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Title: |
Agreement and Plan of Reorganization |
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Entities: |
Banc One Capital Markets, Inc.; Flextronics International Ltd. |
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Date: |
2000 |
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Preview shows 62KB of 398KB total |
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$99 |
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#1221876 |
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AGREEMENT AND PLAN OF REORGANIZATION
AMONG
FLEXTRONICS INTERNATIONAL LTD.,
LIGHTNING METAL ACQUISITION CORP.,
COATING ACQUISITION CORP.,
LIGHTNING TOOL ACQUISITION CORP.,
LIGHTNING METAL SPECIALTIES, INCORPORATED,
COATING TECHNOLOGIES, INC.,
LIGHTNING TOOL AND DESIGN, INC.,
LIGHTNING METAL SPECIALTIES E.M.F., LTD.,
LIGHTNING MANUFACTURING SOLUTIONS-EUROPE, LTD.,
LIGHTNING MANUFACTURING SOLUTIONS TEXAS, L.L.C.,
LIGHTNING LOGISTICS, L.L.C.,
PAPASON, L.L.C.,
200 SCOTT STREET, L.L.C.,
80 SCOTT STREET, L.L.C.,
230 SCOTT STREET, L.L.C.,
1350 LIVELY BLVD, L.L.C.,
D.A.D. PARTNERSHIP,
S.O.N. PARTNERSHIP,
S.O.N. II PARTNERSHIP
AND
SHAREHOLDERS, MEMBERS AND PARTNERS OF THE COMPANIES
DATED AS OF
AUGUST 31, 2000
<PAGE> 2
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (this "Agreement") is entered
into as of August 31, 2000 by and among Flextronics International Ltd., a
Singapore company ("Flextronics"), Lightning Metal Acquisition Corp., a Delaware
corporation and an indirect wholly-owned subsidiary of Flextronics ("Lightning
Metal Merger Sub"), Coating Acquisition Corp., a Delaware corporation and an
indirect wholly-owned subsidiary of Flextronics ("Coating Merger Sub"),
Lightning Tool Acquisition Corp., a Delaware corporation and an indirect
wholly-owned subsidiary of Flextronics ("Lightning Tool Merger Sub" and,
together with Lightning Metal Merger Sub and Coating Merger Sub, the "Merger
Subs" and each individually a "Merger Sub"), Lightning Metal Specialties,
Incorporated, an Illinois corporation ("Lightning Metal"), Coating Technologies,
Inc., an Illinois corporation ("Coating"), Lightning Tool and Design, Inc., an
Illinois corporation ("Lightning Tool"), Lightning Metal Specialties E.M.F.,
Ltd., an Irish private limited company ("EMF"), Lightning Manufacturing
Solutions-Europe, Ltd., an Irish private limited company ("Lightning Europe"),
Lightning Manufacturing Solutions Texas, L.L.C., a Texas limited liability
company ("Lightning Texas"), Lightning Logistics, L.L.C., a Texas limited
liability company ("Logistics"), Papason, L.L.C., an Illinois limited liability
company ("Papason"), 200 Scott Street, L.L.C., an Illinois limited liability
company ("200 Scott Street"), 80 Scott Street, L.L.C., an Illinois limited
liability company ("80 Scott Street"), 230 Scott Street, L.L.C., an Illinois
limited liability company ("230 Scott Street"), 1350 Lively Blvd, L.L.C., an
Illinois limited liability company ("Lively"), D.A.D. Partnership, a general
partnership ("D.A.D."), S.O.N. Partnership, a general partnership ("S.O.N."),
S.O.N. II Partnership, a general partnership ("S.O.N. II" and, together with
Lightning Metal, Coating, Lightning Tool, EMF, Lightning Europe, Lightning
Texas, Logistics, Papason, 200 Scott Street, 80 Scott Street, 230 Scott Street,
Lively, D.A.D. and S.O.N., the "Companies" and each individually a "Company"),
the shareholders of Lightning Metal listed on Exhibit A (the "Lightning Metal
Shareholders"), the shareholders of Coating listed on Exhibit A (the "Coating
Shareholders"), the shareholders of Lightning Tool listed on Exhibit A (the
"Lightning Tool Shareholders"), the shareholders of EMF listed on Exhibit A (the
"EMF Shareholders"), the shareholders of Lightning Europe listed on Exhibit A
(the "Lightning Europe Shareholders" and, together with the Lightning Metal
Shareholders, the Coating Shareholders, the Lightning Tool Shareholders and the
EMF Shareholders, the "Shareholders" and each individually a "Shareholder"), the
members of Lightning Texas listed on Exhibit A (the "Lightning Texas Members"),
the members of Logistics listed on Exhibit A (the "Logistics Members"), the
members of Papason listed on Exhibit A (the "Papason Members"), the members of
200 Scott Street listed on Exhibit A (the "200 Scott Street Members"), the
members of 80 Scott Street listed on Exhibit A (the "80 Scott Street Members"),
the members of 230 Scott Street listed on Exhibit A (the "230 Scott Street
Members"), the members of Lively listed on Exhibit A (the "Lively Members" and,
together with the Lightning Texas Members, the Logistics Members, the Papason
Members, the 200 Scott Street Members, the 80 Scott Street Members and the 230
Scott Street Members, the "Members" and each individually a "Member"), the
partners of D.A.D. (the "D.A.D. Partners"), the partners of S.O.N. (the "S.O.N.
Partners") and the partners of S.O.N. II (the "S.O.N. II Partners" and, together
with the D.A.D. Partners and the S.O.N. Partners, the "Partners" and each
individually a "Partner").
<PAGE> 3
RECITALS
A. The parties intend that, subject to the terms and conditions
hereinafter set forth, Lightning Metal Merger Sub, Coating Merger Sub and
Lightning Tool Merger Sub will merge with and into Lightning Metal, Coating and
Lightning Tool, respectively (collectively, the "Merger"), with each of
Lightning Metal, Coating and Lightning Tool to be the respective surviving
corporations of the Merger, all pursuant to the terms and conditions of this
Agreement and the Certificates of Merger (the "Certificates of Merger") and the
Plans of Merger (the "Plans of Merger") substantially in the forms of Exhibits
B-1 and B-2, respectively, and the applicable provisions of the laws of the
States of Delaware and Illinois. Upon the effectiveness of the Merger, all of
the outstanding shares of common stock of each of Lightning Metal, Coating and
Lightning Tool shall be automatically converted into the right to receive, and
shall be exchangeable for, ordinary shares of Flextronics, S$0.01 par value per
share ("Flextronics Ordinary Shares"), in the manner and on the basis determined
herein and as provided in the Certificates of Merger and the Plans of Merger.
