FIRST AMENDMENT TO
PURCHASE AGREEMENT
FIRST AMENDMENT TO PURCHASE AGREEMENT (this "AMENDMENT") dated as of
July 2, 2000, between ▇▇▇▇▇▇ & ▇▇▇▇▇ CORPORATION, a Tennessee corporation
("SELLER"), and TYCO GROUP S.A.R.L., a Luxembourg corporation ("Buyer").
W I T N E S S E T H:
WHEREAS, Buyer and Seller have entered into a Purchase Agreement, dated
as of May 7, 2000 (the "PURCHASE AGREEMENT"); and
WHEREAS, the parties hereto wish to amend the Purchase Agreement and to
amend the Disclosure Schedules relating to the Purchase Agreement as set forth
below.
NOW, THEREFORE, IT IS AGREED:
1. AMENDMENTS. The Purchase Agreement is hereby amended as
follows:
(a) Section 1.01 of the Purchase Agreement is hereby amended
by inserting the following directly after the definition of "Foreign
Acquired Subsidiaries":
""HOLDBACK AMOUNT" shall mean $50,000,000."
(b) Section 2.07 of the Purchase Agreement is hereby amended
by deleting Section 2.07(a)(i) in its entirety and inserting in lieu
thereof the following:
"(i) Buyer shall deliver $750,000,000, less
(1) any third-party indebtedness for borrowed money
and any pre-payment penalties relating thereto of any
Acquired Subsidiary outstanding as of the Closing
Date, less (2) the Holdback Amount. Buyer shall
deliver such amount in immediately available funds by
wire transfer to an account or accounts designated by
Seller, by notice to Buyer, not later than two
business days prior to the Closing Date."
(c) Section 2.09 of the Purchase Agreement is hereby amended
by deleting Section 2.09(c) in its entirety and inserting in lieu
thereof the following:
"Any payment pursuant to Section 2.09(a) or 2.09(b)
shall be made in accordance with the provisions of
Section 2.10(c) hereof and at a mutually convenient
time and place within 10 days after Final Working
Capital and Final Long-Term Tangible Assets have been
determined pursuant to this Section 2.09 (the date of
such payment, the "FINAL SETTLEMENT DATE"). The
amount of any payment to be made pursuant to this
Section 2.09 shall bear interest from and including
the Closing Date to but excluding the date of payment
at a rate per annum equal to 6.5% (the "CALCULATION
RATE"). Such interest shall be payable at the same
time as the payment to which it relates and shall be
calculated daily on the basis of a year of 365 days
and the actual number of days elapsed (the
"CALCULATION METHOD"). The aggregate payment required
to be made under this Section 2.09(c), if any, is
referred to as the "PURCHASE PRICE ADJUSTMENT
Payment"."
(d) Article 2 of the Purchase Agreement is hereby amended by
inserting the following section immediately following the final
sentence of Section 2.09:
2.10. SUBSEQUENT CLOSINGS; SETTLEMENT OF HOLDBACK
AND PURCHASE PRICE ADJUSTMENT. (a) [Intentionally
deleted]
(b) At the Subsequent Closing relating to ▇▇▇▇▇▇ &
▇▇▇▇▇ Hungary Kft. (the "HUNGARY CLOSING"), Buyer
shall pay to Seller in immediately available funds,
by wire transfer to an account designated by Seller,
an amount equal to $15,000,000 (the "HUNGARY PURCHASE
PRICE PAYMENT") plus interest on such amount from and
including the Closing Date to but excluding the date
of payment at the Calculation Rate and based on the
Calculation Method. At the Subsequent Closing
relating to ▇▇▇▇▇▇ & ▇▇▇▇▇ Monterrey, ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ & ▇▇▇▇▇ de Mexico (the "MEXICO
CLOSING"), Buyer shall pay to Seller in immediately
available funds, by wire transfer to an account
designated by Seller, an amount equal to $735,000
(the "MEXICO PURCHASE PRICE PAYMENT") plus
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interest on such amount from and including the
Closing Date to but excluding the date of payment at
the Calculation Rate and based on the Calculation
Method. Notwithstanding the foregoing, (i) if the
Hungary Closing occurs after the Mexico Closing, then
the Hungary Purchase Price Payment shall be reduced
by $735,000, (ii) if the Mexico Closing occurs after
the Hungary Closing, then the Mexico Purchase Price
Payment shall be reduced by $735,000, and (iii) if
the Mexico Closing and the Hungary Closing occur
simultaneously, then the aggregate of the Mexico
Purchase Price Payment and the Hungary Purchase Price
Payment shall not exceed $15,000,000; PROVIDED, that
in no case shall such reduction affect the purchase
price allocation as agreed between the parties.
