Stock Purchase Agreement (2006)Full Document 

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STOCK PURCHASE AGREEMENT

BY AND AMONG

SENSATA TECHNOLOGIES, INC.,

FIRST TECHNOLOGY LIMITED,

AND

HONEYWELL INTERNATIONAL INC.

November 3, 2006


EXECUTION COPY

Table of Contents

 

          Page
ARTICLE I PURCHASE AND SALE OF SHARES AND IP ASSETS    1
        1.1    Purchase and Sale of Shares and IP Assets    1
        1.2    Purchase Price    2
ARTICLE II CLOSING; CLOSING DELIVERIES    2
        2.1    Closing Date    2
        2.2    Closing Deliveries    2
        2.3    Working Capital Adjustment    3
        2.4    Adjustment of Purchase Price Allocation    5
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLERS    6
        3.1    Corporate Status    6
        3.2    Authority    6
        3.3    No Conflict; Government Authorizations    7
        3.4    Capitalization    8
        3.5    Financial Statements.    8
        3.6    Absence of Certain Changes; Undisclosed Liabilities.    9
        3.7    Taxes    11
        3.8    Intellectual Property    14
        3.9    Legal Proceedings    15
        3.10    Compliance with Laws; Permits    16
        3.11    Environmental Matters    16
        3.12    Employee Matters and Benefit Plans    17
        3.13    Material Contracts    20
        3.14    Material Customers and Suppliers    21
        3.15    Real Properties    22
        3.16    Personal Properties    22
        3.17    Sufficiency of Assets    22
        3.18    Labor    23
        3.19    Insurance    23
        3.20    Finder's Fee    24
        3.21    Bank Accounts; Directors and Officers    24
        3.22    Disclaimer of Other Representations and Warranties    24
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER    24
        4.1    Corporate Status    24
        4.2    Authority    24
        4.3    No Conflict; Required Filings    25
        4.4    Legal Proceedings    25
        4.5    Sufficient Funds    25

 


        4.6    Investment Intent    26
        4.7    No Reliance    26
        4.8    Finder's Fee    28
        4.9    Disclaimer of Other Representations and Warranties    28
ARTICLE V COVENANTS    28
        5.1    Interim Operations of the Companies    28
        5.2    Filings with Governmental Authorities.    30
        5.3    Consents    32
        5.4    Confidentiality; Access to Information    32
        5.5    Publicity    33
        5.6    Books and Records    33
        5.7    Further Action    34
        5.8    Expenses    34
        5.9    Notification of Certain Matters    35
        5.10    Employees and Employee Benefit Plans    35
        5.11    Indebtedness; Intercompany Accounts    39
        5.12    Insurance Matters    40
        5.13    Non-Solicitation of Employees    41
        5.14    Non-Competition    41
        5.15    Business Confidential Information    43
        5.16    Waiver of Conflicts and Attorney-Client Privilege    44
        5.17    Closing Cash Balance    45
        5.18    Sellers' Marks    45
        5.19    The Settlement Agreement    45
        5.20    Dealing with and Voting on English Shares    46
        5.21    Assigned Intellectual Property    46
        5.22    Exclusivity    47
        5.23    Credit Facility    47
        5.24    Certain Payments    48
        5.25    Access    48
        5.26    Continuation of Transition Services    49
        5.27    Listed Patents; Other Assigned Intellectual Property    49
ARTICLE VI CLOSING CONDITIONS    50
        6.1    Conditions to Obligations of Sellers and Purchaser    50
        6.2    Additional Conditions to Obligations of Purchaser    50
        6.3    Additional Conditions to Obligations of Sellers    51
ARTICLE VII CERTAIN TAX MATTERS    52
        7.1    Tax Returns    52
        7.2    Cooperation on Tax Matters; Contests    51
        7.3    Tax Sharing Agreements    54
        7.4    Tax Indemnifications    54
        7.5    Certain Taxes    56

 

iii


ARTICLE VIII TERMINATION    56
        8.1    Termination    56
        8.2    Effect of Termination and Abandonment    56
ARTICLE IX SURVIVAL; INDEMNIFICATION    57
        9.1    Survival of Representations, Warranties and Agreements    57
        9.2    Indemnification    57
        9.3    Indemnification Procedures    58
        9.4    Indemnification Limitations    60
ARTICLE X MISCELLANEOUS    63
        10.1    Notices    63
        10.2    Certain Definitions; Interpretation    64
        10.3    Severability    70
        10.4    Entire Agreement; No Third-Party Beneficiaries    71
        10.5    Amendment; Waiver    71
        10.6    Binding Effect; Assignment    71
        10.7    Disclosure Schedule    71
        10.8    Governing Law    71
        10.9    Dispute Resolution; Mediation; Jurisdiction    72
        10.10    Construction; Interpretation    73
        10.11    Counterparts    73

 

iv


Index of Defined Terms

 

Term

   Page

Affiliate

   63

Affiliated Group

   63

Agreement

   Preamble

Ancillary Agreements

   6

Assigned Intellectual Property

   64

Business Confidential Information

   43

Business Material Adverse Effect

   64

Cap

   60

CDI 401(k) Plan

   38

Closing

   2

Closing Date

   2

Code

   64

Collateral Source

   60

Companies

   Recitals

Company Plan

   18

Company Plans

   18

Competing Business

   42

Confidentiality Agreement

   32

Contract

   64

control

   65

Credit Facility

   26

Current Representation

   44

D&O Policy(ies)

   41

De Minimis Loss

   60

Delphi Claim

   65

Disclosure Schedule

   6

Dispute

   71

Disputed Amount

   4

DOJ

   65

Employee Members

   38

Employees

   35

Encumbrances

   22

English Shares

   46

Environmental Claims

   17

Environmental Laws

   17

ERISA

   65

ERISA Group Liabilities

   19

Excluded Representations

   60

Final FTCP Net Working Capital

   3

Foreign Plan

   19

FT

   Preamble

FT Automotive SERP

   36

 

v


FT SERP

   36

FTC

   65

FTCP Business

   65

FTCP Financial Statements

   9

FTCP Interim Financial Statements

   9

FTCP Interim Income Statement

   8

FTCP Interim Statement of Net Assets

   8

FTCP L/Cs

   40

FTCP Net Working Capital

   65

FTCP Preliminary Working Capital Statement

   3

FTCP Specified Accounting Policies

   65

FTCP Year-End Financial Statements

   8

Governmental Authority

   65

Governmental Order

   66

Honeywell

   Preamble

Honeywell L/Cs

   39

HSR Act

   7

Indebtedness

   66

Indemnified Party

   57

Indemnifying Party

   57

Independent Accounting Firm

   66

Intellectual Property

   15

Intellectual Property Assignment

   66

Key Customers

   21

Key Suppliers

   21

knowledge

   66

Labor Laws

   23

Law

   66

Leased Real Property

   22

Liability

   66

License Opportunity

   67

Liens

   22

Losses

   67

Made Available

   67

Management

   61

Material Contract

   21

Materials of Environmental Concern

   17

Mediation Request

   71

Non-US Employees

   37

Occurrence Policies

   40

Other Competition Authorities

   30

Other Competition Filings

   30

Other Competition Law

   30

Owned Real Property

   22

Permit

   67

Permitted Encumbrances

   67

 

vi


Person

   68

Post-closing Representation

   44

Preliminary FTCP Net Working Capital

   3

Procedure

   71

Property

   22

Purchase Price

   2

Purchased Entities

   12

Purchaser

   Preamble

Purchaser Environmental Liability

   61

Purchaser Indemnified Parties

   56

Purchaser Material Adverse Effect

   68

Reorganization

   68

Run-Off Coverage

   41

Seller

   Preamble

Seller Indemnified Parties

   57

Sellers

   1

Sellers' Marks

   45

Seller's UK DB Scheme

   38

Seller's UK DC Scheme

   38

Settlement Agreement

   68

Settlement Opportunity

   68

Shares

   Recitals

Shelby Business

   68

Solvent

   26

Statutory Sellers

   Recitals

Straddle Period

   53

Subsidiary

   69

Sufficient Payment Resources

   26

Survival Period

   56

Swaps

   30

Tangible Property

   22

Targeted FTCP Net Working Capital

   69

Tax Return

   69

Taxes

   69

Taxing Authority

   69

Third-Party Claim

   57

Threshold Amount

   60

Trademark License Agreement

   50

Transaction Matters

   70

UK Plans

   38

US Employees

   35

Voluntary Environmental Investigation

   61

WARN Act

   10

 

vii


Index of Exhibits

Exhibit A Companies and Subsidiaries

Exhibit B Trademark License Agreement

Exhibit C Intellectual Property Assignment

Exhibit D Purchase Price Allocation Schedule

 

viii


STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (this “Agreement”) is made this 3rd day of November, 2006, by and among Sensata Technologies, Inc., a Delaware corporation (“Purchaser”), First Technology Limited, a United Kingdom corporation and an indirect wholly owned Subsidiary of Honeywell formerly known as First Technology plc (“FT”), and Honeywell International Inc., a Delaware corporation (“Honeywell”). Each of FT and Honeywell is referred to herein as a “Seller” and, collectively, as the “Sellers.”