B. At the Closing (as defined in Section 11.1), the EMF Shareholders and
the Lightning Europe Shareholders will transfer to Flextronics or such
subsidiaries of Flextronics as may be designated by Flextronics, all of the
issued ordinary shares, IRPound Sterling1 par value per share, of EMF ("EMF
Ordinary Shares") and all of the issued ordinary shares, $1.00 par value per
share, of Lightning Europe ("Lightning Europe Ordinary Shares"), respectively,
in exchange for Flextronics Ordinary Shares as provided herein (collectively,
the "Irish Exchanges").
C. At the Closing, the Lightning Texas Members, the Logistics Members,
the Papason Members, the 200 Scott Street Members, the 80 Scott Street Members,
the 230 Scott Street Members and the Lively Members will transfer to Flextronics
or such subsidiaries of Flextronics as may be designated by Flextronics all of
the Lightning Texas Interests (as defined in Section 1.1(b)), all of the
Logistics Interests (as defined in Section 1.1(b)), all of the Papason Interests
(as defined in Section 1.1(b)), all of the 200 Scott Street Interests (as
defined in Section 1.1(b)), all of the 80 Scott Street Interests (as defined in
Section 1.1(b)), all of the 230 Scott Street Interests (as defined in Section
1.1(b)) and all of the Lively Interests (as defined in Section 1.1(b)),
respectively, in exchange for Flextronics Ordinary Shares as provided herein
(collectively, the "Member Exchanges").
D. At the Closing, the D.A.D. Partners, the S.O.N. Partners and the
S.O.N. II Partners will transfer to Flextronics or such subsidiaries of
Flextronics as may be designated by Flextronics all of the D.A.D. Interests (as
defined in Section 1.1(b)), all of the S.O.N. Interests (as defined in Section
1.1(b)) and all of the S.O.N. II Interests (as defined in Section 1.1(b)),
respectively, in exchange for Flextronics Ordinary Shares as provided herein
(collectively, the "Partner Exchanges" and, together with the Merger, the Irish
Exchanges and the Member Exchanges, the "Transactions").
E. The Board of Directors, Board of Managers, Members and Partners, as
applicable, of Flextronics, the Merger Subs and the Companies have determined
that this Agreement and the Transactions, as applicable, are in the best
interests of their respective companies or partnerships,
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<PAGE> 4
and the Shareholders, the Members and the Partners have approved this Agreement
and the Transactions, as applicable, and, accordingly, have agreed to effect the
Transactions upon the terms and conditions of this Agreement.
F. It is intended by the parties hereto that the Merger and the Irish
Exchanges shall constitute non-taxable reorganizations within the meaning of
Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the
"Code").
G. It is intended by the parties hereto that, for financial accounting
purposes, the Transactions will be accounted for as a pooling of interests
transaction.
H. Concurrently with the execution of this Agreement, the Shareholders,
the Members, the Partners and Flextronics are entering into a voting agreement,
dated the date hereof, in the form of Exhibit C (the "Voting Agreement") and the
Shareholders, the Members and the Partners are executing investment
representation letters, dated the date hereof, in the form of Exhibit D (the
"Investment Representation Letters").
NOW, THEREFORE, the parties hereto agree as follows:
1. PLAN OF REORGANIZATION
1.1 The Merger. The Certificates of Merger and the Plans of Merger
will be filed with the Secretary of State of the States of Delaware and
Illinois, respectively, immediately after the Closing. The effective time of the
Merger as specified in the Certificates of Merger and the Plans of Merger (the
"Effective Time") will occur on the Closing Date (as defined in Section 11.1) at
10:00 a.m., Pacific Time, or at such other date or time as Flextronics and the
Companies may mutually agree. Subject to the terms and conditions of this
Agreement, the Certificates of Merger and the Plans of Merger, Lightning Metal
Merger Sub, Coating Merger Sub and Lightning Tool Merger Sub will be merged with
and into Lightning Metal, Coating and Lightning Tool, respectively, in statutory
mergers pursuant to each applicable Certificate of Merger and Plan of Merger and
in accordance with applicable provisions of Delaware law and Illinois law as
follows:
(a) Conversion and Exchange of Shares.
(i) Lightning Metal. Each share of Lightning Metal
common stock, no par value per share (the "Lightning Metal Common Stock"), that
is issued and outstanding immediately prior to the Effective Time will, by
virtue of the Merger, and without further action on the part of any holder
thereof, be automatically converted into the right to receive, and shall be
exchangeable for (subject to Sections 1.1(c) and 1.2), (a) at the Effective
Time, that number of fully paid and nonassessable Flextronics Ordinary Shares
obtained by multiplying each such share of Lightning Metal Common Stock by the
Lightning Metal Exchange Ratio (as defined in Section 1.1(b)), and (b) on the
first anniversary of the Closing (the "Release Date"), that number of fully paid
and nonassessable Flextronics Ordinary Shares obtained by multiplying each share
of Lightning Metal Common Stock by the Lightning Metal Hold-Back Exchange Ratio
(as defined in Section 1.1(b)).
3
<PAGE> 5
(ii) Coating. Each share of Coating common stock, $1.00
par value per share (the "Coating Common Stock"), that is issued and outstanding
immediately prior to the Effective Time will, by virtue of the Merger, and
without further action on the part of any holder thereof, be automatically
converted into the right to receive, and shall be exchangeable for (subject to
Sections 1.1(c) and 1.2), (a) at the Effective Time, that number of fully paid
and nonassessable Flextronics Ordinary Shares obtained by multiplying each such
share of Coating Common Stock by the Coating Exchange Ratio (as defined in
Section 1.1(b)), and (b) on the Release Date, that number of fully paid and
nonassessable Flextronics Ordinary Shares obtained by multiplying each share of
Coating Common Stock by the Coating Hold-Back Exchange Ratio (as defined in
Section 1.1(b)).
(iii) Lightning Tool. Each share of Lightning Tool
common stock, $1.00 par value per share (the "Lightning Tool Common Stock"),
that is issued and outstanding immediately prior to the Effective Time will, by
virtue of the Merger, and without further action on the part of any holder
thereof, be automatically converted into the right to receive, and shall be
exchangeable for (subject to Sections 1.1(c) and 1.2), (a) at the Effective
Time, that number of fully paid and nonassessable Flextronics Ordinary Shares
obtained by multiplying each such share of Lightning Tool Common Stock by the
Lightning Tool Exchange Ratio (as defined in Section 1.1(b)), and (b) on the
Release Date, that number of fully paid and nonassessable Flextronics Ordinary
Shares obtained by multiplying each share of Lightning Tool Common Stock by the
Lightning Tool Hold-Back Exchange Ratio (as defined in Section 1.1(b)).
(iv) EMF. Each EMF Ordinary Share that is in issue
immediately prior to the Effective Time will, effective upon the Effective Time,
be transferred to Flextronics or such subsidiaries of Flextronics as may be
designated by Flextronics by the holder thereof in exchange for (subject to
Sections 1.1(c) and 1.2), (a) at the Effective Time, that number of fully paid
and nonassessable Flextronics Ordinary Shares obtained by multiplying each such
EMF Ordinary Share by the EMF Exchange Ratio (as defined in Section 1.1(b)), and
(b) on the Release Date, that number of fully paid and nonassessable Flextronics
Ordinary Shares obtained by multiplying each EMF Ordinary Share by the EMF
Hold-Back Exchange Ratio (as defined in Section 1.1(b)); provided, however, that
each EMF Ordinary Share that is held by EMF as a Treasury Share (within the
meaning of Section 209 of the Companies Act, 1990) shall not be so exchanged but
shall be cancelled and retrieved and no consideration shall be delivered in
exchange therefor.
(v) Lightning Europe. Each Lightning Europe Ordinary
Share that is in issue immediately prior to the Effective Time will, immediately
prior to the Effective Time, be transferred to Flextronics or such subsidiaries
of Flextronics as may be designated by Flextronics by the holder thereof in
exchange for (subject to Sections 1.1(c) and 1.2), (a) immediately prior to the
Effective Time, that number of fully paid and nonassessable Flextronics Ordinary
Shares obtained by multiplying each such Lightning Europe Ordinary Share by the
Lightning Europe Exchange Ratio (as defined in Section 1.1(b)), and (b) on the
Release Date, that number of fully paid and nonassessable Flextronics Ordinary
Shares obtained by multiplying each Lightning Europe Ordinary Share by the
Lightning Europe Hold-Back Exchange Ratio (as defined in Section 1.1(b));
provided, however, that each Lightning Europe
4
<PAGE> 6
Ordinary Share that is held by Lightning Europe as a Treasury Share (within the
meaning of Section 209 of the Companies Act, 1990) shall not be so exchanged but
shall be cancelled and retrieved and no consideration shall be delivered in
exchange therefor.
(vi) Lightning Texas. Each Lightning Texas Interest (as
defined in Section 1.1(b)) that is issued and outstanding immediately prior to
the Effective Time will, effective upon the Effective Time, be transferred to
Flextronics or such subsidiaries of Flextronics as may be designated by
Flextronics by the holder thereof in exchange for (subject to Sections 1.1(c)
and 1.2), (a) at the Effective Time, that number of fully paid and nonassessable
Flextronics Ordinary Shares obtained by multiplying each such Lightning Texas
Interest by the Lightning Texas Exchange Ratio (as defined in Section 1.1(b)),
and (b) on the Release Date, that number of fully paid and nonassessable
Flextronics Ordinary Shares obtained by multiplying each Lightning Texas
Interest by the Lightning Texas Hold-Back Exchange Ratio (as defined in Section
1.1(b)).
(vii) Logistics. Each Logistics Interest (as defined in
Section 1.1(b)) that is issued and outstanding immediately prior to the
Effective Time will, effective upon the Effective Time, be transferred to
Flextronics or such subsidiaries of Flextronics as may be designated by
Flextronics by the holder thereof in exchange for (subject to Sections 1.1(c)
and 1.2), (a) at the Effective Time, that number of fully paid and nonassessable
Flextronics Ordinary Shares obtained by multiplying each such Logistics Interest
by the Logistics Exchange Ratio (as defined in Section 1.1(b)), and (b) on the
Release Date, that number of fully paid and nonassessable Flextronics Ordinary
Shares obtained by multiplying each Logistics Interest by the Logistics
Hold-Back Exchange Ratio (as defined in Section 1.1(b)).
(viii) Papason. Each Papason Interest (as defined in
Section 1.1(b)) that is issued and outstanding immediately prior to the
Effective Time will, effective upon the Effective Time, be transferred to
Flextronics or such subsidiaries of Flextronics as may be designated by
Flextronics by the holder thereof in exchange for (subject to Sections 1.1(c)
and 1.2), (a) at the Effective Time, that number of fully paid and nonassessable
Flextronics Ordinary Shares obtained by multiplying each such Papason Interest
by the Papason Exchange Ratio (as defined in Section 1.1(b)), and (b) on the
Release Date, that number of fully paid and nonassessable Flextronics Ordinary
Shares obtained by multiplying each Papason Interest by the Papason Hold-Back
Exchange Ratio (as defined in Section 1.1(b)).
(ix) 200 Scott Street. Each 200 Scott Street Interest
(as defined in Section 1.1(b)) that is issued and outstanding immediately prior
to the Effective Time will, effective upon the Effective Time, be transferred to
Flextronics or such subsidiaries of Flextronics as may be designated by
Flextronics by the holder thereof in exchange for (subject to Sections 1.1(c)
and 1.2), (a) at the Effective Time, that number of fully paid and nonassessable
Flextronics Ordinary Shares obtained by multiplying each such 200 Scott Street
Interest by the 200 Scott Street Exchange Ratio (as defined in Section 1.1(b)),
and (b) on the Release Date, that number of fully paid and nonassessable
Flextronics Ordinary Shares obtained by multiplying
5
<PAGE> 7
each 200 Scott Street Interest by the 200 Scott Street Hold-Back Exchange Ratio
(as defined in Section 1.1(b)).
(x) 80 Scott Street. Each 80 Scott Street Interest (as
defined in Section 1.1(b)) that is issued and outstanding immediately prior to
the Effective Time will, effective upon the Effective Time, be transferred to
Flextronics or such subsidiaries of Flextronics as may be designated by
Flextronics by the holder thereof in exchange for (subject to Sections 1.1(c)
and 1.2), (a) at the Effective Time, that number of fully paid and nonassessable
Flextronics Ordinary Shares obtained by multiplying each such 80 Scott Street
Interest by the 80 Scott Street Exchange Ratio (as defined in Section 1.1(b)),
and (b) on the Release Date, that number of fully paid and nonassessable
Flextronics Ordinary Shares obtained by multiplying each 80 Scott Street
Interest by the 80 Scott Street Hold-Back Exchange Ratio (as defined in Section
1.1(b)).
(xi) 230 Scott Street. Each 230 Scott Street Interest
(as defined in Section 1.1(b)) that is issued and outstanding immediately prior
to the Effective Time will, effective upon the Effective Time, be transferred to
Flextronics or such subsidiaries of Flextronics as may be designated by
Flextronics by the holder thereof in exchange for (subject to Sections 1.1(c)
and 1.2), (a) at the Effective Time, that number of fully paid and nonassessable
Flextronics Ordinary Shares obtained by multiplying each such 230 Scott Street
Interest by the 230 Scott Street Exchange Ratio (as defined in Section 1.1(b)),
and (b) on the Release Date, that number of fully paid and nonassessable
Flextronics Ordinary Shares obtained by multiplying each 230 Scott Street
Interest by the 230 Scott Street Hold-Back Exchange Ratio (as defined in Section
1.1(b)).
(xii) Lively. Each Lively Interest (as defined in
Section 1.1(b)) that is issued and outstanding immediately prior to the
Effective Time will, effective upon the Effective Time, be transferred to
Flextronics or such subsidiaries of Flextronics as may be designated by
Flextronics by the holder thereof in exchange for (subject to Sections 1.1(c)
and 1.2), (a) at the Effective Time, that number of fully paid and nonassessable
Flextronics Ordinary Shares obtained by multiplying each such Lively Interest by
the Lively Exchange Ratio (as defined in Section 1.1(b)), and (b) on the Release
Date, that number of fully paid and nonassessable Flextronics Ordinary Shares
obtained by multiplying each Lively Interest by the Lively Hold-Back Exchange
Ratio (as defined in Section 1.1(b)).
(xiii) D.A.D. Each D.A.D. Interest (as defined in
Section 1.1(b)) that is issued and outstanding immediately prior to the
Effective Time will, effective upon the Effective Time, be transferred to
Flextronics or such subsidiaries of Flextronics as may be designated by
Flextronics by the holder thereof in exchange for (subject to Sections 1.1(c)
and 1.2), (a) at the Effective Time, that number of fully paid and nonassessable
Flextronics Ordinary Shares obtained by multiplying each such D.A.D. Interest by
the D.A.D. Exchange Ratio (as defined in Section 1.1(b)), and (b) on the Release
Date, that number of fully paid and nonassessable Flextronics Ordinary Shares
obtained by multiplying each D.A.D. Interest by the D.A.D. Hold-Back Exchange
Ratio (as defined in Section 1.1(b)).
6
<PAGE> 8
(xiv) S.O.N. Each S.O.N. Interest (as defined in
Section 1.1(b)) that is issued and outstanding immediately prior to the
Effective Time will, effective upon the Effective Time, be transferred to
Flextronics or such subsidiaries of Flextronics as may be designated by
Flextronics by the holder thereof in exchange for (subject to Sections 1.1(c)
and 1.2), (a) at the Effective Time, that number of fully paid and nonassessable
Flextronics Ordinary Shares obtained by multiplying each such S.O.N. Interest by
the S.O.N. Exchange Ratio (as defined in Section 1.1(b)), and (b) on the Release
Date, that number of fully paid and nonassessable Flextronics Ordinary Shares
obtained by multiplying each S.O.N. Interest by the S.O.N. Hold-Back Exchange
Ratio (as defined in Section 1.1(b)).
(xv) S.O.N. II. Each S.O.N. II Interest (as defined in
Section 1.1(b)) that is issued and outstanding immediately prior to the
Effective Time will, effective upon the Effective Time, be transferred to
Flextronics or such subsidiaries of Flextronics as may be designated by
Flextronics by the holder thereof in exchange for (subject to Sections 1.1(c)
and 1.2), (a) at the Effective Time, that number of fully paid and nonassessable
Flextronics Ordinary Shares obtained by multiplying each such S.O.N. II Interest
by the S.O.N. II Exchange Ratio (as defined in Section 1.1(b)), and (b) on the
Release Date, that number of fully paid and nonassessable Flextronics Ordinary
Shares obtained by multiplying each S.O.N. II Interest by the S.O.N. II
Hold-Back Exchange Ratio (as defined in Section 1.1(b)).
(xvi) Lightning Metal Merger Sub, Coating Merger Sub
and Lightning Tool Merger Sub. At the Effective Time, each share of Lightning
Metal Merger Sub, Coating Merger Sub and Lightning Tool Merger Sub common stock
that is issued and outstanding immediately prior to the Effective Time will be
converted into one validly issued, fully paid and nonassessable share of Common
Stock of Lightning Metal, Coating and Lightning Tool, respectively, each as a
Surviving Corporation (as defined below). Each certificate evidencing ownership
of shares of the common stock of Lightning Metal Merger Sub, Coating Merger Sub
and Lightning Tool Merger Sub will evidence ownership of such shares of capital
stock of Lightning Metal, Coating and Lightning Tool, respectively, each as a
Surviving Corporation.
(b) Definitions.
(i) The "Lightning Metal Exchange Ratio" equals the
quotient obtained by dividing (A) the quotient of (x) the product of ninety
percent (90%) multiplied by the Lightning Metal Acquisition Price, divided by
(y) the Flextronics Average Price Per Share by (B) the total number of shares of
Lightning Metal Capital Stock as of the Effective Time. The "Lightning Metal
Acquisition Price" equals $29,444,165.41. The term "Lightning Metal Capital
Stock" means the outstanding shares of Lightning Metal Common Stock and any
other classes and series of common and preferred stock of Lightning Metal, if
any, in each case on a fully diluted, as-converted basis and as of the Effective
Time, including, without limitation or duplication, all shares of such stock
that are issuable upon the exercise of any outstanding convertible stock,
options, warrants and other rights thereto (whether or not such rights are
vested or exercisable as of the Effective Time). The term "Lightning Metal
Hold-Back Shares" means that number of Flextronics Ordinary Shares issued to
Lightning Metal Shareholders on the
7
<PAGE> 9
Release Date equal to the quotient of (A) the product of ten percent (10%)
multiplied by the Lightning Metal Acquisition Price, divided by (B) the
Flextronics Average Price Per Share, reduced as, and to the extent, set forth in
Section 15.3. The term "Lightning Metal Hold-Back Exchange Ratio" means the
quotient obtained by dividing the Lightning Metal Hold-Back Shares by the total
number of shares of Lightning Metal Capital Stock as of the Effective Time.
(ii) The "Coating Exchange Ratio" equals the quotient
obtained by dividing (A) the quotient of (x) the product of ninety percent (90%)
multiplied by the Coating Acquisition Price, divided by (y) the Flextronics
Average Price Per Share by (B) the total number of shares of Coating Capital
Stock as of the Effective Time. The "Coating Acquisition Price" equals
$3,793,343.90. The term "Coating Capital Stock" means the outstanding shares of
Coating Common Stock and any other classes and series of common and preferred
stock of Coating, if any, in each case on a fully diluted, as-converted basis
and as of the Effective Time, including, without limitation or duplication, all
shares of such stock that are issuable upon the exercise of any outstanding
convertible stock, options, warrants and other rights thereto (whether or not
such rights are vested or exercisable as of the Effective Time). The term
"Coating Hold-Back Shares" means that number of Flextronics Ordinary Shares
issued to Coating Shareholders on the Release Date equal to the quotient of (A)
the product of ten percent (10%) multiplied by the Coating Acquisition Price,
divided by (B) the Flextronics Average Price Per Share, reduced as, and to the
extent, set forth in Section 15.3. The term "Coating Hold-Back Exchange Ratio"
means the quotient obtained by dividing the Coating Hold-Back Shares by the
total number of shares of Coating Capital Stock as of the Effective Time.
(iii) The "Lightning Tool Exchange Ratio" equals the
quotient obtained by dividing (A) the quotient of (x) the product of ninety
percent (90%) multiplied by the Lightning Tool Acquisition Price, divided by (y)
the Flextronics Average Price Per Share by (B) the total number of shares of
Lightning Tool Capital Stock as of the Effective Time. The "Lightning Tool
Acquisition Price" equals $5,251,200.03. The term "Lightning Tool Capital Stock"
means the outstanding shares of Lightning Tool Common Stock and any other
classes and series of common and preferred stock of Lightning Tool, if any, in
each case on a fully diluted, as-converted basis and as of the Effective Time,
including, without limitation or duplication, all shares of such stock that are
issuable upon the exercise of any outstanding convertible stock, options,
warrants and other rights thereto (whether or not such rights are vested or
exercisable as of the Effective Time). The term "Lightning Tool Hold-Back
Shares" means that number of Flextronics Ordinary Shares issued to Lightning
Tool Shareholders on the Release Date equal to the quotient of (A) the product
of ten percent (10%) multiplied by the Lightning Tool Acquisition Price, divided
by (B) the Flextronics Average Price Per Share, reduced as, and to the extent,
set forth in Section 15.3. The term "Lightning Tool Hold-Back Exchange Ratio"
means the quotient obtained by dividing the Lightning Tool Hold-Back Shares by
the total number of shares of Lightning Tool Capital Stock as of the Effective
Time.
(iv) The "EMF Exchange Ratio" equals the quotient
obtained by dividing (A) the quotient of (x) the product of ninety percent (90%)
multiplied by the EMF Acquisition Price, divided by (y) the Flextronics Average
Price Per Share by (B) the total number of shares of EMF Capital Stock as of the
Effective Time. The "EMF Acquisition Price" equals
8
<PAGE> 10
$49,967.77. The term "EMF Capital Stock" means the EMF Ordinary Shares and any
other classes and series of ordinary and extraordinary shares of EMF, if any, in
each case on a fully diluted, as-converted basis and as of the Effective Time,
including, without limitation or duplication, all such shares that are issuable
upon the exercise of any outstanding convertible shares, options, warrants and
other rights thereto (whether or not such rights are vested or exercisable as of
the Effective Time). The term "EMF Hold-Back Shares" means that number of
Flextronics Ordinary Shares issued to EMF Shareholders on the Release Date equal
to the quotient of (A) the product of ten percent (10%) multiplied by the EMF
Acquisition Price, divided by (B) the Flextronics Average Price Per Share,
reduced as, and to the extent, set forth in Section 15.3. The term "EMF
Hold-Back Exchange Ratio" means the quotient obtained by dividing the EMF
Hold-Back Shares by the total number of shares of EMF Capital Stock as of the
Effective Time.
(v) The "Lightning Europe Exchange Ratio" equals the
quotient obtained by dividing (A) the quotient of (x) the product of ninety
percent (90%) multiplied by the Lightning Europe Acquisition Price, divided by
(y) the Flextronics Average Price Per Share by (B) the total number of shares of
Lightning Europe Capital Stock as of the Effective Time. The "Lightning Europe
Acquisition Price" equals $7,976,282.17. The term "Lightning Europe Capital
Stock" means the Lightning Europe Ordinary Shares and any other classes and
series of ordinary and extraordinary shares of Lightning Europe, if any, in each
case on a fully diluted, as-converted basis and as of the Effective Time,
including, without limitation or duplication, all such shares that are issuable
upon the exercise of any outstanding convertible shares, options, warrants and
other rights thereto (whether or not such rights are vested or exercisable as of
the Effective Time). The term "Lightning Europe Hold-Back Shares" means that
number of Flextronics Ordinary Shares issued to Lightning Europe Shareholders on
the Release Date equal to the quotient of (A) the product of ten percent (10%)
multiplied by the Lightning Europe Acquisition Price, divided by (B) the
Flextronics Average Price Per Share, reduced as, and to the extent, set forth in
Section 15.3. The term "Lightning Europe Hold-Back Exchange Ratio" means the
quotient obtained by dividing the Lightning Europe Hold-Back Shares by the total
number of shares of Lightning Europe Capital Stock as of the Effective Time.
(vi) The "Lightning Texas Exchange Ratio" equals the
quotient obtained by dividing (A) the quotient of (x) the product of ninety
percent (90%) multiplied by the Lightning Texas Acquisition Price, divided by
(y) the Flextronics Average Price Per Share by (B) 100. The "Lightning Texas
Acquisition Price" equals $43,268,328.26. The term "Lightning Texas Interests"
means the outstanding Lightning Texas membership interests as of the Effective
Time, including, without limitation or duplication, all such membership
interests that are issuable on the exercise of any outstanding convertible
instruments, options, warrants and other rights thereto (whether or not such
rights are vested or exercisable as of the Effective Time). The term "Lightning
Texas Hold-Back Shares" means that number of Flextronics Ordinary Shares issued
to Lightning Texas Members on the Release Date equal to the quotient of (A) the
product of ten percent (10%) multiplied by the Lightning Texas Acquisition
Price, divided by (B) the Flextronics Average Price Per Share, reduced as, and
to the extent, set forth in Section 15.3. The term "Lightning Texas Hold-Back
Exchange Ratio" means the quotient obtained by dividing the Lightning Texas
Hold-Back Shares by 100.
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<PAGE> 11
(vii) The "Logistics Exchange Ratio" equals the
quotient obtained by dividing (A) the quotient of (x) the product of ninety
percent (90%) multiplied by the Logistics Acquisition Price, divided by (y) the
Flextronics Average Price Per Share by (B) 100. The "Logistics Acquisition
Price" equals $3,500,000.00. The term "Logistics Interests" means the
outstanding Logistics membership interests as of the Effective Time, including,
without limitation or duplication, all such membership interests that are
issuable on the exercise of any outstanding convertible instruments, options,
warrants and other rights thereto (whether or not such rights are vested or
exercisable as of the Effective Time). The term "Logistics Hold-Back Shares"
means that number of Flextronics Ordinary Shares issued to Logistics Members on
the Release Date equal to the quotient of (A) the product of ten percent (10%)
multiplied by the Logistics Acquisition Price, divided by (B) the Flextronics
Average Price Per Share, reduced as, and to the extent, set forth in Section
15.3. The term "Logistics Hold-Back Exchange Ratio" means the quotient obtained
by dividing the Logistics Hold-Back Shares by 100.
(viii) The "Papason Exchange Ratio" equals the quotient
obtained by dividing (A) the quotient of (x) the product of ninety percent (90%)
multiplied by the Papason Acquisition Price, divided by (y) the Flextronics
Average Price Per Share by (B) 100. The "Papason Acquisition Price" equals
$3,128,982.27. The term "Papason Interests" means the outstanding Papason
membership interests as of the Effective Time, including, without limitation or
duplication, all such membership interests that are issuable on the exercise of
any outstanding convertible instruments, options, warrants and other rights
thereto (whether or not such rights are vested or exercisable as of the
Effective Time). The term "Papason Hold-Back Shares" means that number of
Flextronics Ordinary Shares issued to Papason Members on the Release Date equal
to the quotient of (A) the product of ten percent (10%) multiplied by the
Papason Acquisition Price, divided by (B) the Flextronics Average Price Per
Share, reduced as, and to the extent, set forth in Section 15.3. The term
"Papason Hold-Back Exchange Ratio" means the quotient obtained by dividing the
Papason Hold-Back Shares by the total number of Papason Interests as of the
Effective Time.
(ix) The "200 Scott Street Exchange Ratio" equals the
quotient obtained by dividing (A) the quotient of (x) the product of ninety
percent (90%) multiplied by the 200 Scott Street Acquisition Price, divided by
(y) the Flextronics Average Price Per Share by (B) 100. The "200 Scott Street
Acquisition Price" equals $282,804.00. The term "200 Scott Street Interests"
means the outstanding 200 Scott Street membership interests as of the Effective
Time, including, without limitation or duplication, all such membership
interests that are issuable on the exercise of any outstanding convertible
instruments, options, warrants and other rights thereto (whether or not such
rights are vested or exercisable as of the Effective Time). The term "200 Scott
Street Hold-Back Shares" means that number of Flextronics Ordinary Shares issued
to 200 Scott Street Members on the Release Date equal to the quotient of (A) the
product of ten percent (10%) multiplied by the 200 Scott Street Acquisition
Price, divided by (B) the Flextronics Average Price Per Share, reduced as, and
to the extent, set forth in Section 15.3. The term "200 Scott Street Hold-Back
Exchange Ratio" means the quotient obtained by dividing the 200 Scott Street
Hold-Back Shares by the total number of 200 Scott Street Interests as of the
Effective Time.
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<PAGE> 12
(x) The "80 Scott Street Exchange Ratio" equals the
quotient obtained by dividing (A) the quotient of (x) the product of ninety
percent (90%) multiplied by the 80 Scott Street Acquisition Price, divided by
(y) the Flextronics Average Price Per Share by (B) 100. The "80 Scott Street
Acquisition Price" equals $483,125.15. The term "80 Scott Street Interests"
means the outstanding 80 Scott Street membership interests as of the Effective
Time, including, without limitation or duplication, all such membership
interests that are issuable on the exercise of any outstanding convertible
instruments, options, warrants and other rights thereto (whether or not such
rights are vested or exercisable as of the Effective Time). The term "80 Scott
Street Hold-Back Shares" means that number of Flextronics Ordinary Shares issued
to 80 Scott Street Members on the Release Date equal to the quotient of (A) the
product of ten percent (10%) multiplied by the 80 Scott Street Acquisition
Price, divided by (B) the Flextronics Average Price Per Share, reduced as, and
to the extent, set forth in Section 15.3. The term "80 Scott Street Hold-Back
Exchange Ratio" means the quotient obtained by dividing the 80 Scott Street
Hold-Back Shares by the total number of 80 Scott Street Interests as of the
Effective Time.
(xi) The "230 Scott Street Exchange Ratio" equals the
quotient obtained by dividing (A) the quotient of (x) the product of ninety
percent (90%) multiplied by the 230 Scott Street Acquisition Price, divided by
(y) the Flextronics Average Price Per Share by (B) 100. The "230 Scott Street
Acquisition Price" equals $503,033.45. The term "230 Scott Street Interests"
means the outstanding 230 Scott Street membership interests as of the Effective
Time, including, without limitation or duplication, all such membership
interests that are issuable on the exercise of any outstanding convertible
instruments, options, warrants and other rights thereto (whether or not such
rights are vested or exercisable as of the Effective Time). The term "230 Scott
Street Hold-Back Shares" means that number of Flextronics Ordinary Shares issued
to 230 Scott Street Members on the Release Date equal to the quotient of (A) the
product of ten percent (10%) multiplied by the 230 Scott Street Acquisition
Price, divided by (B) the Flextronics Average Price Per Share, reduced as, and
to the extent, set forth in Section 15.3. The term "230 Scott Street Hold-Back
Exchange Ratio" means the quotient obtained by dividing the 230 Scott Street
Hold-Back Shares by the total number of 230 Scott Street Interests as of the
Effective Time.
(xii) The "Lively Exchange Ratio" equals the quotient
obtained by dividing (A) the quotient of (x) the product of ninety percent (90%)
multiplied by the Lively Acquisition Price, divided by (y) the Flextronics
Average Price Per Share by (B) 100. The "Lively Acquisition Price" equals
$708,966.59. The term "Lively Interests" means the outstanding Lively membership
interests as of the Effective Time, including, without limitation or
duplication, all such membership interests that are issuable on the exercise of
any outstanding convertible instruments, options, warrants and other rights
thereto (whether or not such rights are vested or exercisable as of the
Effective Time). The term "Lively Hold-Back Shares" means that number of
Flextronics Ordinary Shares issued to Lively Members on the Release Date equal
to the quotient of (A) the product of ten percent (10%) multiplied by the Lively
Acquisition Price, divided by (B) the Flextronics Average Price Per Share,
reduced as, and to the extent, set forth in Section 15.3. The term "Lively
Hold-Back Exchange Ratio" means the quotient obtained by dividing the Lively
Hold-Back Shares by the total number of Lively Interests as of the Effective
Time.
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<PAGE> 13
(xiii) The "D.A.D. Exchange Ratio" equals the quotient
obtained by dividing (A) the quotient of (x) the product of ninety percent (90%)
multiplied by the D.A.D. Acquisition Price, divided by (y) the Flextronics
Average Price Per Share by (B) 100. The "D.A.D. Acquisition Price" equals
$1,226,495.09. The term "D.A.D. Interests" means the outstanding D.A.D.
partnership interests as of the Effective Time, including, without limitation or
duplication, all such partnership interests that are issuable on the exercise of
any outstanding convertible instruments, options, warrants and other rights
thereto (whether or not such rights are vested or exercisable as of the
Effective Time). The term "D.A.D. Hold-Back Shares" means that number of
Flextronics Ordinary Shares issued to D.A.D. Partners on the Release Date equal
to the quotient of (A) the product of ten percent (10%) multiplied by the D.A.D.
Acquisition Price, divided by (B) the Flextronics Average Price Per Share,
reduced as, and to the extent, set forth in Section 15.3. The term "D.A.D.
Hold-Back Exchange Ratio" means the quotient obtained by dividing the D.A.D.
Hold-Back Shares by the total number of D.A.D. Interests as of the Effective
Time.
(xiv) The "S.O.N. Exchange Ratio" equals the quotient
obtained by dividing (A) the quotient of (x) the product of ninety percent (90%)
multiplied by the S.O.N. Acquisition Price, divided by (y) the Flextronics
Average Price Per Share by (B) 100. The "S.O.N. Acquisition Price" equals
$311,485.39. The term "S.O.N. Interests" means the outstanding S.O.N.
partnership interests as of the Effective Time, including, without limitation or
duplication, all such partnership interests that are issuable on the exercise of
any outstanding convertible instruments, options, warrants and other rights
thereto (whether or not such rights are vested or exercisable as of the
Effective Time). The term "S.O.N. Hold-Back Shares" means that number of
Flextronics Ordinary Shares issued to S.O.N. Partners on the Release Date equal
to the quotient of (A) the product of ten percent (10%) multiplied by the S.O.N.
Acquisition Price, divided by (B) the Flextronics Average Price Per Share,
reduced as, and to the extent, set forth in Section 15.3. The term "S.O.N.
Hold-Back Exchange Ratio" means the quotient obtained by dividing the S.O.N.
Hold-Back Shares by the total number of S.O.N. Interests as of the Effective
Time.
(xv) The "S.O.N. II Exchange Ratio" equals the quotient
obtained by dividing (A) the quotient of (x) the product of ninety percent (90%)
multiplied by the S.O.N. II Acquisition Price, divided by (y) the Flextronics
Average Price Per Share by (B) 100. The "S.O.N. II Acquisition Price" equals
$393,512.50. The term "S.O.N. II Interests" means the outstanding S.O.N. II
partnership interests as of the Effective Time, including, without limitation or
duplication, all such partnership interests that are issuable on the exercise of
any outstanding convertible instruments, options, warrants and other rights
thereto (whether or not such rights are vested or exercisable as of the
Effective Time). The term "S.O.N. II Hold-Back Shares" means that number of
Flextronics Ordinary Shares issued to S.O.N. II Partners on the Release Date
equal to the quotient of (A) the product of ten percent (10%) multiplied by the
S.O.N. II Acquisition Price, divided by (B) the Flextronics Average Price Per
Share, reduced as, and to the extent, set forth in Section 15.3. The term
"S.O.N. II Hold-Back Exchange Ratio" means the quotient obtained by dividing the
S.O.N. II Hold-Back Shares by the total number of S.O.N. II Interests as of the
Effective Time.
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<PAGE> 14
(xvi) The "Flextronics Average Price Per Share" equals
the average of the closing price per share of Flextronics Ordinary Shares (in
U.S. dollars) as quoted on the Nasdaq National Market (or such other exchange or
quotation system registered under the Securities Exchange Act of 1934, as
amended, on which Flextronics Ordinary Shares are then traded or quoted) and
reported in The Wall Street Journal averaged over the twenty (20) trading days
ending with the trading day immediately prior to the Closing Date.
(xvii) The term "Hold-Back Shares" means the Lightning
Metal Hold-Back Shares, the Coating Hold-Back Shares, the Lightning Tool
Hold-Back Shares, the EMF Hold-Back Shares, the Lightning Europe Hold-Back
Shares, the Lightning Texas Hold-Back Shares, the Logistics Hold-Back Shares,
the Papason Hold-Back Shares, the 200 Scott Street Hold-Back Shares, the 80
Scott Street Hold-Back Shares, the 230 Scott Street Hold-Back Shares, the Lively
Hold-Back Shares, the D.A.D. Hold-Back Shares, the S.O.N. Hold-Back Shares, the
S.O.N. II Hold-Back Shares and the Shareholder Note Hold-Back Shares,
collectively.
(c) Adjustments for Capital Changes. If, between the date
hereof and the Effective Time (as to the Flextronics Ordinary Shares to be
issued at the Effective Time), or between the date hereof and the Release Date
(in the case of the Hold-Back Shares), Flextronics (i) recapitalizes either
through a split-up of its outstanding shares into a greater number of shares, or
through a combination of its outstanding shares into a lesser number of shares,
or (ii) reorganizes, reclassifies or otherwise changes its outstanding shares
into the same or a different number of shares of other classes (other than
through a split-up or combination of shares provided for in the previous
clause), or (iii) declares a dividend on its outstanding shares payable in
shares or securities convertible into shares, the calculation of the Lightning
Metal Exchange Ratio, the Coating Exchange Ratio, the Lightning Tool Exchange
Ratio, the EMF Exchange Ratio, the Lightning Europe Exchange Ratio, the
Lightning Texas Exchange Ratio, the Logistics Exchange Ratio, the Papason
Exchange Ratio, the 200 Scott Street Exchange Ratio, the 80 Scott Street
Exchange Ratio, the 230 Scott Street Exchange Ratio, the Lively Exchange Ratio,
the D.A.D. Exchange Ratio, the S.O.N. Exchange Ratio, the S.O.N. II Exchange
Ratio, the Shareholder Note Exchange Ratio, the Lightning Metal Hold-Back
Exchange Ratio, the Coating Hold-Back Exchange Ratio, the Lightning Tool
Hold-Back Exchange Ratio, the EMF Hold-Back Exchange Ratio, the Lightning Europe
Hold-Back Exchange Ratio, the Lightning Texas Hold-Back Exchange Ratio, the
Logistics Hold-Back Exchange Ratio, the Papason Hold-Back Exchange Ratio, the
200 Scott Street Hold-Back Exchange Ratio, the 80 Scott Street Hold-Back
Exchange Ratio, the 230 Scott Street Hold-Back Exchange Ratio, the Lively
Hold-Back Exchange Ratio, the D.A.D. Hold-Back Exchange Ratio, the S.O.N.
Hold-Back Exchange Ratio, the S.O.N. II Hold-Back Exchange Ratio and the
Shareholder Note Hold-Back Exchange Ratio will be adjusted such that the
relative ownership will be unchanged.
1.2 Fractional Shares. No fractional Flextronics Ordinary Shares
will be issued in connection with the Transactions, but in lieu thereof, the
holder of any shares of Lightning Metal Common Stock, shares of Coating Common
Stock, shares of Lightning Tool Common Stock, EMF Ordinary Shares, Lightning
Europe Ordinary Shares, Lightning Texas Interests, Logistics Interests, Papason
Interests, 200 Scott Street Interests, 80 Scott Street
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<PAGE> 15
Interests, 230 Scott Street Interests, Lively Interests, D.A.D. Interests,
S.O.N. Interests or S.O.N. II Interests who would otherwise be entitled to
receive a fraction of a Flextronics Ordinary Share will receive from
Flextronics, promptly after the Effective Time or the Release Date (as the case
may be), an amount of cash equal to the last sale price on the Nasdaq National
Market of Flextronics Ordinary Shares on the last trading day prior to the
Effective Time, multiplied by the fraction of a Flextronics Ordinary Share to
which such holder would otherwise be entitled at the Effective Time or the
Release Date, as the case may be.
1.3 Effects of the Merger. At the Effective Time: (a) the separate
existence of Lightning Metal Merger Sub, Coating Merger Sub and Lightning Tool
Merger Sub will cease and will be merged with and into Lightning Metal, Coating
and Lightning Tool, respectively, and Lightning Metal, Coating and Lightning
Tool will be the surviving corporations in the Merger (each, a "Surviving
Corporation") pursuant to the terms of each applicable Certificate of Merger and
Plan of Merger; (b) the Certificate of Incorporation and Bylaws of each of
Lightning Metal Merger Sub, Coating Merger Sub and Lightning Tool Merger Sub
will continue unchanged and be the respective Certificate of Incorporation and
Bylaws of each of Lightning Metal, Coating and Lightning Tool, each as a
Surviving Corporation; (c) each share of Lightning Metal Common Stock, Coating
Common Stock and Lightning Tool Common Stock outstanding immediately prior to
the Effective Time will be converted and exchangeable for Flextronics Ordinary
Shares as provided in Section 1.1(a); (d) the directors and executive officers
of Lightning Metal Merger Sub, Coating Merger Sub and Lightning Tool Merger Sub
will become the respective Board of Directors and officers of each of Lightning
Metal, Coating and Lightning Tool, each as a Surviving Corporation; and (e) the
Merger will, at and after the Effective Time, have all of the effects provided
by applicable law.
1.4 Further Assurances. The Companies, the Shareholders, the
Members and the Partners agree that if, at any time after the Effective Time,
Flextronics considers or is advised that any further deeds, assignments or
assurances are reasonably necessary and appropriate:
(a) to vest, perfect, confirm or continue in each Surviving
Corporation, the Merger Subs or Flextronics title to any property or rights of
Lightning Metal, Coating, Lightning Tool, EMF, Lightning Europe, Lightning
Texas, Logistics, Papason, 200 Scott Street, 80 Scott Street, 230 Scott Street,
Lively, D.A.D., S.O.N. or S.O.N. II,
(b) to convey to Flextronics or such subsidiaries of
Flextronics as may be designated by Flextronics good and marketable title to the
EMF Ordinary Shares, the Lightning Europe Ordinary Shares, the Lightning Texas
Interests, the Logistics, Interests, the Papason Interests, the 200 Scott Street
Interests, the 80 Scott Street Interests, the 230 Scott Street Interests, the
Lively Interests, the D.A.D. Interests, the S.O.N. Interests and the S.O.N. II
Interests, as applicable, or
(c) to convey to Flextronics or such subsidiaries of
Flextronics as may be designated by Flextronics any right, title, claim or
interest they may have in or to any of the Companies, the assets of such
Companies and any loans to, or notes from, such Companies made
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<PAGE> 16
or held by them, free of any adverse claims, liens, encumbrances or other rights
of third parties (except for Permitted Liens),
as provided herein, the Companies, the Shareholders, the Members and the
Partners, as applicable, shall execute and deliver all such deeds, assignments
and assurances and do all other things necessary or desirable to vest, perfect,
confirm, continue or convey title to such property or rights in each Surviving
Corporation, the Merger Subs or Flextronics, and otherwise to carry out the
purposes of this Agreement. The parties further agree that, upon Flextronics'
request, they will amend this Agreement to cause another direct or indirect
subsidiary of Flextronics to merge into Lightning Metal, Coating or Lightning
Tool, or to cause Lightning Metal, Coating or Lightning Tool to merge into
Flextronics, any Merger Sub or a different direct or indirect subsidiary of
Flextronics.
1.5 Securities Law Issues; Registration Rights. Based in part on
the representations of the Shareholders, the Members and the Partners made in
the Investment Representation Letters, the Flextronics Ordinary Shares to be
issued pursuant to this Agreement will be issued pursuant to an exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended (the
"1933 Act") and exemptions from qualification under applicable state securities
laws. Flextronics, the Shareholders, the Members and the Partners will enter
into a registration rights agreement in the form of Exhibit E hereto (the
"Registration Rights Agreement") with respect to the Flextronics Ordinary Shares
to be issued to the Shareholders, the Members and the Partners.
1.6 Tax-Free Reorganization. It is intended by the parties hereto
that the Merger and the Irish Exchanges shall constitute non-taxable
reorganizations within the meaning of Section 368(a)(1)(B) of the Code.
1.7 Pooling Accounting. The parties intend that the Transactions be
treated as a pooling of interests for accounting purposes.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANIES
Except as set forth in the Disclosure Schedule attached hereto
(which, subject to Section 16.16, shall specifically reference the Sections of
this Agreement to which the specific items of disclosure therein constitute an
exception), and subject to the limitations of liability set forth in Section
15.2, each Company (with respect only to such Company notwithstanding references
in this Section 2 to the "Companies") hereby represents and warrants that:
2.1 Power, Authorization and Validity.
(a) Each of the Companies has the right, power, legal
capacity and authority to enter into and perform its obligations under this
Agreement and all agreements to which such Company is or will be a party that
are required to be executed pursuant to this Agreement (the "Company Ancillary
Agreements"). This Agreement and the Company Ancillary Agreements to which each
Company is a party have been duly and validly approved by such Company. Each
Shareholder, each Member and each Partner has the right, power, legal
15
<PAGE> 17
capacity and authority to enter into and perform its respective obligations
under this Agreement and all agreements to which each such Shareholder, Member
or Partner is or will be a party that are required to be executed pursuant to
this Agreement (the "Shareholders Ancillary Agreements"). This Agreement and the
Shareholders Ancillary Agreements have been duly and validly approved by the
Shareholders, the Members and the Partners.
(b) No filing, authorization, consent or approval,
governmental or otherwise, or filing with any governmental authority or court is
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