(c) In the event that a payment is required to be
made by Seller to Buyer pursuant to Section 2.09(c)
hereof:
(i) if (x) the Purchase Price Adjustment Payment
exceeds (y) the sum of $35,000,000 plus interest on
such amount from and including the Closing Date to
but excluding the Final Settlement Date at the
Calculation Rate and based on the Calculation Method,
then Seller shall pay to Buyer the difference
thereof; and
(ii) if (x) the Purchase Price Adjustment Payment is
less than (y) the sum of $35,000,000 plus interest on
such amount from and including the Closing Date to
but excluding the Final Settlement Date at the
Calculation Rate and based on the Calculation Method,
Buyer shall pay to Seller the difference,
in each case, by wire transfer of immediately
available funds and in full satisfaction of Seller's
obligation under 2.09(c).
(d) In the event that no payment is required by
Seller to Buyer pursuant to Section 2.09(c) hereof,
Buyer shall pay to Seller the sum of $35,000,000 plus
interest on such amount from and including the
Closing Date to but excluding the date of payment, at
the Calculation Rate and based on the Calculation
Method by wire transfer of immediately available
funds to an account designated by Seller. Such
payment shall be made within 10 days after
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Final Working Capital and Final Long-Term Tangible
Assets have been determined pursuant to Section
2.10(b).
(e) Article 7 of the Purchase Agreement is hereby amended by
inserting the following section immediately following the last sentence
of Section 7.08.
"Section 7.09. SUPPLY AGREEMENT. After the Closing,
Seller and Buyer shall negotiate in good faith and
use their reasonable best efforts to enter into a
supply agreement, pursuant to which Purchaser and its
Affiliates will supply to Seller and its Affiliates
the products manufactured by the Business under
Product Line 080 (as described in Annex F)."
(f) Article 7 of the Purchase Agreement is hereby further
amended by inserting the following section immediately following the
last sentence of Section 7.09.
"Section 7.10. GUARANTIES AND SIMILAR INSTRUMENTS.
Following the Closing, Buyer will use its reasonable
best efforts to cause itself or one of its Affiliates
to be substituted in all respects for Seller or its
Affiliates in respect of all obligations of Seller
and its Affiliates under all guaranties, letters of
credit, bid bonds, performance and other similar
bonds obtained by Seller or any of its Affiliates for
the benefit of any Acquired Subsidiary, including,
without limitation, such instruments set forth on
Schedule 7.10 hereto. If Buyer is unable to effect
such a substitution, it will use its reasonable best
efforts to obtain and have issued replacements for
each such guaranty, letter of credit, bid bond,
performance or other similar bond, each of which
shall be substantially similar to that being so
replaced and to obtain any amendments, novations,
releases, waivers, consents or approvals necessary to
release Seller and its Affiliates. Buyer agrees to
indemnify and hold harmless Seller and its Affiliates
from any and all damage, loss, liability and expense
(including, without limitation, reasonable attorneys'
fees and expenses) arising subsequent to the Closing
Date under all such guaranties, letters of credit,
bid bonds, performance and other similar
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bonds until all such guaranties, letters of credit
and bonds have been replaced and all obligations
thereunder have been released. Seller will furnish to
Buyer such information with respect to such
guaranties, letters of credit, bid bonds, performance
and other similar bonds as Buyer may require in order
to fulfill its obligations under this Section 7.10."
(g) Section 9.01(b) of the Purchase Agreement is hereby
further amended by deleting the words "Seller or any Acquired
Subsidiary" from the third sentence thereof and inserting in lieu
thereof "Seller or any Affiliate of Seller".
