental assessments as part of a sale of any Real Property or sale of
\nthe Business shall not be construed as a violation of this Section 6.19;
\nprovided, further, that this Section 6.19(a) shall not require either party to
\nrefrain from taking any action for which it has a bona fide commercial purpose.<\/p>\n
(b) If pursuant to Section 2.4(a)(v) hereof either party shall be
\nentitled to manage any proceedings relating to any Environmental Claim and any
\nRemediation arising therefrom, such party must conduct its actions including any
\nRemediation in a good workmanlike and expeditious manner, consistent with
\nindustry standards, and use only competent and qualified professionals.
\nAdditionally, such party must continue to perform such Remediation until the
\nproject fully complies with applicable legal and Governmental Entity
\nrequirements.<\/p>\n
(c) In connection with any Remediation, the party entitled to the
\nmanagement thereof shall: (i) consult with the other party in connection with
\nsuch Remediation; (ii) provide all material correspondence to and from
\nGovernment Entities and any other third parties to the other party; (iii) give
\ndue and proper consideration to all reasonable directions of the other party and
\ntake into account such directions in the conduct of the Remediation; (iv)
\nprovide the other party a draft scope of any investigation prior to
\nimplementation of any Remediation and allow the other party the opportunity to
\ncomment on such draft scope; (v) provide the other party with all material
\ndrafts of specifications for the scope of remedial work prior to implementation
\nof such work; (vi) give the other party the opportunity to make comments and
\nprovide input on such draft scope and give due and proper consideration to such
\ncomments; (vii) give the other party the opportunity to observe the progress of
\nany Remediation and provide the other party advance notice of any material
\nRemediation; (viii) provide the other party with the opportunity to be present
\nand participate in any meeting of the Governmental Entity considering the
\nRemediation; and (ix) provide the other party with quarterly reports on the
\nprogress of all investigations and Remediations.<\/p>\n
Section 6.20 Insurance Matters. (a) Between the signing of this
\nAgreement and the Closing, TRW and Buyer shall negotiate in good faith and enter
\ninto the Insurance Agreement, based upon the terms and conditions set forth in
\nSchedule 6.20 hereto.<\/p>\n
(b) TRW shall maintain aviation products liability insurance for the
\nperiod beginning on the Closing Date thru April 30, 2004 for claims, lawsuits or
\nproceedings arising out of any occurrences taking place on the Closing Date thru
\nApril 30, 2004 and relating to a product manufactured by the Business prior to
\nthe Closing Date. Subject to insurance market conditions and insurer agreement,
\nTRW shall use all<\/p>\n
92<\/p>\n
reasonable efforts to continue an insurance program with at least the annual
\nlimits in place as of the date of this Agreement, and TRW shall use its
\nreasonable best efforts to have Buyer included as an additional insured under
\nsaid insurance. TRW shall have no obligation to maintain aviation products
\nliability insurance for claims, lawsuits or proceedings arising out of an
\noccurrence taking place after April 30, 2004. Buyer agrees to fully cooperate
\nwith TRW and its insurers in the investigation, analysis and resolution of any
\naviation product liability claim that is covered by the insurance that is the
\nsubject of this paragraph or which is covered by any previous insurance
\npurchased by TRW. Buyer further agrees to substantively continue the processes
\nand procedures relating to the investigation of incidents and the handling of
\nclaims that currently fall within the responsibility of the Business’ Aerospace
\nSafety Review Board (ASRB) and to provide TRW immediate notice of any occurrence
\nthat might give rise to a claim under the insurance described hereunder. TRW
\nshall provide Buyer with a certificate of insurance evidencing the purchase of
\ninsurance required pursuant to this Section 6.20(b) promptly following the
\nreceipt of such certificate.<\/p>\n
(c) Buyer shall maintain aviation products liability insurance for
\nclaims, lawsuits or proceedings that relate to a product manufactured by the
\nBusiness on or after the Closing Date. Furthermore, beginning on May 1, 2004
\nBuyer shall maintain aviation products liability insurance for any aviation
\nproduct liability claim, lawsuit or proceeding arising out of a product of the
\nBusiness irrespective of when the product was manufactured. Subject to insurance
\nmarket conditions and insurer agreement, Buyer shall use all reasonable efforts
\nto continue an insurance program with at least the annual limits in place as of
\nthe date of this Agreement, and Buyer shall use its reasonable best efforts to
\nhave TRW included as an additional insured for a period beginning with the
\nClosing Date and ending not less on April 30, 2009. TRW agrees to cooperate with
\nBuyer and its insurers in the investigation, analysis and resolution of any
\naviation product liability claim that is the subject of Buyer’s aviation product
\nliability insurance. Buyer shall provide TRW with a certificate of insurance
\nevidencing the purchase of insurance required pursuant to this Section 6.20(c)