WHEREAS, the Sellers intend prior to the Closing to consummate the Reorganization;

WHEREAS, as a result of the consummation of the Reorganization, the Sellers will own at the Closing all of the issued and outstanding shares of capital stock (the “Shares”) of the Companies listed on Exhibit A hereto (the “Companies”) and, indirectly, the Subsidiaries listed on Exhibit A hereto, other than, in the case of FT Dominicana Holdings S.A., a nominal number of shares held by residents of the Dominican Republic (such Persons, collectively, the “Statutory Sellers”) as required pursuant to local law, and which will be transferred concurrently with the transfer of the Shares hereunder;

WHEREAS, the Companies, together with their divisions and Subsidiaries, own or hold the assets, rights, obligations and liabilities comprising the FTCP Business;

WHEREAS, upon the terms and subject to the conditions contained in this Agreement, Purchaser desires to acquire from the applicable Seller the applicable Shares, and the applicable Seller desires to sell to Purchaser the applicable Shares; and

WHEREAS, upon the terms and subject to the conditions contained in this Agreement, Purchaser desires to acquire from FT the Assigned Intellectual Property and FT desires to sell to Purchaser the Assigned Intellectual Property.

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE I

PURCHASE AND SALE OF SHARES AND IP ASSETS

1.1 Purchase and Sale of Shares and IP Assets. Subject to the terms and conditions of this Agreement, at the Closing (as defined below), in exchange for a payment by Purchaser to Honeywell (as agent for the Sellers) of an aggregate cash amount equal to the Purchase Price (i) Honeywell shall cause each Seller and the Statutory Sellers, as appropriate, and each Seller and the Statutory Sellers, as appropriate, shall, sell, assign, transfer, convey and deliver to Purchaser the Shares free and clear of


all Encumbrances, and (ii) Honeywell shall cause FT, and FT shall, sell, assign, transfer, convey and deliver to Purchaser, the Assigned Intellectual Property in accordance with the terms of the Intellectual Property Assignment and this Agreement (including Section 5.21).

1.2 Purchase Price. The aggregate purchase price to be paid for the Shares and the Assigned Intellectual Property acquired by Purchaser pursuant to this Agreement shall be ninety million Dollars ($90,000,000) in cash, subject to adjustment pursuant to Section 2.3 (the “Purchase Price”). The Purchase Price shall be allocated in accordance with the Purchase Price Allocation Schedule attached hereto as Exhibit D, subject to adjustment pursuant to Section 2.4, and no party shall take a position inconsistent with such allocation on any Tax Return (unless otherwise required by a final, nonappealable determination of a court of competent jurisdiction or a binding closing agreement entered into with a Taxing Authority). The parties agree that, subject to any change mutually agreed in good faith by the parties after the date hereof, Honeywell values each of the License Opportunity and the Settlement Opportunity as set forth in Exhibit D. At the Closing, Purchaser shall deliver the Purchase Price to Honeywell, as agent for the Sellers, by wire transfer of immediately available funds pursuant to the wire transfer instructions provided by Honeywell in writing no later than three (3) days prior to the Closing Date.

ARTICLE II

CLOSING; CLOSING DELIVERIES

2.1 Closing Date. The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at 10:00 a.m., local time, at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 4 Times Square, New York, New York, two (2) business days following satisfaction or waiver of all conditions to Closing set forth in Article VII (other than those conditions that by their nature have to be satisfied at Closing (but subject to the satisfaction or waiver of those conditions)), or at such other place and time as the parties may agree; provided that (a) the Purchaser, in connection with its debt financing, or (b) Honeywell and the Sellers, in connection with the Reorganization, may elect to defer the date of the Closing by up to 15 business days, so long as such exercise to defer is made by Purchaser, or Honeywell and Sellers, as the case may be, no later than 45 calendar days from the date hereof; provided, however, that in no event will a party have the right to defer the Closing beyond December 27, 2006. The date on which the Closing occurs is referred to herein as the “Closing Date.”

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