(h) Section 9.02 of the Purchase Agreement is hereby amended
by deleting Section 9.02(a) in its entirety and inserting the following
section in lieu thereof:
Section 9.02 SELLER PLANS. (a) Except as expressly
set forth herein, Seller or its designated Affiliates
shall retain or reimburse Buyer for all liabilities
and obligations (including any underfunding of
defined benefit plans as of the Closing Date) in
respect of benefits accrued under all benefit plans
or arrangements maintained, administered or
contributed to by Seller or its Affiliates, including
the Employee Plans and International Plans, in
respect of each Transferred Employee, employee, or
former employee (including any beneficiary thereof).
Except as expressly set forth herein, no assets of
any benefit plans or arrangements maintained,
administered or contributed to by Seller or any
Affiliate thereof, including any Employee Plan or
International Plan, shall be transferred to Buyer or
any of its Affiliates or to any plan of Buyer or any
of its Affiliates; PROVIDED, that Seller shall not
retain, and Buyer shall assume, any and all
obligations and liabilities with respect to benefits
accrued by Transferred Employees during the
transitional services period as provided for in Annex
J; and PROVIDED FURTHER, that in the case of any
Employee Plan or International Plan maintained by an
Acquired Subsidiary (an "ACQUIRED SUBSIDIARY PLAN")
and pursuant to which such Acquired Subsidiary (or
any other Affiliate of Buyer) will retain any
pre-closing liabilities after the Closing Date, any
assets maintained in connection with such liabilities
by
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such Acquired Subsidiary (or in a trust or similar
entity established by such Acquired Subsidiary)
immediately prior to the Closing Date shall continue
to be maintained by such Acquired Subsidiary or
entity after the Closing Date. Benefit accruals in
respect of Transferred Employees under any Employee
Plan or International Plan other than an Acquired
Subsidiary Plan shall cease at the later of the
Closing Date or end of the transitional period as
provided for in Annex J. Seller and Buyer agree that,
except where alternative arrangements have been
specifically agreed in writing between Buyer and
Seller, all liabilities of Acquired Subsidiaries
under existing Acquired Subsidiary Plans providing
for retirement, deferred compensation or similar
benefits (an "ACQUIRED SUBSIDIARY RETIREMENT PLAN")
shall be retained by the applicable Acquired
Subsidiary following the Closing. Following the
Closing, Seller and Buyer shall use their best
efforts, and shall cause their respective actuaries
to cooperate, to agree on the actuarial present value
of the unfunded liabilities that are retained by
Acquired Subsidiaries under each Acquired Subsidiary
Retirement Plan pursuant to FASB 87 as of the Closing
Date (such present value with respect to each such
Plan, the "PRE-CLOSING ACQUIRED SUBSIDIARY PLAN
OBLIGATION" with respect to such Plan). If during the
90-day period following the Closing Date (or, in the
case of Acquired Subsidiary Retirement Plans for
which plan documents were not made available to Buyer
or one of its Affiliates prior to the Closing Date,
within the 90-day period following the discovery
thereof), Seller and Buyer are unable to agree on the
Pre-Closing Acquired Subsidiary Plan Obligation with
respect to any Acquired Subsidiary Retirement Plan,
they shall promptly refer the matter to a mutually
acceptable, internationally recognized actuarial firm
with no material relationship with Buyer, Seller or
their Affiliates (the "ACTUARIAL REFEREE"). The
parties shall instruct the Actuarial Referee to
determine the Pre-Closing Acquired Subsidiary Plan
Obligation with respect to such Plan as promptly as
practicable, and such determination shall be final
and binding upon Seller and Buyer. The costs of the
review by the Actuarial Referee shall be borne
equally by Seller and Buyer. "FINAL PRE-CLOSING
ACQUIRED SUBSIDIARY PLAN OBLIGATION" with respect to
any Acquired Subsidiary Retirement Plan shall
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mean (i) the Pre-Closing Acquired Subsidiary Plan
Obligation with respect to such Plan as mutually
agreed between Buyer and Seller or, (ii) in the event
such matter is submitted to the Actuarial Referee,
the Pre-Closing Acquired Subsidiary Plan Obligation
with respect to such Plan as determined by the
Actuarial Referee. Within 10 days after the Final
Pre-Closing Acquired Subsidiary Plan Obligation with
respect to any Acquired Subsidiary Retirement Plan
has been determined, Seller shall pay to Buyer an
amount equal to the Final Pre-Closing Acquired
Subsidiary Plan Obligation with respect to such Plan,
together with interest on such amount from and
including the Closing Date to but excluding the date
of payment, at the Calculation Rate and based on the
Calculation Method. All liabilities with respect to
benefits under the Acquired Subsidiary Retirement
Plans as of and after the Closing Date shall be
Assumed Liabilities. All health care and dependant
care flexible spending accounts maintained with
respect to Transferred Employees under the Seller's
cafeteria plan shall be transferred to the Buyer or
one of its Affiliates.