\npromptly following the receipt of such certificate.<\/p>\n
Section 6.21 Communications with Customers. Buyer and TRW shall
\ncooperate with each other and shall use their respective reasonable best efforts
\nto obtain each of the third-party consents set forth in Section 4.6 of the TRW
\nDisclosure Letter. With respect thereto, subject to applicable law, TRW and
\nBuyer will (a) communicate the initial disclosure of Buyer’s agreement to
\nacquire the Business to third parties and the form and content of such
\ndisclosure shall be mutually agreed upon by Buyer and TRW and (b) permit the
\nother party to review in advance any proposed communication between it and any
\nthird party regarding any such consent.<\/p>\n
Section 6.22 Claim Management.<\/p>\n
(a) Buyer agrees that it will not, and agrees to use and use its
\nreasonable best efforts to ensure that its Affiliates do not, voluntarily or by
\ndiscretionary action, accelerate the timing, or increase the cost, of any
\nobligations of TRW under this <\/p>\n
93<\/p>\n
Agreement relating to Shared Campaign Claims or Pre-Closing Customer Contract
\nClaims, except as required by law.<\/p>\n
(b) If pursuant to Section 2.4(a)(iii) or (iv) hereof Buyer shall manage
\nany proceedings relating to any Shared Campaign Claims or Pre-Closing Customer
\nContract Claims, Buyer must conduct its actions in a good workmanlike and
\nexpeditious manner, consistent with industry standards, and use only competent
\nand qualified professionals with the goal of minimizing any amounts payable
\nconsistent with industry practice and consistent with the ordinary course of
\nbusiness of the Business.<\/p>\n
(c) In connection with management of any Shared Campaign Claims or
\nPre-Closing Customer Contract Claims for which TRW shall bear sole liability
\npursuant to Section 2.4 hereof, Buyer shall: (i) consult with TRW in connection
\nwith such management; (ii) provide any material correspondence to and from the
\nparties seeking payment pursuant to any Shared Campaign Claims or Pre-Closing
\nCustomer Contract Claims, that is reasonably requested by TRW; and (iii) give
\ndue and proper consideration to all reasonable directions of TRW in the conduct
\nof such management. With respect to all Shared Campaign Claims and Pre-Closing
\nCustomer Contract Claims, Buyer shall provide TRW with quarterly reports on the
\nprogress of all settlements of Shared Campaign Claims and Pre-Closing Customer
\nContract Claims.<\/p>\n
ARTICLE VII<\/p>\n
CONDITIONS<\/p>\n
Section 7.1 Conditions to Each Party’s Obligations. The respective
\nobligation of each party to effect the transactions contemplated by this
\nAgreement shall be subject to the satisfaction or waiver at or prior to the
\nClosing of the following conditions:<\/p>\n
(a) all authorizations, consents, registrations, notices or approvals
\nrequired by third parties (other than Governmental Antitrust Entities) and set
\nforth in Schedule 7.1(a) hereto shall have occurred or been obtained;<\/p>\n
(b) any waiting period (and any extension thereto) (i) applicable to the
\nconsummation of the transactions contemplated by this Agreement under the HSR
\nAct shall have expired or been terminated and (ii) approval by the European
\nCommission of the transactions contemplated by this Agreement shall have been
\nobtained pursuant to the EU Merger Regulation;<\/p>\n
(c) all waiting periods applicable to the transactions contemplated by
\nthis Agreement or any Ancillary Agreement under any applicable other antitrust
\nor competition law shall have expired or been terminated, all filings required
\nby law to be made prior to Closing by TRW or Buyer with, and all consents,
\napprovals and authorizations required by law to be obtained prior to Closing by
\nTRW or by Buyer from any Governmental Antitrust Entities under any applicable
\nforeign antitrust or<\/p>\n
94<\/p>\n
competition law (collectively, “Governmental Antitrust Consents”) in order to
\nconsummate the transactions contemplated by this Agreement shall have been made
\nor obtained (as the case may be), except where the failure for such waiting
\nperiods to expire or to be terminated, to make such filings, or to obtain any
\nsuch Governmental Antitrust Consents, individually or in the aggregate, is not
\nreasonably likely to have a Material Adverse Effect if the transactions
\ncontemplated by this Agreement were consummated to the extent legally
\npermissible;<\/p>\n
(d) no provision of any applicable law or regulation and no judgment,
\ninjunction (preliminary or permanent), order or decree that prohibits, makes
\nillegal or enjoins the consummation of the transactions contemplated by this
\nAgreement shall be in effect (each party taking any and all steps required by
\nSection 6.3 and Section 6.4 of this Agreement), except where the applicable law
\nor regulation or judgment, injunction, order or decree is not reasonably likely
\nto have more than an immaterial effect on the Business if the transactions
\ncontemplated by this Agreement were consummated to the extent legally
\npermissible; and<\/p>\n
(e) the Preliminary Transfers shall have been completed in accordance
\nwith Schedule 2.1 hereto.<\/p>\n
Section 7.2 Conditions to Obligations of Buyer. The obligation of Buyer
\nto effect the transactions contemplated by this Agreement shall further be
\nsubject to the satisfaction at or prior to the Closing of the following
\nconditions, which are for the benefit of Buyer only and may only be waived by
\nBuyer at or prior to the Closing in its sole discretion:<\/p>\n
(a) all representations and warranties of TRW in this Agreement (without
\ntaking into account any materiality or Material Adverse Effect qualification)
\nshall be true and correct, except where such failure to be so true and correct,
\nindividually or in the aggregate, has not resulted in, and would not be
\nreasonably likely to result in, a Material Adverse Effect, in each case as of
\nthe Closing Date with the same effect as though such representations and
\nwarranties had been made at and as of such time, other than representations and
\nwarranties that expressly speak as of a specific date or time (which shall be
\ntrue and correct, as modified in the manner described above with respect to
\nrepresentations and warranties which do not speak as of a specific date or time,
\nonly as of such time);<\/p>\n
(b) TRW shall have performed and complied with in all material respects
\nall of its covenants, undertakings and agreements required by this Agreement to
\nbe performed or complied with by it at or prior to the Closing; and<\/p>\n
(c) TRW shall have delivered or caused to be delivered to Buyer each of
\nthe documents specified in Schedule 3.2(a) hereof;<\/p>\n
Section 7.3 Conditions to Obligations of TRW. The obligation of TRW to
\neffect the transactions contemplated by this Agreement shall be further subject
\nto the satisfaction at or prior to the Closing of the following conditions,
\nwhich are for the<\/p>\n
95<\/p>\n
benefit of TRW only and may only be waived by TRW at or prior to the Closing in
\nits sole discretion:<\/p>\n
(a) all representations and warranties of Buyer in this Agreement
\n(without taking into account any materiality or material adverse effect
\nqualification) shall be true and correct, except where such failure to be so
\ntrue and correct, individually or in the aggregate, has not resulted in and
\nwould not be reasonably likely to result in, a material adverse effect on
\nBuyer’s ability to consummate the transactions contemplated hereby, in each case
\nas of the Closing Date with the same effect as though such representations and
\nwarranties had been made at and as of such time, other than representations and
\nwarranties that speak as of a specific date or time (which shall be true and
\ncorrect, as modified in the manner described above with respect to
\nrepresentations and warranties which do not speak as of a specific date or time,
\nonly as of such time);<\/p>\n
(b) Buyer shall have performed and complied with in all material
\nrespects all of its respective covenants, undertakings and agreements required
\nby this Agreement to be performed or complied with by it at or prior to the
\nClosing;<\/p>\n
(c) Buyer shall have delivered or caused to be delivered to TRW
\neach of the documents specified in Schedule 3.2(b) hereof.<\/p>\n
ARTICLE VIII<\/p>\n
TERMINATION<\/p>\n
Section 8.1 Termination. This Agreement may be terminated at any
\ntime prior to the Closing by:<\/p>\n
(a) mutual written consent of TRW and Buyer;<\/p>\n
(b) either TRW or Buyer if the Closing shall not have occurred on
\nor prior to the six month anniversary of this Agreement; provided, however, that
\nif (i) the Closing has not occurred by such date by reason of nonsatisfaction of
\nany of the conditions set forth in Section 7.1(a), Section 7.1(b) or Section
\n7.1(c) and (ii) all other conditions set forth in Article VII have heretofore
\nbeen satisfied or waived or are then capable of being satisfied, then such date
\nshall automatically be extended to the date that is the nine month anniversary
\nof this Agreement; provided, further, that the right to terminate this Agreement
\nunder this Section 8.1(b) shall not be available to any party whose failure to
\nfulfill in any material respect any obligation under this Agreement has caused
\nor resulted in the failure of the Closing to occur on or before such date,
\nwhether or not such date has been so extended;<\/p>\n
(c) TRW (i) if Buyer shall have breached or failed to perform in
\nany material respect any of its representations, warranties, covenants or other
\nagreements contained in this Agreement, which breach or failure to perform would
\nrender any condition to TRW’s obligations under Section 7.1 or 7.3 hereof
\nincapable of being<\/p>\n
96<\/p>\n
satisfied; provided, however, that if such breach or failure to perform is
\ncurable by Buyer through the exercise of its reasonable best efforts, and for so
\nlong as Buyer continues to exercise such reasonable best efforts, TRW may not
\nterminate this Agreement under this Section 8.1(c); provided, further, that the
\npreceding proviso shall not in any event be deemed to extend the date set forth
\nin Section 8.1(b), or (ii) if a condition under Section 7.1 or 7.3 hereof to
\nTRW’s obligations hereunder has been rendered incapable of being satisfied;<\/p>\n
(d) Buyer (i) if TRW shall have breached or failed to perform in
\nany material respect any of its representations, warranties, covenants or other
\nagreements contained in this Agreement, which breach or failure to perform would
\nrender any condition to Buyer’s obligations under Section 7.1 or 7.2 hereof
\nincapable of being satisfied; provided, however, that if such breach or failure
\nto perform is curable by TRW through the exercise of its reasonable best
\nefforts, and for so long as TRW continues to exercise such reasonable best