(i) Article 9 of the Purchase Agreement is hereby further
amended by inserting the following section immediately following the
last sentence of Section 9.05:
SECTION 9.06. CANADIAN EMPLOYEES. Notwithstanding
anything in this Agreement to contrary, (i) for
purposes of this Agreement, "Business Employees"
shall include the nine Canadian employees of ▇▇▇▇▇▇ &
▇▇▇▇▇ Ltd. previously identified by Seller to Buyer
or an Affiliate of Buyer (such employees, the
"CANADIAN EMPLOYEES"), and (ii) for purposes of this
Agreement, the term "Business Employee" as used in
the definition of "International Plan" shall also be
understood to include the Canadian Employees.
(j) Article 10 of the Purchase Agreement is hereby amended by
deleting Section 10.01(b) in its entirety and inserting in lieu thereof
the following:
Notwithstanding the foregoing, in the event that all
of the conditions set forth in this Article 10 are
satisfied with
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respect to the Key Countries and the condition set
forth in Section 10.02(d) is satisfied, but such
conditions (except for the condition set forth in
Section 10.02(d)) are not satisfied with respect to
one or more other jurisdictions, Seller and Buyer
agree to consummate the Closing with respect to those
assets and liabilities of the Business for which (1)
all required approvals and consents described in
Section 10.01(a) have been obtained, or (2) no
approvals or consents are required (a "PRIMARY
CLOSING"). The closing or closings with respect to
the Purchased Assets and Assumed Liabilities not
transferred, assigned, purchased and accepted at the
Primary Closing (each, a "SUBSEQUENT CLOSING") shall
occur as promptly as practical after receipt of the
remaining approvals and consents referred to in
Section 10.01(a). From the Primary Closing, the
entirety of the Business shall be operated for the
benefit and detriment of Buyer.
(k) Article 13 of the Purchase Agreement is hereby amended by
inserting the following section immediately following the last sentence
of Section 13.12:
"SECTION 13.13. REPRESENTATIONS AND WARRANTIES;
INTERPRETATION. Seller and Buyer acknowledge and
agree that all representations and warranties with
respect to the subject matter of this Agreement are
contained in this Agreement, and that no
representations or warranties, express or implied,
are made by either party or their respective
Affiliates in any other document or instrument that
is delivered to effect the transactions contemplated
by this Agreement. All documents and instruments
delivered pursuant to this Agreement and shall be
construed consistently with this Agreement. In the
event of any inconsistencies, the terms of this
Agreement shall control."
(l) Annex A to the Purchase Agreement is hereby amended by
deleting Item 1 thereof in its entirety and inserting in lieu thereof
the following:
"1. Seller will contribute certain U.S. assets
primarily related to the Business to ▇▇▇▇▇, Inc. The
parties will mutually agree in good faith on steps to
the Reorganization regarding contributions before
such contributions are made.
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All other U.S. assets primarily related to the
Business will be transferred directly by Seller or an
Affiliate of Seller to Buyer or a Buyer Designee at
the Closing.
(m) Annex A to the Purchase Agreement is hereby further
amended by deleting Item 3 thereof in its entirety and inserting in
lieu thereof the following:
3. Seller will move external debt (except as
otherwise agreed between Seller and Buyer) and cash,
cash equivalents, marketable securities and similar
investments out of Acquired Subsidiaries; PROVIDED
that Seller may leave up to $5,000,000 in the
aggregate of cash in the Acquired Subsidiaries at
Closing; and PROVIDED FURTHER, that if more than
$5,000,000 in the aggregate of cash is left in the
Acquired Subsidiaries at Closing, Seller shall
indemnify Buyer and its Affiliates for any costs,
including, without limitation, Taxes in repatriating
such amount of cash in excess of $5,000,000. For each
Acquired Subsidiary, Seller shall settle or write off
all intercompany loans, intercompany payables and
intercompany receivables of each Acquired Subsidiary
effective as of or prior to the Closing Date.