\nefforts, Buyer may not terminate this Agreement under this Section 8.1(d);
\nprovided, further, that the preceding proviso shall not in any event be deemed
\nto extend the date set forth in Section 8.1(b), or (ii) if a condition under
\nSection 7.1 or 7.2 hereof to Buyer’s obligations hereunder has been rendered
\nincapable of being satisfied; or<\/p>\n
(e) either TRW or Buyer if any court of competent jurisdiction or
\nother competent Governmental Entity shall have issued a statute, rule,
\nregulation, order, decree or injunction or taken any other action permanently
\nrestraining, enjoining or otherwise prohibiting the transactions contemplated by
\nthis Agreement and such statute, rule, regulation, order, decree or injunction
\nor other action shall have become final and non-appealable, unless the failure
\nto consummate the Closing because of such action by a Governmental Entity shall
\nbe due to the failure of the party seeking to terminate this Agreement to have
\nfulfilled any of its obligations under Section 6.3 or Section 6.4.<\/p>\n
Section 8.2 Effect of Termination. In the event of the termination
\nof this Agreement pursuant to Section 8.1 hereof, this Agreement (except for
\nSection 6.2(b), Section 6.6(a), Section 8.4 and Article X) shall forthwith
\nbecome void and have no effect, without any liability on the part of any party
\nhereto or its Affiliates; provided, however, that nothing contained in this
\nSection 8.2 shall relieve any party from liability for any breach of this
\nAgreement.<\/p>\n
Section 8.3 Extension; Waiver. At any time prior to the Closing,
\neach of the parties hereto may (i) extend the time for the performance of any of
\nthe obligations or acts of the other party hereto, (ii) waive any inaccuracies
\nin the representations and warranties of the other party contained herein or in
\nany document delivered pursuant hereto, (iii) waive compliance with any of the
\nagreements of the other party contained herein or (iv) waive any condition to
\nits obligations hereunder. Any agreement on the part of a party hereto to any
\nsuch extension or waiver shall be valid only if set forth in a written
\ninstrument signed on behalf of such party. No failure or delay in exercising any
\nright, power or privilege hereunder will operate as a waiver thereof, nor will
\nany single or partial exercise thereof preclude any other or further exercise of
\nany right, power or privilege hereunder.<\/p>\n
97<\/p>\n
ARTICLE IX<\/p>\n
SURVIVAL; INDEMNIFICATION<\/p>\n
Section 9.1 Survival Periods.<\/p>\n
(a) All representations and warranties of the parties contained in
\nthis Agreement or any certificate or instrument delivered in connection herewith
\nshall survive the Closing for a period of eighteen (18) months immediately
\nfollowing the date of the Closing, except that (i) the representations and
\nwarranties contained in Section 4.16 (Environmental Matters) shall not survive
\nthe Closing, and (ii) the representations and warranties contained in Section
\n4.12 (Taxes) shall survive the Closing for the period of the applicable statute
\nof limitations. The Closing shall not in and of itself constitute a waiver by
\nany party of any rights it may have with respect to any obligations of the other
\nparties hereunder. In the event that an Indemnified Party (as defined below)
\nprovides written notice in accordance with Section 10.1 to the Indemnifying
\nParty (as defined below) within the 18 month period set forth in the first
\nsentence of this Section 9.1(a), and such claim shall not have been finally
\nresolved before the expiration of the applicable period referred to in the first
\nsentence of this Section 9.1(a), any representation, warranty, covenant or
\nagreement that is the basis for such claim shall continue to survive and shall
\nremain a basis for indemnity only as to such specific claim (but as to no other
\nclaim) until such claim is finally resolved. Notwithstanding the foregoing,
\nthere shall be no period of time within which notice of or a claim for indemnity
\nagainst TRW must be provided by Buyer with respect to those items set forth in
\nSection 9.2(a)(iii), (iv) or (v), or a claim for indemnity against Buyer must be
\nprovided by TRW with respect to those items set forth in Section 9.2(b)(iii) or
\n(iv) hereof.<\/p>\n
(b) This Section 9.1 shall not limit any covenant or agreement of
\nthe parties contained in this Agreement or the Ancillary Agreements which by its
\nterms contemplates performance after the Closing, and shall not extend the
\napplicability of any covenant or agreement of the parties contained in this
\nAgreement or the Ancillary Agreements which by its terms solely relates to the
\nperiod between the date hereof and the Closing.<\/p>\n
Section 9.2 Indemnification. Except for all claims related to
\nTaxes (which shall be governed solely by Section 6.10) and subject to the other
\nprovisions of this Article IX, from and after the Closing:<\/p>\n
(a) TRW shall indemnify, defend and hold harmless Buyer and its
\nAffiliates from and against any and all costs and expenses (including reasonable
\nattorney’s fees), suits, proceedings, judgments, settlements, fines, losses,
\nclaims, liabilities, deficiencies, interest, awards, penalties, demands,
\nassessments and damages, (excluding punitive, special, exemplary, consequential,
\nincidental or indirect damages unless payable to a third party and directly
\nattributable to actions of TRW or its Affiliates, but including losses
\nattributable to the loss of profits of the Business that are directly
\nattributable to breaches of this Agreement by TRW or its Affiliates)
\n(collectively, “Damages”) to the extent relating to or arising out of (i) any
\nbreach of any representation<\/p>\n
98<\/p>\n
or warranty made by TRW in this Agreement or the Ancillary Agreements (such
\nDamages determined, except in the case of Section 4.7 (Financial Statements),
\nwithout regard to any materiality or Material Adverse Effect qualification),
\n(ii) breach of or failure to perform any covenant, agreement or undertaking,
\nmade by or on behalf of TRW under this Agreement, required to be taken prior to
\nthe Closing, (iii) breach of or failure to perform any covenant, agreement or
\nundertaking, made by or on behalf of TRW under this Agreement, required to be
\ntaken after the Closing, (iv) any failure of TRW to comply with any applicable
\nbulk sales laws in connection with the transfers hereunder (unless any Damages
\nthereunder arise as a result of Buyer’s failure to satisfy the Assumed
\nLiabilities); or (v) any Excluded Liability; provided, however, that Buyer will
\npay over to TRW any insurance proceeds received in respect of any such Damages
\nto the extent such Damages shall have been paid by TRW pursuant to this Section
\n9.2(a) and such proceeds have not already been applied by Buyer to offset all or
\nany portion of such Damages.<\/p>\n
(b) Buyer shall indemnify and hold harmless TRW and its Affiliates
\nfrom and against any Damages to the extent caused by (i) any breach of any
\nrepresentation or warranty made by Buyer in this Agreement or the Ancillary
\nAgreements, (ii) breach of or the failure to perform any covenant, agreement or
\nundertaking, made by or on behalf of Buyer under this Agreement, required to be
\ntaken prior to the Closing, (iii) breach of or failure to perform any covenant,
\nagreement or undertaking, made by or on behalf of Buyer under this Agreement,
\nrequired to be taken after Closing or (iv) the Assumed Liabilities; provided,
\nhowever, that TRW will pay over to Buyer any insurance proceeds received in
\nrespect of any such Damages to the extent such Damages shall have been paid by
\nBuyer pursuant to this Section 9.2(b) and such proceeds have not already been
\napplied by TRW to offset all or any portion of such Damages.<\/p>\n
(c) For purposes of this Agreement, the term “Indemnified Party”
\nshall mean any party hereto which shall incur or suffer any Damages in respect
\nof which indemnification may be sought pursuant to the terms of this Article IX.
\nFor purposes of this Agreement, Damages shall be calculated after giving effect
\nto any related tax benefit net of any reserves on the Closing Balance Sheet and
\namounts recovered from third parties, including amounts recovered under
\ninsurance policies with respect to such Damages, net of any costs to recover
\nsuch amounts. Any Indemnified Party having a claim under these indemnification
\nprovisions shall make a good faith effort to recover all losses, costs, damages
\nand expenses from insurers of such Indemnified Party under applicable insurance
\npolicies so as to reduce the amount of any Damages hereunder. No Indemnified
\nParty will, in any event, be entitled to any incidental, indirect,
\nconsequential, special, exemplary or punitive damages resulting from or arising
\nout of any claim under this Section 9.2, unless payable to a third party and
\ndirectly attributable to actions of TRW or its Affiliates (it being understood
\nthat damages attributable to the loss of profits of the Business that are
\ndirectly attributable to breaches of this Agreement by TRW or its Affiliates
\nshall be recoverable). Notwithstanding, anything in this Article IX, Section 2.4
\nshall govern all indemnification claims for any and all Environmental
\nLiabilities, Shared Campaign Claims, Pre-Closing Customer Contract Claims, and
\nProduct Liability Claims, and Buyer shall not be entitled to any indemnification
\nclaim for a breach of a representation, warranty or covenant relating to such
\nmatters.<\/p>\n
99<\/p>\n
Section 9.3 Claims. If an Indemnified Party intends to seek
\nindemnification pursuant to this Article IX with respect to third party claims,
\nsuch Indemnified Party shall promptly provide written notice to the party from
\nwhom indemnification is being sought (the “Indemnifying Party”), in writing in
\naccordance with Section 10.1 hereof of such claim describing such claim in
\nreasonable detail including the sections of this Agreement which form the basis
\nfor such claim; copies of all material written evidence thereof and the
\nestimated amount of the Damages that have been or may be sustained by an
\nIndemnified Party; provided that the failure to provide such notice shall not
\naffect the obligations of the Indemnifying Party unless it is actually
\nmaterially prejudiced thereby, subject, however, to the time periods specified
\nin Section 9.1 hereof. In the event that such claim involves a claim by a third
\nparty against the Indemnified Party, the Indemnifying Party shall have twenty
\ndays after receipt of such notice to decide whether it will undertake, conduct
\nand control, through counsel of its own choosing and at its own expense, the
\nsettlement or defense thereof, and if it so decides, the Indemnified Party shall
\ncooperate with the Indemnifying Party in connection with the settlement or
\ndefense of such claim; provided, however, that the Indemnified Party may
\nparticipate in such settlement or defense through counsel chosen by it;
\nprovided, further, that the fees and expenses of such counsel shall be borne by
\nthe Indemnified Party. Notwithstanding anything in this Section 9.3 to the
\ncontrary, the Indemnifying Party may not, without the consent of the Indemnified
\nParty, settle or compromise any action or consent to the entry of any judgment
\nunless such settlement or compromise includes as an unconditional term thereof
\nthe delivery by the claimant or plaintiff to the Indemnified Party of a duly
\nexecuted written release of the Indemnified Party from all liability in respect
\nof such action, which release shall be reasonably satisfactory in form and
\nsubstance to counsel for the Indemnified Party; provided that the Indemnifying
\nParty shall not effect a settlement or compromise without the prior written
\nconsent of the Indemnified Party if such settlement or compromise contains
\ninjunctive, equitable or other provisions that materially affect, the ongoing
\nbusiness of the Indemnified Party. So long as the Indemnifying Party has agreed
\nto undertake, conduct and control the settlement or defense of any such claim
\nand is contesting any such claim in good faith, the Indemnified Party shall not
\npay or settle any such claim without the consent of the Indemnifying Party,
\nwhich consent shall not be unreasonably withheld. If the Indemnifying Party
\nelects not to defend the Indemnified Party against such claim or demand, whether
\nby not giving the Indemnified Party timely notice as provided above or
\notherwise, then the Indemnified Party shall have the right to defend against
\nsuch claim or demand and the portion of any such claim or demand as to which the
\ndefense by the Indemnified Party is unsuccessful (and the reasonable costs and
\nexpenses pertaining to such defense) shall be a liability of the Indemnifying
\nParty hereunder.<\/p>\n
Section 9.4 Limitation of Liability.<\/p>\n
(a) In no event shall TRW be liable for indemnification pursuant
\nto Section 9.2(a)(i) for any claim that is less than $100,000 (the “Minimum
\nClaim Amount”) and in no event shall TRW be liable for indemnification pursuant
\nto Section 9.2(a)(i) unless and until the aggregate of all such claims that
\nexceed the Minimum Claim Amount result in total Damages which are incurred or
\nsuffered by Buyer that exceed five million dollars ($5,000,000) (the
\n“Threshold”), in which case Buyer shall be entitled to<\/p>\n
100<\/p>\n
indemnification for only such Damages that are in excess of the threshold; and
\nprovided, however, that the aggregate liability of TRW pursuant to Section
\n9.2(a)(i) shall not be in excess of an aggregate amount of twenty-five percent
\n(25%) of the Purchase Price (the “Cap”).<\/p>\n
(b) In no event shall Buyer be liable for indemnification pursuant
\nto Section 9.2(b)(i) for any claim that is less than the Minimum Claim Amount
\nand in no event shall Buyer be liable for indemnification pursuant to Section
\n9.2(b)(i) unless and until the aggregate of all such claims exceeding the
\nMinimum Claim Amount result in total Damages which are incurred or suffered by
\nTRW that exceed the Threshold, in which case TRW shall be entitled to
\nindemnification for only such Damages that are in excess of the threshold; and
\nprovided, however, that the aggregate liability of Buyer pursuant to Section
\n9.2(b)(i) shall not be in excess of the Cap.<\/p>\n
Section 9.5 Nature of Remedies. If the Closing shall occur, the
\nremedies set forth in this Article IX shall be the sole and exclusive remedies
\nof, and in lieu of any other remedies that may be available to, the Indemnified
\nParties arising out of or relating to, whether based on contract, tort or other
\nclaims, this Agreement and the Business or any other agreements or documents
\nsigned or executed in relation to the transactions contemplated hereby and
\nthereby by the parties to this Agreement or their Affiliates, except as
\notherwise expressly provided in this Agreement or such other agreements or
\ndocuments.<\/p>\n
ARTICLE X<\/p>\n
MISCELLANEOUS<\/p>\n
Section 10.1 Notices. All notices, requests and other
\ncommunications to any party hereunder shall be in writing (including facsimile
\ntransmission) and shall be given (i) by personal delivery to the appropriate
\naddress as set forth below (or at such other address for the party as shall have
\nbeen previously specified in writing to the other party), (ii) by reliable
\novernight courier service (with confirmation) to the appropriate address as set
\nforth below (or at such other address for the party as shall have been
\npreviously specified in writing to the other party), or (iii) by facsimile
\ntransmission (with confirmation) to the appropriate facsimile number set forth
\nbelow (or at such other facsimile number for the party as shall have been
\npreviously specified in writing to the other party) with follow-up copy by
\nreliable overnight courier service the next Business Day:<\/p>\n
101<\/p>\n
(a) if to Buyer, to:<\/p>\n
Goodrich Corporation
\n Four Coliseum Centre
\n 2730 West Tyvola Road
\n Charlotte, N.C. 28217 USA
\n Attention: Corporate Secretary
\n Telecopy: 704-423-7034 <\/p>\n
and <\/p>\n
(b) if to TRW, to:<\/p>\n
TRW Inc.
\n 1900 Richmond Road
\n Cleveland, OH 44124 USA
\n Attention: Secretary
\n Telecopy: 216-291-7070 <\/p>\n
All such notices, requests and other communications shall be deemed
\nreceived on the date of receipt by the recipient thereof if received prior to 5
\np.m. (New York City time) and such day is a Business Day in the place of
\nreceipt. Otherwise, any such notice, request or communication shall be deemed
\nnot to have been received until the next succeeding Business Day in the place of
\nreceipt.<\/p>\n
Section 10.2 Amendments and Waivers. This Agreement may not be
\nmodified or amended except by an instrument or instruments in writing signed by
\nan authorized officer of each party. Except as otherwise provided in this
\nAgreement, any failure of any of the parties to comply with any obligation,
\ncovenant, agreement or condition herein may be waived by the party entitled to
\nthe benefits thereof only by a written instrument signed by an authorized
\nofficer of the party granting such waiver, but such waiver or failure to insist
\nupon strict compliance with such obligation, covenant, agreement or condition
\nshall not operate as a waiver of, or estoppel with respect to, any subsequent or
\nother failure.<\/p>\n
Section 10.3 Headings. The table of contents and the article,
\nsection, paragraph and other headings contained in this Agreement are inserted
\nfor convenience of reference only and shall not affect in any way the meaning or
\ninterpretation of this Agreement.<\/p>\n
Section 10.4 Counterparts. This Agreement may be executed in two
\nor more counterparts, each of which shall be deemed to be an original, but all
\nof which together shall constitute one and the same agreement.<\/p>\n
Section 10.5 Entire Agreement. This Agreement, the Ancillary
\nAgreements, the TRW Disclosure Letter, the Exhibits hereto, the Schedules
\nhereto, and the Confidentiality Agreement constitute the entire agreement
\nbetween the parties hereto<\/p>\n
102<\/p>\n
with respect to the subject matter hereof, and supersede and cancel all prior
\nagreements, negotiations, correspondence, undertakings, understandings and
\ncommunications of the parties, oral and written, with respect to the subject
\nmatter hereof.<\/p>\n
Section 10.6 Governing Law. THIS AGREEMENT, INCLUDING ALL MATTERS
\nOF CONSTRUCTION, VALIDITY AND PERFORMANCE, SHALL BE GOVERNED BY AND CONSTRUED IN
\nACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
\nOF CONFLICTS OR CHOICE OF LAWS OR ANY OTHER LAW THAT WOULD MAKE THE LAWS OF ANY
\nOTHER JURISDICTION OTHER THAN THE STATE OF NEW YORK APPLICABLE HERETO.<\/p>\n
Section 10.7 Resolution of Disputes. Except for the resolution of
\nmatters as addressed by Sections 2.6 and 6.10 hereof (which shall be resolved in
\naccordance with the procedures set forth in those sections), all other disputes
\narising out of or relating to this Agreement or an Ancillary Agreement or the
\nbreach, termination or validity thereof or the parties’ performance hereunder or
\nthereunder (“Dispute”) shall be resolved as provided by this Section 10.7.<\/p>\n
(a) Mediation.<\/p>\n
(i) If the Dispute has not been resolved by executive
\n officer negotiation within thirty (30) days of the disputing party’s
\n notice requesting negotiation, or if the parties fail to meet within
\n twenty (20) days from delivery of said notice, such Dispute shall be
\n submitted to non-binding mediation in accordance with the then-current
\n Model Procedure for Mediation of Business Disputes of the CPR Institute
\n for Dispute Resolution. The mediation shall be completed within thirty
\n (30) days of the time the mediator is selected. Unless otherwise agreed,
\n the parties will select a mediator from the CPR Panels of Distinguished
\n Neutrals; provided, however, that if no mediator from that list can be
\n mutually agreed upon, each party will submit to the CPR its own list of
\n acceptable mediators from the CPR Panels of Distinguished Neutrals and the
\n CPR shall appoint one of those listed as the mediator for the parties. The
\n costs of the mediation, including the mediator’s fees, shall be borne
\n equally by the parties to the Dispute.<\/p>\n
(ii) By agreeing to mediation, the parties do not intend to
\n deprive any court of its jurisdiction to issue an injunction, attachment
\n or other order in aid of mediation proceedings. The parties agree to
\n participate in good faith in the mediation to its conclusion. If the
\n Dispute has not been resolved by mediation within ninety (90) days of the
\n disputing party’s notice requesting negotiation pursuant to Section
\n 10.7(a)(i), then either party may pursue other available remedies. The
\n parties hereby unconditionally and irrevocably submit to the exclusive
\n jurisdiction of the courts of the State of New York located within the
\n County of New York and of the United States of America located in the<\/p>\n
103<\/p>\n
Southern District of the State of New York for the purpose of any
\n preliminary relief in aid of mediation or in connection with any other
\n action or proceeding arising out of this Agreement or any Ancillary
\n Agreement, and hereby waive any objection to such jurisdiction including
\n without limitation objections by reason of lack of personal jurisdiction,
\n improper venue, or inconvenient forum.<\/p>\n
(b) Notwithstanding anything to the contrary in this
\nAgreement, TRW and Buyer, as parties to the Confidentiality Agreement,
\nacknowledge that their remedies at law for a breach or threatened breach of the
\nConfidentiality Agreement would be inadequate and, in recognition of this fact,
\nupon a breach or threatened breach of the Confidentiality Agreement, either
\nparty to the Confidentiality Agreement, without posting any bond, and in
\naddition to all other remedies which may be available, shall be entitled to
\nimmediately seek or obtain equitable relief in the form of specific performance,
\na temporary restraining order, a temporary or permanent injunction or any other
\nequitable remedy which may then be available.<\/p>\n
Section 10.8 Waiver of Jury Trial. EACH PARTY HERETO HEREBY
\nIRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION,
\nCLAIM, SUIT, LITIGATION OR OTHER PROCEEDING ARISING OUT OF OR RELATED TO THIS
\nAGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.<\/p>\n
Section 10.9 Assignment. This Agreement may not be assigned
\nby any party hereto without the written consent of the other party; provided,
\nhowever, that Buyer may assign this Agreement or any of its rights, remedies and
\nobligations hereunder to one or more of its wholly-owned Subsidiaries without
\nthe consent of TRW; provided, that Buyer guarantees the performance of such
\nSubsidiaries and provided further, that no such assignment shall relieve Buyer
\nof any of its rights and obligations hereunder.<\/p>\n
Section 10.10 Fees and Expenses. Except as otherwise provided
\nin Section 6.6, whether or not the transactions contemplated by this Agreement
\nare consummated, each party shall bear its own fees and expenses incurred in
\nconnection with the transactions contemplated by this Agreement.<\/p>\n
Section 10.11 Binding Nature; Third-Party Beneficiaries. This
\nAgreement shall be binding upon and inure solely to the benefit of the parties
\nhereto and their respective successors (whether by operation of law or
\notherwise) and permitted assigns. Nothing in this Agreement, express or implied,
\nis intended to or shall confer upon any other Person or Persons any rights,
\nbenefits or remedies of any nature whatsoever under or by reason of this
\nAgreement.<\/p>\n
Section 10.12 Severability. This Agreement shall be deemed
\nseverable; the invalidity or unenforceability of any term or provision of this
\nAgreement shall not affect the validity or enforceability of this Agreement or
\nof any other term hereof, which shall remain in full force and effect, for so
\nlong as the economic or legal substance of the transactions contemplated by this
\nAgreement is not affected in any manner materially<\/p>\n
104<\/p>\n
adverse to any party. TRW and Buyer hereby acknowledge and agree that the
\ncovenants set forth in Section 6.16 and Section 6.17 are reasonable in scope and
\nin all other respects. If it is ever held that any restriction hereunder is too
\nbroad to permit enforcement of such restriction to its fullest extent, each
\nparty agrees that such restriction may be enforced to the maximum extent
\npermitted by law, and each party hereby consents and agrees that such scope may
\nbe judicially modified accordingly in any proceeding brought to enforce such
\nrestriction.<\/p>\n
Section 10.13 No Right of Setoff. Neither party hereto nor
\nany Affiliate thereof may deduct from, set off, holdback or otherwise reduce in
\nany manner whatsoever against any amounts such Persons may owe to the other
\nparty hereto or any of its Affiliates any amounts owed by such other party or
\nits Affiliates to the first party or its Affiliates.<\/p>\n
Section 10.14 Currency. All monetary amounts mentioned or
\nreferred to herein are in United States dollars unless otherwise indicated.<\/p>\n
Section 10.15 Specific Performance. The parties hereto agree
\nthat irreparable damage would occur in the event that any provision of this
\nAgreement was not performed in accordance with the terms hereof and that the
\nparties shall be entitled to specific performance of the terms hereof, in
\naddition to any other remedy at law or equity.<\/p>\n
Section 10.16 Construction.<\/p>\n
(a) For the purposes hereof, (i) words in the singular shall
\nbe held to include the plural and vice versa and words of one gender shall be
\nheld to include the other genders as the context requires, (ii) the words
\n“hereof,” “herein,” and “herewith” and words of similar import shall, unless
\notherwise stated, be construed to refer to this Agreement as a whole (including
\nthe TRW Disclosure Letter, the Schedules hereto and the Exhibits hereto) and not
\nto any particular provision of this Agreement, and article, section, paragraph,
\nexhibit and schedule references are to the articles, sections, paragraphs, and
\nexhibits and schedules of this Agreement unless otherwise specified, (iii) the
\nwords “including” and words of similar import when used in this Agreement shall
\nmean “including, without limitation,” unless otherwise specified, (iv) the word
\n“or” shall not be exclusive, (v) Buyer and TRW will be referred to herein
\nindividually as a “party” and collectively as “parties” (except where the
\ncontext otherwise requires), (vi) the phrases “used or held for use primarily in
\nthe Business,” “primarily related to the Business” and “primarily arising from
\nthe conduct of the Business” are to be determined in relation to the business of
\nTRW and its Affiliates collectively and (vii) the phrase “transactions
\ncontemplated by this Agreement” or “transactions contemplated herein” shall
\ninclude the transactions contemplated by the Exhibits and Schedules to this
\nAgreement.<\/p>\n
(b) The parties have participated jointly in the negotiation
\nand drafting of this Agreement. In the event an ambiguity or question of intent
\nor interpretation arises, this Agreement shall be construed as if drafted
\njointly by the parties and no<\/p>\n
105<\/p>\n
presumption or burden of proof shall arise favoring or disfavoring any party by
\nvirtue of the authorship of any provisions of this Agreement.<\/p>\n
(c) Any reference to any federal, state, local or non-U.S. statute
\nor law shall be deemed also to refer to all rules and regulations promulgated
\nthereunder, unless the context otherwise requires.<\/p>\n
106<\/p>\n
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
\nto be executed as of the date first written above by their respective officers
\nthereunto duly authorized.<\/p>\n
TRW INC.<\/p>\n
By:
\n ———————————
\n Name:
\n Title:<\/p>\n
GOODRICH CORPORATION<\/p>\n
By:
\n ———————————
\n Name:
\n Title:<\/p>\n
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