(n) Annex B to the Purchase Agreement is hereby amended by:
(i) deleting Item 7 of Annex B in its entirety and
inserting in lieu thereof the following:
"7. Certain assets (trade receivables and inventory)
of T&B Ltd. (Canada) from the product lines listed in
Annex F. These assets will be contributed to ▇▇▇▇▇▇ &
▇▇▇▇▇ Photon Systems Inc., a Canadian subsidiary of
Seller, and the shares of such subsidiary will be
sold to Buyer or a Buyer Designee."
(ii) inserting the following immediately following
Item 10 of Annex B:
"10. All accounts payable and property, plant and
equipment with respect to the Bluffton, SC sales
office, if any, and the Grapevine, TX and Carlsbad,
CA sales offices and the Irvine, CA sales office.
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11. Inventory relating to the product lines listed in
Annex F owned by ▇▇▇▇▇▇ & ▇▇▇▇▇ Pty. Ltd., an
Australian subsidiary of Seller.
12. Property, plant and equipment, inventory,
accounts payable and certain other assets of T&B
Corporation relating to the Business with respect to
the Irvine, CA, Inman, SC, Romeoville, IL, Downers
Grove, IL, ▇▇▇▇▇▇▇▇, IL, and Brooksville, FL
facilities and ▇▇▇▇▇▇ & ▇▇▇▇▇ Corporation's
headquarters in Memphis, TN.
(o) Schedule 3.03 to the Purchase Agreement is hereby amended
by deleting Schedule 3.03 in its entirety and substituting in lieu
thereof a new Schedule 3.03 in the form attached to this Amendment as
Schedule 3.03.
(p) Schedule 3.06(b) to the Purchase Agreement is hereby
amended by deleting Schedule 3.06(b) in its entirety and substituting
in lieu thereof a new Schedule 3.06(b) in the form attached to this
Amendment as Schedule 3.06(b).
(q) Schedule 3.10 to the Purchase Agreement is hereby amended
by deleting Schedule 3.10 in its entirety and substituting in lieu
thereof a new Schedule 3.10 in the form attached to this Amendment as
Schedule 3.10.
(r) Schedule 3.11 to the Purchase Agreement is hereby amended
by deleting Schedule 3.11 in its entirety and substituting in lieu
thereof a new Schedule 3.11 in the form attached to this Amendment as
Schedule 3.11.
(s) Schedule 3.14(b) to the Purchase Agreement is hereby
amended by deleting Schedule 3.14(b) in its entirety and substituting
in lieu thereof a new Schedule 3.14(b) in the form attached to this
Amendment as Schedule 3.14(b).
(t) Schedule 3.19 to the Purchase Agreement is hereby amended
by deleting Schedule 3.19 in its entirety and substituting in lieu
thereof a new Schedule 3.19 in the form attached to this Amendment as
Schedule 3.19.
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(u) The Schedules to the Purchase Agreement are hereby amended
by inserting immediately after Schedule 5.01 thereof a new Schedule
7.10 in the form attached to this Amendment as Schedule 7.10.
2. DEFINED TERMS. Defined terms used herein but not otherwise defined
herein shall have the meanings specified in the Purchase Agreement.
3. CAPTIONS. The captions in this Amendment
are included for convenience of reference only and shall be ignored in the
construction or interpretation of the provisions of this Amendment.
4. COUNTERPARTS; EFFECTIVENESS. This
Amendment may be signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument. This Amendment shall become effective when
each party to this Amendment shall have received a counterpart hereof signed
by the other party hereto.
5. GOVERNING LAW. This Amendment shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
conflicts of law rules of such state.
6. AGREEMENT AS AMENDED. This Amendment is limited as specified and
shall not constitute a modification, acceptance or waiver of any other provision
of the Purchase Agreement. From and after the date hereof, all references to the
Purchase Agreement shall be deemed references to the Purchase Agreement as
amended and supplemented hereby.
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IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed in their respective corporate names by their respective officers, each
of whom is duly and validly authorized and empowered, all as of the day and year
first written above.
▇▇▇▇▇▇ & ▇▇▇▇▇ CORPORATION
By: ____________________________
Name:
Title:
TYCO GROUP S.A.R.L.
By: ____________________________
Name:
Title:
