EXECUTION COPY
PURCHASE AGREEMENT
BY AND AMONG
DRAKA HOLDING N.V.,
DRAKA MEXICO HOLDING, S.A. DE C.V.
INTERNATIONAL WIRE GROUP, INC.
AND
WIRE TECHNOLOGIES, INC.
Dated as of June 30, 2006
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.....................................................1
1.1 Certain Definitions............................................1
1.2 Other Definitional and Interpretive Matters....................7
ARTICLE II SALE AND PURCHASE OF EQUITY INTERESTS...........................8
2.1 Sale and Purchase of Equity Interests..........................8
ARTICLE III PURCHASE PRICE..................................................9
3.1 Purchase Price.................................................9
3.2 Payment of Purchase Price......................................9
ARTICLE IV CLOSING.........................................................9
4.1 Closing Date...................................................9
4.2 Termination....................................................9
ARTICLE V REPRESENTATIONS AND WARRANTIES OF
THE SELLER PARENT AND THE SELLER................................9
5.1 Organization and Good Standing................................10
5.2 Authorization of Agreement....................................10
5.3 Conflicts; Consents of Third Parties..........................10
5.4 Capitalization................................................11
5.5 Subsidiaries..................................................12
5.6 Books and Records.............................................12
5.7 Financial Statements..........................................12
5.8 No Undisclosed Liabilities....................................12
5.9 Absence of Certain Developments...............................12
5.10 Taxes.........................................................13
5.11 Intentionally Omitted.........................................13
5.12 Intentionally Omitted.........................................13
5.13 Real Property.................................................13
5.14 Tangible Personal Property....................................14
5.15 Intellectual Property.........................................14
5.16 Material Contracts............................................15
5.17 Employee Benefits Plans.......................................16
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TABLE OF CONTENTS
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5.18 Labor.........................................................17
5.19 Litigation....................................................17
5.20 Compliance with Laws; Permits.................................18
5.21 Environmental Matters.........................................18
5.22 Financial Advisors............................................19
5.23 Insurance.....................................................19
5.24 Corrupt Practices.............................................19
5.25 Minute Books..................................................19
5.26 Product Liability; Product Warranty...........................19
5.27 No Other Representations or Warranties; Schedules.............20
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS...............20
6.1 Organization and Good Standing................................20
6.2 Authorization of Agreement....................................20
6.3 Conflicts; Consents of Third Parties..........................21
6.4 Litigation....................................................21
6.5 Investment Intention..........................................22
6.6 Financial Advisors............................................22
6.7 Financial Capability..........................................22
6.8 Condition of the Business.....................................22
ARTICLE VII COVENANTS......................................................22
7.1 Conduct of the Business Pending the Closing...................22
7.2 Intentionally Omitted.........................................24
7.3 Preservation of Records.......................................24
7.4 Publicity.....................................................24
7.5 Use of Name...................................................24
7.6 Competition; Confidentiality..................................25
7.7 Intercompany Accounts.........................................26
7.8 Post-Closing..................................................26
ARTICLE VIII CONDITIONS TO CLOSING..........................................27
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TABLE OF CONTENTS
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8.1 Conditions Precedent to Obligations of the Purchasers.........27
8.2 Conditions Precedent to Obligations of the
Seller Parent and the Seller..................................28
8.3 Frustration of Closing Conditions.............................29
ARTICLE IX INDEMNIFICATION................................................29
9.1 Survival of Representations, Warranties and Covenants.........29
9.2 Indemnification by the Seller Parent and the Seller...........29
9.3 Indemnification by the Purchasers.............................30
9.4 Indemnification Procedures....................................30
9.5 Certain Limitations on Indemnification........................32
9.6 Calculation of Losses.........................................32
9.7 Tax Treatment of Indemnity Payments...........................33
9.8 Exclusive Remedy..............................................33
ARTICLE X TAX MATTERS....................................................33
10.1 Tax Indemnification...........................................33
10.2 Refunds.......................................................36
10.3 Disputes......................................................36
10.4 Payment of Sales, Use or Similar Taxes........................36
10.5 Tax Treatment of Indemnity Payments...........................37
10.6 Exclusivity...................................................37
ARTICLE XI MISCELLANEOUS..................................................37
11.1 Expenses......................................................37
11.2 Jurisdiction; Consent to Service of Process...................37
11.3 Entire Agreement; Amendments and Waivers......................38
11.4 Governing Law.................................................39
11.5 Notices.......................................................39
11.6 Severability..................................................40
11.7 Binding Effect; Assignment....................................40
11.8 Non-Recourse..................................................40
11.9 Counterparts..................................................40
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TABLE OF CONTENTS
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11.10 Further Assurances............................................40
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SCHEDULES
Schedule 1.1(a) Knowledge of the Seller Parent
Schedule 5.3(a) Conflicts
Schedule 5.3(b) Consents
Schedule 5.4(a) Equity Ownership
Schedule 5.4(b) Capitalization
Schedule 5.4(c) Liens
Schedule 5.6 Board of Managers
Schedule 5.7 Balance Sheet
Schedule 5.9 Absence of Certain Changes
Schedule 5.13 Real Property
Schedule 5.14(a) Tangible Personal Property
Schedule 5.14(b) Equipment List
Schedule 5.15(a) Registered Intellectual Property
Schedule 5.15(b) Intellectual Property Exceptions
Schedule 5.16(a) Material Contracts
Schedule 5.16(b)(i) Change of Control
Schedule 5.16(b)(ii) Contractual Exceptions
Schedule 5.17(a) Employee Benefit Plans
Schedule 5.17(b) Unfunded Pension Liabilities
Schedule 5.17(c) Acceleration of Benefits
Schedule 5.18(a) Labor and Collective Bargaining Agreements
Schedule 5.18(b) Labor
Schedule 5.19 Litigation
Schedule 5.20 Permits
Schedule 5.21 Environmental Matters
Schedule 5.22 Financial Advisors
Schedule 5.23 Insurance
Schedule 5.24 Corrupt Practices
Schedule 5.26 Product Liability; Product Warranty
Schedule 6.3(a) No Conflicts
Schedule 7.1 Conduct of Business
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PURCHASE AGREEMENT
This PURCHASE AGREEMENT (the "Agreement"), dated as of June 30, 2006,
by and among Draka Holding N.V., a public limited company existing under the
laws of The Netherlands ("Draka Holdings"), Draka Mexico Holding, S.A. de C.V.,
a sociedad anonima de capital variable organized under the laws of Mexico
("Draka Mexico", together with "Draka Holdings", individually, a "Purchaser" and
collectively, the "Purchasers"), International Wire Group, Inc., a Delaware
corporation (the "Seller Parent"), and Wire Technologies, Inc., an Indiana
corporation (the "Seller").
W I T N E S S E T H:
WHEREAS, (i) IWG Services Company, S. de X.X. de C.V., a
sociedad de responsabilidad limitada de capital variable organized under the
laws of Mexico ("IWG Services"), is owned by the Seller Parent and the Seller,
(ii) Cables Durango, S. de X.X. de C.V., a sociedad de responsabilidad limitada
de capital variable organized under the laws of Mexico ("Cables Durango"), is
owned by the Seller and IWG Services, and (iii) IWG Durango, S. de X.X. de C.V.,
a sociedad de responsabilidad limitada de capital variable organized under the
laws of Mexico ("IWG Durango", together with Cables Durango and IWG Services,
individually, a "Company", and collectively, the "Companies"), is owned by the
Seller Parent, the Seller and Cables Durango;
WHEREAS, the Seller Parent and the Seller desire to sell to
Purchasers, and Purchasers desire to purchase from the Seller Parent and the
Seller, all of the equity interests of the Companies (the "Equity Interests")
for the purchase price and upon the terms and conditions hereinafter set forth;
and
WHEREAS, certain terms used in this Agreement are defined in
Section 1.1;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements hereinafter contained, the parties hereby agree
as follows:
DEFINITIONS
1.1 Certain Definitions.
(a) For purposes of this Agreement, the following terms shall have the meanings
specified in this Section 1.1:
"Affiliate" means, with respect to any Person, any other
Person that, directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such Person, and
the term "control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through ownership of voting securities, by Contract or otherwise.
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"Agreement" shall have the meaning set forth in the Recitals.
"Ancillary Agreement" shall have the meaning set forth in
Section 6.2.
"Balance Sheet" shall have the meaning set forth in Section
5.7.
"Balance Sheet Date" shall have the meaning set forth in
Section 5.7.
"Business Day" means any day of the year on which national
banking institutions in New York, United States are open to the public for
conducting business and are not required or authorized to close.
"Cables Durango" shall have the meaning set forth in the
Recitals.
"Cap" shall have the meaning set forth in Section 9.5(a)(ii).
"Closing" shall have the meaning set forth in Section 4.1.
"Closing Date" shall have the meaning set forth in Section
4.1.
"Company" shall have the meaning set forth in the Recitals.
"Company Benefit Plan" shall have the meaning set forth in
Section 5.17(a).
"Company Property" shall have the meaning set forth in Section
5.13.
"Confidentiality Agreement" means the confidentiality letter
agreement, dated June 30, 2004, between Draka Deutschland Gmbh and Seller
Parent, as amended by that letter agreement, dated May 24, 2006, between the
Draka Holdings, the Seller Parent and the Seller.
"Contract" means any written contract, agreement, indenture,
note, bond, mortgage, loan, instrument, lease, or license.
"Copyrights" shall have the meaning set forth in the
definition of "Intellectual Property."
"Deductible" shall have the meaning set forth in Section
8.5(a)(i).
"Draka Holdings" shall have the meaning set forth in the
Recitals.
"Draka Mexico" shall have the meaning set forth in the
Recitals.
"Environmental Law" means any applicable Law or Order
currently in effect relating to the protection or restoration of the environment
or natural resources, including those that govern the use, management,
transportation, storage, disposal or release of materials that are hazardous to
the environment, or occupational exposure to such hazardous materials.
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"Environmental Permits" shall have the meaning set forth in
Section 5.21(a).
"Equity Interests" shall have the meaning set forth in the
Recitals.
"Excluded Matter" shall have the meaning set forth in the
definition of "Material Adverse Effect".
"GAAP" means generally accepted accounting principles in
Mexico as of the date hereof.
"Governmental Body" means any government or governmental or
regulatory body thereof, or political subdivision thereof, whether federal,
national, state, local or foreign, or any agency, instrumentality or authority
thereof, or any court or arbitrator (public or private).
"Hazardous Material" means any substance, material or waste
which is regulated by any Governmental Body under Environmental Laws as
"hazardous", "toxic", "pollutant", "contaminant" or words of similar meaning,
including petroleum and its by-products, asbestos and asbestos-containing
materials and polychlorinated biphenyls.
"Indebtedness" of any Person means, without duplication, (i)
the principal of and, accreted value and accrued and unpaid interest in respect
of (A) indebtedness of such Person for money borrowed and (B) indebtedness
evidenced by notes, debentures, bonds or other similar instruments for the
payment of which such Person is responsible or liable; (ii) all obligations of
such Person issued or assumed as the deferred purchase price of property, all
conditional sale obligations of such Person and all obligations of such Person
under any title retention agreement (but excluding trade accounts payable and
other accrued current liabilities); (iii) all obligations of the type referred
to in clauses (i) through (ii) of any Persons the payment of which such Person
is responsible or liable, directly or indirectly, as obligor, guarantor, surety
or otherwise; and (iv) all obligations of the type referred to in clauses (i)
through (iii) of other Persons secured by any Lien on any property or asset of
such Person (whether or not such obligation is assumed by such Person).
"Indemnification Claim" shall have the meaning set forth in
Section 8.5(b).
"Intellectual Property" means all intellectual property rights
used by the Companies arising from or in respect of the following: (i) all
patents and applications therefor, including continuations, divisionals,
continuations-in-part, or reissues of patent applications and patents issuing
thereon (collectively, "Patents"), (ii) all trademarks, service marks, trade
names, service names, brand names, trade dress rights, logos, Internet domain
names and corporate names, together with the goodwill associated with any of the
foregoing, and all applications, registrations and renewals thereof,
(collectively, "Marks"), (iii) copyrights and registrations and applications
therefor, works
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of authorship and mask work rights (collectively, "Copyrights") and (iv) all
Software and Technology of the Companies.
"IWG Durango" shall have the meaning set forth in the
Recitals.
"IWG Services" shall have the meaning set forth in the
Recitals.
"Knowledge of the Seller Parent" means the actual knowledge of
those Persons identified on Schedule 1.1(a).
"Law" means any foreign, federal, national, state, local law
(including common law), statute, code, ordinance, rule or regulation.
"Legal Proceeding" means any judicial, administrative or
arbitral actions, suits or proceedings (public or private) by or before a
Governmental Body.
"Liability" means any debt, liability or obligation (whether
direct or indirect, absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, or due or to become due) and including all costs and expenses
relating thereto.
"Lien" means any lien, encumbrance, pledge, mortgage, deed of
trust, security interest, claim, lease, charge, option, right of first refusal,
easement, servitude or transfer restriction.
"Loss" shall have the meaning set forth in Section 8.2(a).
"Marks" shall have the meaning set forth in the definition of
"Intellectual Property."
"Material Adverse Effect" means a material adverse effect on
(i) the business, assets, properties, results of operations or financial
condition of the Companies or (ii) the ability of the Companies to consummate
the transactions contemplated by this Agreement, other than an effect resulting
from an Excluded Matter. "Excluded Matter" means any one or more of the
following: (i) the effect of any change in the United States, Mexican or foreign
economies or securities or financial markets in general; (ii) the effect of any
change that generally affects any industry in which the Companies operate; (iii)
the effect of any change arising in connection with earthquakes, hostilities,
acts of war, sabotage or terrorism or military actions or any escalation or
material worsening of any such hostilities, acts of war, sabotage or terrorism
or military actions existing or underway as of the date hereof; (iv) the effect
of any action taken by the Purchasers or their Affiliates with respect to the
transactions contemplated hereby or with respect to the Companies; (v) the
effect of any changes in applicable Laws or accounting rules; (vi) the failure
of the Companies to meet any of their internal projections (but not excluding
any effect that gave rise to, contributed to or caused such failure to meet any
such projections); or (vii) any effect resulting from the public announcement of
this Agreement, provided, however, that in the case of clauses (i), (ii), (iii)
and (v), it does not have a materially disproportionate effect on the Companies.
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"Material Contract" shall have the meaning set forth in
Section 5.16(a).
"Order" means any order, injunction, judgment, decree, ruling,
writ, assessment or arbitration award of a Governmental Body.
"Ordinary Course of Business" means the ordinary and usual
course of normal day-to-day operations of the Companies, which, for periods
subsequent to the cessation of active operation of the business of the Companies
(which is approximately the end of March 2006), shall refer to the activities
associated with the closure of such business and maintenance and security of the
related facilities and assets.
"Owned Property" shall have the meaning set forth in Section
5.13.
"Patents" shall have the meaning set forth in the definition
of "Intellectual Property."
"Permits" means any approvals, authorizations, consents,
licenses, permits, registrations or certificates of a Governmental Body.
"Permitted Exceptions" means (i) all defects, exceptions,
restrictions, easements, rights of way (servidumbres) and encumbrances disclosed
in policies of title insurance; (ii) statutory Liens for current Taxes,
assessments or other governmental charges not yet delinquent or the amount or
validity of which is being contested in good faith by appropriate proceedings;
(iii) mechanics', carriers', workers', repairers' and similar Liens arising or
incurred in the Ordinary Course of Business; (iv) zoning, entitlement and other
land use and environmental regulations by any Governmental Body; (v) title of a
lessor under a capital or operating lease; and (vi) such other imperfections in
title, charges, easements, restrictions and encumbrances which would not result
in a Material Adverse Effect.
"Person" means any individual, corporation, partnership,
limited liability company, firm, joint venture, association, joint-stock
company, trust, unincorporated organization, Governmental Body or other entity.
"Personal Property Leases" shall have the meaning set forth in
Section 5.14.
"Purchase Price" shall have the meaning set forth in Section
3.1.
"Purchaser" shall have the meaning set forth in the Recitals.
"Purchaser Confidential Information" shall have the meaning
set forth in Section 7.6(b).
"Purchaser Documents" shall have the meaning set forth in
Section 6.2.
"Purchaser Indemnified Parties" shall have the meaning set
forth in Section 9.2(a).
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"Real Property Lease" shall have the meaning set forth in
Section 5.13.
"Registered Intellectual Property" shall have the meaning set
forth in Section 5.15(a).
"Securities Act" shall have the meaning set forth in Section
6.5.
"Seller" shall have the meaning set forth in the Recitals.
"Seller Confidential Information" shall have the meaning set
forth in Section 7.5(c).
"Seller Documents" shall have the meaning set forth in Section
5.2.
"Seller Indemnified Parties" shall have the meaning set forth
in Section 9.4(a).
"Seller Parent" shall have the meaning set forth in the
Recitals.
"Seller Parent Marks" shall have the meaning set forth in
Section 7.5.
"Sellers' Legal Representative" shall mean the representative
of the Seller Parent and the Seller appointed in accordance with Article 190 of
the Mexican Income Tax Law (Ley del Impuesto Sobre la Renta) for purposes of
paying any capital gains tax to Mexican Taxing Authorities arising from payment
of the Purchase Price by the Purchasers.
"Software" means any and all (i) computer programs, including
any and all software implementations of algorithms, models and methodologies,
whether in source code or object code, and (ii) databases and compilations,
including any and all data and collections of data, whether machine readable or
otherwise.
"Straddle Period" shall have the meaning set forth in Section
10.1(c).
"Subsidiary" means any Person of which a majority of the
outstanding share capital, voting securities or other voting equity interests
are owned, directly or indirectly, by any Company.
"Survival Period" shall have the meaning set forth in Section
9.1.
"Tax" or "Taxes" means (i) all national, local or foreign
taxes, charges, fees, imposts, levies or other assessments, including all net
income, gross receipts, capital, sales, use, ad valorem, value added, transfer,
franchise, profits, inventory, capital stock, license, withholding, payroll,
employment, social security, unemployment, excise, severance, stamp, occupation,
property and estimated taxes, customs duties, fees, assessments and charges of
any kind whatsoever, and (ii) all interest, penalties, fines, additions to tax
or additional amounts imposed by any Taxing Authority in connection with any
item described in clause (i).
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"Tax Claim" shall have the meaning set forth in Section
10.1(f)(i).
"Tax Return" means any return, report or statement required to
be filed with respect to any Tax (including any attachments thereto, and any
amendment thereof), including any information return, claim for refund, amended
return or declaration of estimated Tax, and including, where permitted or
required, combined, consolidated or unitary returns for any group of entities
that includes the Seller Parent, the Seller or any of their Affiliates.
"Taxing Authority" means any Governmental Body responsible for
the administration of any Tax.
"Technology" means, collectively, all information, designs,
formulae, algorithms, procedures, methods, techniques, ideas, know-how, research
and development, technical data, programs, subroutines, tools, materials,
specifications, processes, inventions (whether patentable or unpatentable and
whether or not reduced to practice), apparatus, creations, improvements, works
of authorship and other similar materials, and all recordings, graphs, drawings,
reports, analyses, and other writings, and other tangible embodiments of the
foregoing, in any form whether or not specifically listed herein, and all
related technology, that are used in, incorporated in, embodied in, displayed by
or relate to, or are used by the Companies.
"Transition Services Agreement" means the Transition Services
Agreement, dated as of the date hereof, between the Seller Parent and Draka
Holdings.
1.2 Other Definitional and Interpretive Matters.
(a) Unless otherwise expressly provided, for purposes of
this Agreement, the following rules of interpretation shall apply:
Calculation of Time Period. When calculating the period of
time before which, within which or following which any act is to be done or step
taken pursuant to this Agreement, the date that is the reference date in
calculating such period shall be excluded. If the last day of such period is a
non-Business Day, the period in question shall end on the next succeeding
Business Day.
Dollars. Any reference in this Agreement to $ shall mean U.S.
dollars. All monetary amounts referenced herein shall be, unless otherwise
specifically referenced, U.S. dollar mounts.
Peso. Any reference in this Agreement to Ps shall mean Mexican
pesos.
Exhibits/Schedules. The Exhibits and Schedules to this
Agreement are hereby incorporated and made a part hereof and are an integral
part of this Agreement. All Exhibits and Schedules annexed hereto or referred to
herein are hereby incorporated in and made a part of this Agreement as if set
forth in full herein. Any matter or item disclosed on one Schedule shall be
deemed to have been disclosed on each other Schedule, and all such information
shall be deemed to qualify the entire Agreement and
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not just such section. The Seller Parent or the Seller may, at its option,
include in the Schedules items that are not material in order to avoid any
misunderstanding, and such inclusion, or any references to dollar amounts, shall
not be deemed to be an acknowledgement or representation that such items are
material, to establish any standard of materiality or to define further the
meaning of such terms for purposes of this Agreement. No disclosure on a
Schedule relating to a possible breach or violation of any Contract, Law or
Order shall be construed as an admission or indication that breach or violation
exists or has actually occurred. Any capitalized terms used in any Schedule or
Exhibit but not otherwise defined therein shall be defined as set forth in this
Agreement.
Gender and Number. Any reference in this Agreement to gender
shall include all genders, and words imparting the singular number only shall
include the plural and vice versa.
Headings. The provision of a Table of Contents, the division
of this Agreement into Articles, Sections and other subdivisions and the
insertion of headings are for convenience of reference only and shall not affect
or be utilized in construing or interpreting this Agreement. All references in
this Agreement to any "Section" are to the corresponding Section of this
Agreement unless otherwise specified.
Herein. The words such as "herein," "hereinafter," "hereof,"
and "hereunder" refer to this Agreement as a whole and not merely to a
subdivision in which such words appear unless the context otherwise requires.
Including. The word "including" or any variation thereof means
(unless the context of its usage otherwise requires) "including, without
limitation" and shall not be construed to limit any general statement that it
follows to the specific or similar items or matters immediately following it.
Reflected On or Set Forth In. An item arising with respect to
a specific representation or warranty shall be deemed to be "reflected on" or
"set forth in" a balance sheet or financial statements, to the extent any such
phrase appears in such representation or warranty, if (a) there is a reserve,
accrual or other similar item underlying a number on such balance sheet or
financial statements that related to the subject matter of such representation,
(b) such item is otherwise specifically set forth on the balance sheet or
financial statements or (c) such item is reflected on the balance sheet or
financial statements and is specifically set forth in the notes thereto.
(b) The parties hereto have participated jointly in the
negotiation and drafting of this Agreement and, in the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as jointly drafted by the parties hereto and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of any
provision of this Agreement.
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ARTICLE II
SALE AND PURCHASE OF EQUITY INTERESTS
2.1 Sale and Purchase of Equity Interests. Upon the terms
and subject to the conditions contained herein, the Seller Parent sells to Draka
Holdings and the Seller sells to Draka Mexico, and the Draka Holdings purchases
from the Seller Parent and Draka Mexico purchases from the Seller, the Equity
Interests.
ARTICLE III
PURCHASE PRICE
3.1 Purchase Price. The aggregate consideration for the
Equity Interests shall be an amount in cash equal to $5,000,000 (the "Purchase
Price").
3.2 Payment of Purchase Price. On the Closing Date, the
Purchasers shall pay to the Seller Parent and the Seller the Purchase Price,
which shall be paid by wire transfer of immediately available United States
funds into accounts designated by the Seller Parent and the Seller. The Purchase
Price shall be paid in New York through accounts of the Purchasers and the
Seller in banks located in New York.
ARTICLE IV
CLOSING
4.1 Closing Date. The closing of the sale and purchase of
the Equity Interests provided for in Section 2.1 hereof (the "Closing") shall
take place at the offices of Weil, Gotshal & Xxxxxx LLP located at 000 Xxxxx
Xxxxxx, Xxx Xxxx, XX 00000 at 10:00 a.m. (New York City time) on July 3, 2006
(the "Closing Date").
4.2 Termination. This Agreement shall terminate if the
Closing shall not have occurred by the close of business on the Closing Date. In
the event that this Agreement is terminated in accordance with Section 4.2, then
each of the parties shall be relieved of their duties and obligations arising
under this Agreement and such termination shall be without liability to the
Purchasers, the Company, the Seller Parent or the Seller; provided, that no such
termination shall relieve any party hereto from liability for any willful breach
of this Agreement and, provided, further, that the obligations of the parties
set forth in Article XI shall survive any such termination and shall be
enforceable hereunder.
The Confidentiality Agreement shall survive any termination of
this Agreement and nothing in this Section 4.2 shall relieve the Purchasers of
their obligations under the Confidentiality Agreement and the Purchasers agree
that the prohibition in the Confidentiality Agreement restricting the
Purchasers' ability to solicit any employee of the Companies to join the employ
of the Purchasers or any of their Affiliates shall be extended to a period of
three years from the date of this Agreement.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE SELLER PARENT AND THE SELLER
The Seller Parent and the Seller hereby represent and warrant
to the Purchasers that:
5.1 Organization and Good Standing. Each of the Seller
Parent and the Seller is a corporation duly organized, validly existing and in
good standing under the Laws of the State of Delaware and Indiana, respectively,
and has all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now conducted. Each Company is a
sociedad de responsabilidad limitada de capital variable duly organized and
validly existing under the Laws of Mexico (and in good standing to the extent
such concept is recognized by applicable Laws) and has all requisite corporate
power and authority to own, lease and operate its properties and to carry on its
business as now conducted. Each Company is duly qualified or authorized to do
business and is in good standing (to the extent applicable) under the laws of
each jurisdiction in which it owns or leases real property and each other
jurisdiction in which the conduct of its business or the ownership of its
properties requires such qualification or authorization, except where the
failure to be so qualified, authorized or in good standing (to the extent
applicable) would not have a Material Adverse Effect.
5.2 Authorization of Agreement. The Seller Parent and the
Seller each has all requisite power and authority to execute and deliver this
Agreement and each other agreement, document, or instrument or certificate
contemplated by this Agreement or to be executed by the Seller Parent or the
Seller in connection with the consummation of the transactions contemplated by
this Agreement (the "Seller Documents"), and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the Seller
Documents and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all requisite corporate action on the part
of the Seller Parent and the Seller. This Agreement has been, and each of the
Seller Documents will be at or prior to the Closing, duly and validly executed
and delivered by the Seller Parent and the Seller, and (assuming the due
authorization, execution and delivery by the other parties hereto and thereto)
this Agreement constitutes, and each Seller Document when so executed and
delivered will constitute, the legal, valid and binding obligations of the
Seller Parent and the Seller, enforceable against each in accordance with its
terms, subject to applicable bankruptcy, insolvency, concurso mercantil,
reorganization, moratorium and similar Laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity).
5.3 Conflicts; Consents of Third Parties.
(a) Except as set forth on Schedule 5.3(a), none of the
execution and delivery by the Seller Parent or the Seller of this Agreement or
the Seller Documents, the
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consummation of the transactions contemplated hereby or thereby, or compliance
by the Seller Parent, the Seller or any Company with any of the provisions
hereof or thereof will conflict with, or result in any violation of or default
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination or cancellation under, any provision of (i) the certificate
of incorporation and by-laws (estatutos sociales) or comparable organizational
documents of the Seller Parent, the Seller or any Company; (ii) any Contract or
Permit to which the Seller Parent, the Seller or any Company is a party or by
which any of the properties or assets of any Company are bound; (iii) any Order
of any Governmental Body applicable to the Seller Parent, the Seller or any
Company or by which any of the properties or assets of any Company are bound; or
(iv) any applicable material Law, other than, in the case of clauses (ii) and
(iii), such conflicts, violations, defaults, terminations or cancellations, that
would not have a Material Adverse Effect.
(b) Except as set forth on Schedule 5.3(b), no consent,
waiver, approval, Order, Permit or authorization of, or declaration or filing
with, or notification to, any Person or Governmental Body is required on the
part of the Seller Parent, the Seller or any Company in connection with the
execution and delivery of this Agreement or the Seller Documents or the
compliance by any Company with any of the provisions hereof or thereof, or the
consummation of the transactions contemplated hereby or thereby, except (i)
notice to the Foreign National Investment Registry (Registro Nacional de
Inversiones Extranieras) and (ii) for consents, waivers, approvals, Orders,
Permits or authorizations the failure of which to obtain would not have a
Material Adverse Effect.
5.4 Capitalization.
(a) IWG Durango has a fully paid-in and subscribed
capital of Ps163,342,979.00 divided into a fixed portion of Ps3,000.00 and a
variable portion of Ps163,339,979.00. Cables Durango has a fully subscribed and
paid-in capital of Ps163,302,564.0 divided into a fixed portion of Ps3,000.00
and a variable portion of Ps163,299,564.00. IWG Services has a fully subscribed
and paid-in capital of Ps3,000.00 that represents the fixed portion. All of the
capital of the Companies has been fully paid-in and non-assessable. Schedule
5.4(a) sets forth a list of all holders of Equity Interests.
(b) Except as set forth on Schedule 5.4(b), there is no
existing option, warrant, call, right, or Contract of any character to which any
Company is a party requiring, and there are no securities of any Company
outstanding which upon conversion or exchange would require, the issuance, of
any equity interests of any Company or other securities convertible into,
exchangeable for or evidencing the right to subscribe for or purchase any equity
interests of any Company, except those applicable pursuant to the General
Corporations Law (Ley General de Sociedades Mercantiles) which will have been
waived by the Closing Date. Neither the Seller Parent, the Seller nor any
Company is a party to any voting trust or other Contract with respect to the
voting, redemption, sale, transfer or other disposition of the Common Stock of
any Company.
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(c) Except as set forth on Schedule 5.4(a), (i) the
Seller Parent and the Seller are the record and beneficial owners of the Equity
Interests, free and clear of any and all Liens as of the Closing, other than the
Liens set forth on Schedule 5.4(c), which shall be released at Closing, and (ii)
the Seller Parent and the Seller have the corporate power and authority to sell,
transfer, assign and deliver such Equity Interests as provided in this
Agreement, and such delivery will convey to the Purchasers good and marketable
title to such Equity Interests, free and clear of any and all Liens.
5.5 Subsidiaries. No Company has any Subsidiaries except
as set forth on Schedule 5.4(a).
5.6 Books and Records. Each Company has delivered to the
Purchasers true and complete copies of the Articles of Incorporation and Bylaws
(estatutos sociales), each as amended to date, of such Company. The Partners
Registry Book (Libro de Registro de Socios) partnership transfer books of each
Company (which have been made available for inspection by the Purchasers prior
to the date hereof) are true and complete. Schedule 5.6 sets forth a true and
complete list of the names of the individuals serving in the Board of Managers
(Consejo de Gerentes) of each Company as of the date hereof.
5.7 Financial Statements. Schedule 5.7 sets forth copies
of the audited statutory balance sheet of each Company as at December 31, 2005
(such audited balance sheets, including the related notes and schedules thereto,
are referred to herein as the "Balance Sheet"). Except as set forth in the notes
thereto and as disclosed in Schedule 5.7, each Balance Sheet has been prepared
in accordance with GAAP consistently applied and presents fairly in all material
respects the financial position as at December 31, 2005 (the "Balance Sheet
Date").
5.8 No Undisclosed Liabilities. No Company has any
material Liabilities of any kind that would have been required to be reflected
in, reserved against or otherwise described on the Balance Sheet or in the notes
thereto in accordance with GAAP and were not so reflected, reserved against or
described, other than (i) Liabilities incurred in the Ordinary Course of
Business after the Balance Sheet Date, (ii) Liabilities incurred in connection
with the transactions contemplated hereby and (iii) Liabilities that would not
have a Material Adverse Effect.
5.9 Absence of Certain Developments. Except as
contemplated by this Agreement or as set forth on Schedule 5.9, since the
Balance Sheet Date:
(a) each Company has conducted its business only in the
Ordinary Course of Business;
(b) there has not been any event, change, occurrence or
circumstance that has had or could reasonably be expected to have a Material
Adverse Effect;
(c) other than this Agreement, neither the Seller Parent
nor the Seller has sold, transferred, redeemed or encumbered any Equity
Interests, and the Companies have not sold any equity securities of any Company;
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(d) other than in the Ordinary Course of Business, the
Companies have not increased the benefits, compensation, bonus or bonus
opportunity of any employee, officer or director of any Company;
(e) no Company has canceled or compromised any debt or
claim or amended, canceled, terminated, relinquished, waived or released any
Material Contract or right except in the Ordinary Course of Business;
(f) no Company has mortgaged, pledged or subject to any
Lien (other than Permitted Exceptions) any of its material assets, nor has any
such asset been seized or attached;
(g) no Company has acquired any material asset or sold,
assigned, transferred, conveyed, leased or otherwise disposed of any material
assets of any Company;
(h) no Company has suffered any damage, destruction or
loss of Company Properties that would materially and adversely affect its
condition (financial or otherwise) or operations (present or prospective);
(i) other than this Agreement, neither the Seller Parent nor
the Seller has issued, sold or otherwise disposed of, or agreed to issue, sell
or otherwise dispose of, any Equity Interest or any other security of any
Company and has not granted or agreed to grant any option, warrant or other
right to subscribe for or to purchase any capital or any other security of any
Company; and
(j) no Company has not paid or obligated itself to pay in
excess of $50,000 in the aggregate for any fixed assets.
5.10 Taxes. Each Company has timely filed all material Tax
Returns required to be filed by it, and all Taxes required to be paid by it have
either been paid by it or are reflected in accordance with GAAP as a reserve for
Taxes on the most recent Balance Sheet, and all such returns and reports are
correct and complete in all material respects, or requests for extensions to
file such returns or reports have been timely filed, granted and have not
expired, except to the extent that such failures to file, to pay or to have
extensions granted that remain in effect individually or in the aggregate have
not had and would not reasonably be expected to have a Material Adverse Effect,
and the Balance Sheet reflects an adequate reserve for all Taxes payable by any
Company for all taxable periods and portions thereof through the date of such
financial statements. All material Taxes required to be withheld by each Company
have been withheld and have been (or will be) duly and timely paid to the proper
taxing authority. No deficiencies for any Taxes have been proposed, asserted or
assessed against any Company that are still pending. No requests for waivers of
the time to assess any such Taxes have been made that are still pending. No
Company is liable for the Taxes of any other person as a result of any
indemnification provision or other contractual obligation. This Section 5.10
represents the sole and exclusive representation and warranty of the Seller
Parent and the Seller regarding tax matters.
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5.11 Intentionally Omitted.
5.12 Intentionally Omitted.
5.13 Real Property. Schedule 5.13 sets forth a complete
list of (i) all real property and interests in real property owned in fee by the
Companies (individually, an "Owned Property" and collectively, the "Owned
Properties"), and (ii) all leases of real property by the Companies involving
annual payments in excess of $25,000 (individually, a "Real Property Lease" and
collectively, the "Real Property Leases" and, together with the Owned
Properties, being referred to herein individually as a "Company Property" and
collectively as the "Company Properties") as lessee or lessor. The Companies
have good and valid fee title to all Owned Property, free and clear of all Liens
of any nature whatsoever except (A) Liens set forth on Schedule 5.13 and (B)
Permitted Exceptions. The Seller Parent and the Seller have made available to
the Purchasers copies of all (A) Real Property Leases and (B) all deeds, title
reports and policies for the Owned Properties in the possession of the
Companies. Each Real Property Lease is valid, binding and in full force and
effect and is enforceable in accordance with its terms by any Company, subject
to applicable bankruptcy, insolvency, concurso mercantile, reorganization,
moratorium and similar Laws affecting creditors' rights and remedies generally,
and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity). The
Companies have not received any written notice of any default or event that with
notice or lapse of time, or both, would constitute a default by any Company
under any of the Real Property Leases. The Companies have not received any
written notice from any Governmental Body asserting any violation or alleged
violation of Laws with respect to any Company Property. To the Knowledge of the
Seller Parent, the current use by the Companies of the plants, offices and other
facilities located on Company Properties does not violate any zoning or similar
land use regulation of any Governmental Body in any material respect.
5.14 Tangible Personal Property.
(a) Schedule 5.14(a) sets forth all leases of personal
property by the Companies ("Personal Property Leases") involving annual payments
in excess of $25,000. To the Knowledge of the Seller Parent, the Companies have
not received any written notice of any default or any event that with notice or
lapse of time, or both, would constitute a default, by the Companies under any
of the Personal Property Leases. The facilities, machinery, furniture, office
and other equipment of the Companies that is held for use in the business is in
good operating condition and repair except for ordinary wear and tear.
(b) Schedule 5.14(b) sets forth a list of all equipment
of each Company as of the date hereof.
5.15 Intellectual Property.
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(a) Set forth on Schedule 5.15(a) is a true and complete
list of all patents, patent applications, registered trademarks and service
marks, trademark and service xxxx applications, copyright registrations and
applications, and domain name registrations and applications owned by the
Companies ("Registered Intellectual Property").
(b) Except as set forth on Schedule 5.15(b), the
Companies own or have a valid license to use all material Intellectual Property
used by them in the Ordinary Course of Business, except to the extent the
failure to be the owner or the valid licensee would not have a Material Adverse
Effect. Except as set forth on Schedule 5.15(b), (i) the material Intellectual
Property used by the Companies is not the subject of any challenge received by
any Company in writing and (ii) the Companies have not received any written
notice of any default or any event that with notice or lapse of time, or both,
would constitute a default under any material Intellectual Property license to
which the Companies are a party or by which they are bound.
5.16 Material Contracts.
(a) Schedule 5.16(a) sets forth all of the following
Contracts to which the Companies are a party or by which it is bound
(collectively, the "Material Contracts"):
(i) Contracts with the Seller Parent and the Seller or
any current officer or director of the Companies (other than Contracts
made in the Ordinary Course of Business on terms generally available to
similarly situated non-affiliated parties);
(ii) Contracts with any labor union or association
representing any employee of the Companies;
(iii) Contracts for the sale of any of the assets of the
Companies with a fair market value in excess of $10,000;
(iv) Contracts relating to any acquisition to be made by
the Companies of any operating business or the capital stock of any
other Person;
(v) Contracts relating to the incurrence of Indebtedness,
or the making of any loans, involving amounts in the aggregate in
excess of $50,000;
(vi) Contracts which involve the expenditure of more than
$50,000 in the aggregate or require performance by any party more than
six months from the date hereof that, in either case, are not
terminable by the Companies without penalty on notice of 90 days' or
less; (vii) Contracts which involve any material license, sublicense,
option or other agreement relating in whole or in part to Intellectual
Property (including any license or other agreement under which the
Companies are a licensee or licensor of any Intellectual Property);
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(viii) Contract with or license or Permit by or from any
Governmental Body;
(ix) Contracts which involve currency exchange, interest
rate exchange, commodity exchange or other similar agreements;
(x) Contracts for any joint venture, partnership or
similar arrangement;
(xi) Contracts providing for indemnification of any Person
with respect to liabilities relating to any current or former business
of any Company (including any predecessor Person of any Company);
(xii) powers of attorney granted by any Company (other than
powers of attorney given in the Ordinary Course of Business with
respect to routine Tax matters); and
(xiii) Contracts other than as set forth above to which any
Company is a party or by which it or any of its assets are bound that
is material to the business of any Company or the use or operation of
its assets.
(b) Each Material Contract is valid, binding and in full
force and effect and is enforceable in accordance with its terms by the
Companies, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar Laws affecting creditors' rights and remedies generally,
and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity). Except as
set forth on Schedule 5.16(b)(i), no Material Contract contains a change of
control provision or other similar provision that could result in the breach or
termination of such contract upon the consummation contemplated hereby. Except
as set forth on Schedule 5.16(b)(ii), no Company, nor, to the Knowledge of the
Seller Parent, any other party to any Material Contract is in default of any
Material Contract (with or without the lapse of time or the giving of notice, or
both), except for defaults that would not have a Material Adverse Effect, nor,
to the Knowledge of the Seller Parent, has any Company received any written
notice of the intention of any party to terminate any Material Contract in
breach thereof or accelerate or modify in a manner adverse to the Seller Parent
or any Company any of the Company's obligations or rights under any Material
Contract. Except as set forth in Schedule 5.16(b)(ii), to the Knowledge of the
Seller Parent, each Company has performed all obligations required to be
performed by it to date under Material Contracts and is not (with or without the
lapse of time or the giving of notice, or both) in breach or default in any
respect thereunder.
5.17 Employee Benefits Plans.
(a) Schedule 5.17(a) lists the material employee benefits
granted by the Companies under their employee benefits policies, plans,
arrangements and programs as well as those granted under applicable Mexican
labor Laws for the benefit of any current or former employee of any Company for
which any Company could have any Liability contingent or otherwise (each, a
"Company Benefit Plan"). An accurate
16
description of each Company Benefit Plan is set forth on Schedule 5.17(a). Each
Company Benefit Plan has been maintained in compliance with its terms and with
the requirements prescribed by any and all labor, employment and Tax Laws that
are applicable to such Company Benefit Plan, except for any noncompliance that
would not have a Material Adverse Effect.
(b) All contributions, premiums and benefit payments
under or in connection with the Company Benefit Plans that are required to have
been made as of the date hereof in accordance with the terms of the Company
Benefit Plans, and where applicable, Mexican labor Laws, have been timely made
in all material respects. Except as set forth on Schedule 5.17(b), as of the
date hereof, there are no material unfunded liabilities in respect of any
Company Benefit Plan.
(c) Except as set forth on Schedule 5.17(c), the
transactions contemplated by this Agreement will not (i) result in any employee
or former employee of any Company becoming entitled to any bonus, retirement,
severance, job security or similar benefit or (ii) increase any benefits or
accelerate the time of payment or vesting of any benefits otherwise payable
under any Company Benefit Plan.
(d) This Section 5.17 represents the sole and exclusive
representation and warranty of the Seller Parent and the Seller regarding
employee benefit matters.
5.18 Labor.
(a) Except as set forth on Schedule 5.18(a), (i)
Companies are not a party to any labor or collective bargaining agreement and
(ii) there is no union-organizing activity involving any employees of the
Companies pending or, to the Knowledge of the Seller Parent, threatened.
(b) Except as set forth on Schedule 5.18(b), there are no
(i) strikes, work stoppages, work slowdowns or lockouts pending or, to the
Knowledge of the Seller Parent, threatened against or involving the Companies,
or (ii) unfair labor practice charges, grievances or complaints pending or, to
the Knowledge of the Seller Parent, threatened by or on behalf of any employee
or group of employees of the Companies, except in each case as would not have a
Material Adverse Effect.
(c) Each of the Companies is in compliance with all Laws
relating to labor, including the Mexican Social Security Institute (Instituto
Mexicano del Seguro Social), the Retirement Savings Fund System (Sistema de
Ahorro para el Retiro), the National Workers' Housing Fund Institute (Instituto
del Fondo Nacional de la Vivienda para los Trabajadores) and the Federal Labor
Law (Ley Federal del Trabajo), to the extent applicable.
(d) The representations and warranties contained in this
Section 5.18 are the sole and exclusive representations and warranties of the
Seller Parent and the Seller pertaining labor matters.
5.19 Litigation.
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(a) Except as set forth on Schedule 5.19, there are no
Legal Proceedings pending or, to the Knowledge of the Seller Parent, Legal
Proceeding or investigations threatened against the Companies before any
Governmental Body that would reasonably be expected to have a Material Adverse
Effect. The Companies are not subject to any Order of any Governmental Body
except to the extent the same would not reasonably be expected to have a
Material Adverse Effect.
(b) There are no Legal Proceedings pending or, to the
Knowledge of the Seller Parent, Legal Proceedings or investigations threatened
that are reasonably likely to prohibit or restrain the ability of the Seller
Parent to enter into this Agreement or consummate the transactions contemplated
hereby.
5.20 Compliance with Laws; Permits.
(a) Except as set forth on Schedule 5.20, (i) the
Companies are in compliance with all Laws and Orders applicable to their
business or operations or assets (including customs, duties, import and export
Laws), except where the failure to be in compliance would not have a Material
Adverse Effect, and (ii) the Companies have not received any written notice of
or been charged with the violation of any Laws or Orders, except where such
violation would not have a Material Adverse Effect. The above compliance
includes all the Laws and Orders regarding the Maquila operation.
(b) Except as set forth on Schedule 5.20, (i) the
Companies currently have all Permits which are required for the operation of
their business, other than those the failure of which to possess would not have
a Material Adverse Effect, and (ii) no Company is in default or violation (and
no event has occurred which, with notice or the lapse of time or both, would
constitute a default or violation) of any term, condition or provision of any
Permit to which it is a party, except where such default or violation would not
have a Material Adverse Effect. The above compliance includes all the Laws and
Orders regarding the Maquila operation.
5.21 Environmental Matters. The representations and
warranties contained in this Section 5.21 are the sole and exclusive
representations and warranties of the Seller Parent and the Seller pertaining or
relating to any environmental, health or safety matters, including any arising
under any Environmental Laws. Except as set forth on Schedule 5.21 hereto and
except in each case as would not have a Material Adverse Effect:
(a) the operations of the Companies are and have for the
past three years been in compliance with all applicable Environmental Laws,
which compliance includes obtaining, maintaining and complying with any Permits
required under all applicable Environmental Laws necessary to operate its
business ("Environmental Permits");
(b) no Company is subject to any pending Legal
Proceedings, or to the Knowledge of the Seller Parent, threatened investigations
or Legal Proceeding alleging
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that any Company may be in violation of any Environmental Law or any
Environmental Permit or may have any Liability under any Environmental Law;
(c) there are no pending Legal Proceedings or, to the
Knowledge of the Seller Parent, threatened investigations of or Legal
Proceedings against any Company or any currently or previously owned or leased
property of any Company under Environmental Laws; and
(d) there have been no releases of Hazardous Materials at
any currently owned or leased real property or, to the Knowledge of the Seller
Parent, any other location which could reasonably be expected to result in a
Loss to or in a Legal Proceeding against any Company.
5.22 Financial Advisors. Except as set forth on Schedule
5.22, no Person has acted, directly or indirectly, as a broker, finder or
financial advisor for the Seller Parent or the Companies in connection with the
transactions contemplated by this Agreement and no such Person, including those
set forth on Schedule 5.22, is entitled to any fee or commission or like payment
from the Purchasers or any Company in respect thereof.
5.23 Insurance. Schedule 5.23 sets forth a complete and
accurate list of all material policies currently maintained by the Companies
with respect to the business of the Companies. All such insurance policies are
in full force and effect, except where the failure to be in full force and
effect would not have a Material Adverse Effect. All premiums due and payable
for such insurance policies have been paid (or if installment payments are due,
will be paid if incurred prior to the Closing Date) other than retroactive or
retrospective premium adjustments that are not yet, but may be, required to be
paid with respect to any period ending prior to the Closing Date under
comprehensive general liability and workmen's compensation insurance policies,
and no written notice of cancellation or termination has been received with
respect to any policy set forth on Schedule 5.23 that has not been replaced on
substantially similar terms prior to the date of such cancellation or
termination.
5.24 Corrupt Practices. Except as set forth on Schedule
5.24, since January 1, 2003, (a) no Company or, to the Knowledge of the Seller
Parent, any senior manager of any Company, has been convicted of any criminal
offense or found guilty of any civil offense, in either case, involving fraud,
misrepresentation, dishonesty, breach of fiduciary duty, substantive violation
of banking laws, embezzlement or other fraudulent conversion or misappropriation
of property and (b) no Company or, to the Knowledge of the Seller Parent, any
director, officer, employee, agent or representative thereof nor any person or
entity acting on behalf of any of them, has made, offered to make, promised to
make, authorized, paid or received any bribes, kickbacks, political
contributions, or other similar payments or gifts of money or anything of value,
directly or indirectly, to any Person, including any representative of any
Governmental Body, in violation of applicable Law, (c) to the Knowledge of the
Seller Parent, there is and has never been an investigation related to the
subject matter set forth in clause (b) above and (d) no
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Company maintains or has maintained or used any unrecorded fund or asset for any
purpose listed in clause (b) above.
5.25 Minute Books. The Companies' minute books (including
the Partners Registry Book (Libro de Registro de Socios), the Partners Meetings
Minute Book (Libro de Actas de Asambleas de Socios) and the Capital Variations
Book (Libro de Registro de Variaciones de Capital) contain complete and accurate
records since January 1, 2001, as applicable.
5.26 Product Liability; Product Warranty. Except as set
forth on Schedule 5.26, (a) since January 1, 2003, all products manufactured,
merchandised, serviced, distributed, sold or delivered by the Companies have
been in conformity in all material respects with all applicable contractual
product specifications and all express or implied warranties, subject to returns
not in excess of one-half of one (0.5%) percent (as a percentage of sales of the
Companies) per annum, (b) no material Liability exists for replacement thereof
or other damages in connection with such sales or deliveries and (c) no products
heretofore sold by the Companies are now subject to any guarantee or warranty
other than the Companies' standard terms and conditions of sale.
5.27 No Other Representations or Warranties; Schedules.
Except for the representations and warranties contained in this Article V (as
modified by the Schedules hereto), neither the Seller Parent, the Seller nor any
other Person makes any other express or implied representation or warranty with
respect to any Company or the transactions contemplated by this Agreement, and
the Seller Parent and the Seller disclaim any other representations or
warranties, whether made by any Company, the Seller Parent, the Seller or any of
their respective Affiliates, officers, directors, employees, agents or
representatives. Except for the representations and warranties contained in
Article V hereof (as modified by the Schedules hereto), the Seller Parent and
the Seller hereby disclaim all liability and responsibility for any
representation, warranty, projection, forecast, statement, or information made,
communicated, or furnished (orally or in writing) to the Purchasers or their
Affiliates or representatives (including any opinion, information, projection,
or advice that may have been or may be provided to the Purchasers by any
director, officer, employee, agent, consultant, or representative of any
Company, the Seller Parent, the Seller or any of their respective Affiliates).
The Seller Parent and the Seller make no representations or warranties to the
Purchasers regarding the probable success or profitability of any Company. The
disclosure of any matter or item in any schedule hereto shall not be deemed to
constitute an acknowledgment that any such matter is required to be disclosed.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
The Purchasers hereby represent and warrant to the Seller
Parent and the Seller that:
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6.1 Organization and Good Standing. Draka Holding is a
Public limited company duly organized, validly existing and in good standing
under the Laws of the Netherlands. Draka Mexico is a sociedad anonima de capital
variable duly organized and validly existing (and in good standing to the extent
such concept is recognized under the Laws of Mexico). Each of the Purchasers has
all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business.
6.2 Authorization of Agreement. Each Purchaser has full
power and authority to execute and deliver this Agreement and each other
agreement, document, instrument or certificate contemplated by this Agreement or
to be executed by each Purchaser in connection with the consummation of the
transactions contemplated hereby and thereby (the "Purchaser Documents",
together with the Seller Documents, the "Ancillary Agreements"), and to
consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance by each Purchaser of this Agreement and each Purchaser
Document have been duly authorized by all necessary action on behalf of each
Purchaser. This Agreement has been, and each Purchaser Document will be at or
prior to Closing, duly executed and delivered by each Purchaser, and (assuming
the due authorization, execution and delivery by the other parties hereto and
thereto) this Agreement constitutes, and each Purchaser Document when so
executed and delivered will constitute, the legal, valid and binding obligation
of each Purchaser, enforceable against each Purchaser in accordance with its
terms, subject to applicable bankruptcy, insolvency, concurso mercantil,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity).
6.3 Conflicts; Consents of Third Parties.
(a) Except as set forth on Schedule 6.3(a) hereto, none
of the execution and delivery by the Purchasers of this Agreement or the
Purchaser Documents, the consummation of the transactions contemplated hereby or
thereby, or the compliance by the Purchasers with any of the provisions hereof
or thereof will conflict with, or result in any violation of or default (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination or cancellation under, any provision of (i) the certificate of
incorporation and by-laws (estatutos sociales, if applicable) of any Purchaser;
(ii) any Contract or Permit to which the Purchaser is a party or by which any
Purchaser or its properties or assets are bound; (iii) any Order of any
Governmental Body applicable to any Purchaser or by which any of the properties
or assets of any Purchaser are bound; or (iv) any applicable material Law,
except, in the case of clauses (ii) and (iii), such conflicts, violations,
defaults, terminations or cancellations, that would not have a material adverse
effect on the ability of any Purchaser to consummate the transaction
contemplated hereby or by the Purchaser Documents.
(b) No consent, waiver, approval, Order, Permit or
authorization of, or declaration or filing with, or notification to, any Person
or Governmental Body is required on the part of any Purchaser in connection with
the execution and delivery of
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this Agreement or the Purchaser Documents, the compliance by any Purchaser with
any of the provisions hereof or thereof, the consummation of the transactions
contemplated hereby or the taking by any Purchaser of any other action
contemplated hereby, except for the notice to the Foreign Investment Registry
(Registro Nacional de Inversiones Extranjeras) to be filed in Mexico after the
Closing Date, which will be filed by the Purchaser.
6.4 Litigation. There are no Legal Proceedings pending
or, to the knowledge of the Purchasers, threatened that are reasonably likely to
prohibit or restrain the ability of the Purchasers to enter into this Agreement
or consummate the transactions contemplated hereby.
6.5 Investment Intention. The Purchasers are acquiring
the Equity Interests for their own accounts, for investment purposes only and
not with a view to the distribution (as such term is used in Section 2(11) of
the Securities Act of 1933, as amended (the "Securities Act")) thereof. The
Purchasers understand that the Equity Interests have not been registered under
the Securities Act and cannot be sold unless subsequently registered under the
Securities Act or an exemption from such registration is available.
6.6 Financial Advisors. No Person has acted, directly or
indirectly, as a broker, finder or financial advisor for the Purchasers in
connection with the transactions contemplated by this Agreement and no Person is
entitled to any fee or commission or like payment in respect thereof.
6.7 Financial Capability. The Purchasers jointly (i) have
sufficient internal funds (without giving effect to any unfunded financing
regardless of whether any such financing is committed) available to pay the
Purchase Price and any expenses incurred by the Purchasers in connection with
the transactions contemplated by this Agreement, (ii) have the resources and
capabilities (financial or otherwise) to perform their obligations hereunder,
and (iii) have not incurred any obligation, commitment, restriction or Liability
of any kind, which would impair or adversely affect such resources and
capabilities.
6.8 Condition of the Business. The Purchasers acknowledge
that none of the Companies, the Seller Parent, the Seller or any of their
respective Affiliates nor any other Person has made any representation or
warranty, express or implied, as to the accuracy or completeness of any
information regarding the Companies, the Seller Parent, the Seller, or the
transactions contemplated by this Agreement not expressly set forth in this
Agreement, and none of the Seller Parent, the Seller, any of their respective
Affiliates or any other Person will have or be subject to any Liability to the
Purchasers or any other Person resulting from the distribution to the Purchasers
or their representatives or the Purchasers' use of, any such information,
including any confidential memoranda distributed on behalf of the Companies
relating to the Companies or other publications or data room information
provided to the Purchasers or their representatives, or any other document or
information in any form provided to the Purchasers or their representatives in
connection with the sale of the Companies and the transactions contemplated
hereby.
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The Purchasers acknowledge that they have conducted to their satisfaction, their
own independent investigation of the condition, operations and business of the
Companies and, in making its determination to proceed with the transactions
contemplated by this Agreement, the Purchasers have relied on the results of
their own independent investigation.
ARTICLE VII
COVENANTS
7.1 Conduct of the Business Pending the Closing.
(a) Except (I) as set forth on Schedule 7.1, (II) as
required by applicable Law, (III) as otherwise contemplated by this Agreement or
(IV) with the prior written consent of the Purchasers (which consent shall not
be unreasonably withheld, delayed or conditioned), the Seller Parent and the
Seller shall cause the Companies not to:
(i) sell, transfer or encumber any Equity Interests;
(ii) increase the benefits, compensation, bonus or bonus
opportunity of any employee, officer or director of any Company other
than in the Ordinary Course of Business;
(iii) cancel or compromise any debt or claim or amend,
cancel, terminate, relinquish, waive or release any Material Contract
or right except in the Ordinary Course of Business;
(iv) mortgage, pledge or subject to any Lien (other than
Permitted Exceptions) any of its material assets;
(v) acquire any material asset or sell, assign, transfer,
convey, lease or otherwise dispose of any material assets of any
Company except for such assets acquired, sold, assigned, transferred
conveyed, leased or otherwise disposed of in the Ordinary Course of
Business;
(vi) other than this Agreement, not issue, sell or
otherwise dispose of, any equity interests or any other security of any
Company or grant any option, warrant or other right to subscribe for or
to purchase any capital stock or any equity interests of any Company;
(vii) obligate itself to pay in excess of $50,000 in the
aggregate to purchase any new fixed assets (other than replacements);
(viii) enter into, modify or terminate any labor or
collective bargaining agreement of any Company;
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(ix) enter into or agree to enter into any merger or
consolidation with any Person;
(x) make or rescind any material election relating to
Taxes, settle or compromise any claim, action, suit, litigation,
proceeding, arbitration, investigation, audit controversy relating to
Taxes, or except as required by applicable law or GAAP, make any
material change to any of its methods of accounting or methods of
reporting income or deductions for Tax or accounting practice or policy
from those employed in the preparation of its most recent Tax Return;
or
(xi) agree to do anything prohibited by this Section 7.1.
7.2 Intentionally Omitted.
7.3 Preservation of Records. The Seller Parent, the
Seller and the Purchasers agree that each of them shall preserve and keep the
records held by them or their Affiliates relating to the respective businesses
of the Companies for a period of seven years from the Closing Date and shall
make such records and personnel available to the other as may be reasonably
required by such party including in connection with any product liability
claims, insurance claims, Legal Proceedings, preparation of financial
statements, regulatory filings or Tax returns of the Companies or its Affiliates
in respect of periods ending on or prior to Closing, or tax audits against or
governmental investigations of the Seller Parent, the Seller or the Purchasers
or any of their Affiliates or in order to enable the Seller Parent, the Seller
or the Purchasers to comply with their respective obligations under this
Agreement and each other agreement, document or instrument contemplated hereby
or thereby. In the event the Seller Parent, the Seller or the Purchasers wish to
destroy such records after that time, such party shall first give 90 days prior
written notice to the other and such other party shall have the right at its
option and expense, upon prior written notice given to such party within that 90
day period, to take possession of the records within 180 days after the date of
such notice. The Seller shall be entitled, at its sole cost and expense, to make
copies of the books and records to which it is entitled to access pursuant to
this Section 7.3.
7.4 Publicity. Neither the Seller Parent, the Seller nor
the Purchasers shall issue any press release or public announcement concerning
this Agreement or the transactions contemplated hereby without obtaining the
prior written approval of the other party hereto, which approval will not be
unreasonably withheld or delayed, unless, in the sole judgment of the Seller
Parent, the Seller or the Purchasers, as applicable, disclosure is otherwise
required by applicable Law or by the applicable rules of any stock exchange on
which the Seller Parent, the Seller or the Purchasers list securities, provided
that, to the extent required by applicable Law, the party intending to make such
release shall use its commercially reasonable efforts consistent with such
applicable Law to consult with the other party with respect to the timing and
content thereof.
7.5 Use of Name. The Purchasers agree that they shall
have no right to use of the name "International Wire", "IWG" or any service
marks, trademarks, trade
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names, identifying symbols, logos, emblems, signs or insignia related thereto or
containing or comprising the foregoing, including any name or xxxx confusingly
similar thereto (collectively, the "Seller Parent Marks") and will not at any
time hold itself out as having any affiliation with the Seller Parent, the
Seller or any of their Affiliates. In furtherance thereof, as promptly as
practicable but in no event later than six months following the Closing Date,
the Purchasers shall remove, strike over or otherwise obliterate all Seller
Parent Marks from all materials including any inventory, products, inventory
product specifications, business cards, schedules, stationery, packaging
materials, displays, signs, promotional materials, manuals, forms, computer
software and other materials. Without limiting the generality of the foregoing,
immediately following the Closing, the Purchasers shall change the name of IWG
Services to Draka Services Company, S. de X.X. de C.V. and the name of IWG
Durango to Draka Durango, S. de X.X. de C.V..
7.6 Competition; Confidentiality.
(a) For a period from the date hereof until the third (3)
year anniversary of the Closing Date, the Seller Parent shall not, and shall
cause its Subsidiaries not to, manufacture insulated wire in Mexico or sell
insulated wire to customers in Mexico in the automotive and appliance
industries. Notwithstanding anything to the contrary, this Section 7.6(a) shall
cease to apply to the Seller Parent and/or any of its Subsidiaries upon the sale
of more than 50% of the capital stock of the Seller Parent or any such
Subsidiary (including by way of merger, stock sale or otherwise) to a Person
that is not an Affiliate of the Seller Parent prior to such sale. For the
avoidance of doubt, this Section 7.6(a) shall not apply to any Person that is
not an Affiliate of the Seller Parent that purchases any assets from the Seller
Parent and/or its Subsidiaries.
(b) For a period from the date hereof until the three (3)
year anniversary of the Closing Date, the Seller Parent shall not, and shall
cause its Subsidiaries not to, directly or indirectly, disclose, reveal, divulge
or communicate to any Person other than authorized representatives of the
Purchasers or their Affiliates or use or otherwise exploit for its own benefit
or for the benefit of anyone other than the Purchasers or their Affiliates, any
Purchaser Confidential Information (as defined below). The Seller Parent and its
Subsidiaries shall not have any obligation to keep confidential any Purchaser
Confidential Information if and to the extent disclosure thereof is required by
Law or legal process or is necessary for purposes of performing under this
Agreement or any Seller Documents or enforcing any rights under this Agreement
or any Seller Documents; provided, however, that in the event disclosure is
required by Law or legal process, the Seller Parent shall, to the extent
reasonably possible, provide the Purchaser with prompt notice of such
requirement prior to making any disclosure so that the Purchaser may seek an
appropriate protective Order. For purposes of this section, "Purchaser
Confidential Information" shall mean any confidential information relating to
any Company but does not include, and there shall be no obligation hereunder
with respect to, information that (i) is generally available to the public or is
otherwise in the public domain on the Closing Date, (ii) becomes either
generally available to the public or is otherwise in the public domain or is
known by the recipient, in any such case other
25
than as a result of a disclosure by a Person not otherwise permissible under any
confidentiality agreement with the Purchasers or their Affiliates or (iii) is
independently developed by or for the Seller Parent after the Closing Date
without the use of or reliance on (directly or indirectly) any Purchaser
Confidential Information.
(c) For a period from the date hereof until the three (3)
year anniversary of the Closing Date, the Purchasers shall not, and shall cause
their Subsidiaries (including the Companies) not to, directly or indirectly,
disclose, reveal, divulge or communicate to any Person other than authorized
representatives of the Seller Parent or its Affiliates or use or otherwise
exploit for its own benefit or for the benefit of anyone other than the Seller
Parent or its Affiliates, any Seller Confidential Information (as defined
below). The Purchasers and their Subsidiaries shall not have any obligation to
keep confidential any Seller Confidential Information if and to the extent
disclosure thereof is required by Law or legal process or is necessary for
purposes of performing under this Agreement or any Purchaser Documents or
enforcing any rights under this Agreement or any Purchaser Documents; provided,
however, that in the event disclosure is required by Law or legal process, the
Purchasers shall, to the extent reasonably possible, provide the Seller Parent
with prompt notice of such requirement prior to making any disclosure so that
the Seller Parent may seek an appropriate protective Order. For purposes of this
section, "Seller Confidential Information" shall mean any confidential
information relating to the Seller Parent, the Seller or their respective
Subsidiaries (other than the Companies) but does not include, and there shall be
no obligation hereunder with respect to, information that (i) is generally
available to the public or is otherwise in the public domain on the Closing
Date, (ii) becomes either generally available to the public or is otherwise in
the public domain or is known by the recipient, in any such case other than as a
result of a disclosure by a Person not otherwise permissible under any
confidentiality agreement with the Seller Parent or its Affiliates or (iii) is
independently developed by or for the Purchasers after the Closing Date without
the use of or reliance on (directly or indirectly) any Seller Confidential
Information.
(d) The covenants and undertakings contained in Section
7.6 relate to matters which are of a special, unique and extraordinary character
and a violation of any of the terms of Section 7.6 will cause irreparable injury
to the affected party, the amount of which will be impossible to estimate or
determine and which cannot be adequately compensated. Accordingly, the remedy at
law for any breach of Section 7.6 will be inadequate. Therefore, the affected
party will be entitled to an injunction, restraining order or other equitable
relief from any court of competent jurisdiction in the event of any breach of
Section 7.6 without the necessity of proving actual damages or posting any bond
whatsoever. The rights and remedies provided by Section 7.6 are cumulative and
in addition to any other rights and remedies which the affected party may have
hereunder or at law or in equity.
(e) The parties hereto agree that, if any court of
competent jurisdiction in a final nonappealable judgment determines that a
specified time period, a specified geographical area, a specified business
limitation or any other relevant feature of this Section 7.6 is unreasonable,
arbitrary or against public policy, then a lesser time period, geographical
area, business limitation or other relevant feature which is determined by
26
such court to be reasonable, not arbitrary and not against public policy may be
enforced against the applicable party.
7.7 Intercompany Accounts. Prior to or at the Closing,
the Seller Parent, the Seller and the Companies shall cause all intercompany
obligations payable by the Seller Parent, the Seller or their Affiliates to any
Company or by any Company to the Seller Parent, the Seller or their Affiliates
to be terminated and cancelled in their entirety.
7.8 Post-Closing.
(a) Prior to the due date of the Mexican capital gains
taxes, the Seller Parent and the Seller shall provide evidence to the Purchasers
of the appointment of the Sellers' Legal Representative (though a Special Power
of Attorney duly formalized before a Mexican notary public) and the certified
public accountant in accordance with Section 10.4.
(b) Within 5 calendar days after the due date provided
under the relevant Laws, the Seller Parent and the Seller shall provide evidence
to the Purchasers of the filing of the return and payment, if any, of capital
gains taxes imposed as a result of the transfer of the Equity Interest by the
Seller Parent and the Seller.
ARTICLE VIII
CONDITIONS TO CLOSING
8.1 Conditions Precedent to Obligations of the
Purchasers. The obligation of Purchasers to consummate the transactions
contemplated by this Agreement is subject to the fulfillment, on or prior to the
Closing Date, of each of the following conditions (any or all of which may be
waived by the Purchasers in whole or in part to the extent permitted by
applicable Law):
(a) the representations and warranties of the Seller
Parent and the Seller set forth in this Agreement shall be true and correct at
and as of the Closing, except to the extent such representations and warranties
relate to an earlier date (in which case such representations and warranties
shall be true and correct on and as of such earlier date); provided, however,
that in the event of a breach of a representation or warranty, the condition set
forth in this Section 8.1(a) shall be deemed satisfied unless the effect of all
such breaches of representations and warranties taken together result in a
Material Adverse Effect, and the Purchasers shall have received a certificate
signed by an authorized officer of the Seller Parent, dated the Closing Date, to
the foregoing effect;
(b) the Seller Parent and the Seller shall have performed
and complied in all material respects with all obligations and agreements
required by this Agreement to be performed or complied with by them on or prior
to the Closing Date, and the Purchasers shall have received a certificate signed
by an authorized officer of the Seller Parent, dated the Closing Date, to the
foregoing effect;
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(c) there shall not be in effect any Order by a
Governmental Body of competent jurisdiction restraining, enjoining or otherwise
prohibiting the consummation of the transactions contemplated hereby;
(d) the Seller Parent shall have delivered, or caused to
be delivered, to the Purchaser a duly executed Assignment in the form of Exhibit
A for the Contract listed in Schedule 5.16(a) within an asterisks;
(e) the Seller Parent shall have delivered, or caused to
be delivered, to the Draka Holding a duly executed Transition Services Agreement
in substantially the form of Exhibit B;
(f) the Seller Parent shall have delivered, or caused to
be delivered, to the Purchasers evidence that all Liens on Schedule 5.4(c) have
been released;
(g) the Seller Parent and the Seller shall deliver to
Purchasers a copy certified by the Secretary of the Board of Managers of each
Company of the notation made in the Partners Registry Book (Libro de Registro de
Socios) of each Company regarding the transfer of the relevant Equity Interests
from the Seller Parent and the Seller to the Purchasers;
(h) resignations, effective as of the Closing Date, of
the individuals serving on the Board of Managers (Consejo de Gerentes) of each
of the Companies, together with a release of, and an acknowledgment that, such
officers and directors have no claims against the respective Companies;
(i) original and duly signed, completed and updated
corporate books, records and deeds of each Company including the Partners
Registry Book (Libro de Registro de Socios), the Partners Meetings Minute Book
(Libro de Actas de Asamblea de Socios), the Managers Minute Book (Libro de Actas
de Sesiones del Consejo de Gerentes) and the Capital Variations Book (Libro de
Registro de Variaciones de Capital) as applicable; and
(j) copy of the partners resolution of each Company
resolving (i) the approval to transfer the Equity Interest to Purchasers in
accordance with applicable law and each such Company's by-laws and (ii) the
waiver of the rights of first refusal contained in Article 66 of the General
Corporations Law (Ley General de Sociedades Mercantiles), transcribed into the
Partners Meetings Book duly signed.
8.2 Conditions Precedent to Obligations of the Seller
Parent and the Seller. The obligations of the Seller Parent and the Seller to
consummate the transactions contemplated by this Agreement are subject to the
fulfillment, prior to or on the Closing Date, of each of the following
conditions (any or all of which may be waived by the Seller Parent and the
Seller in whole or in part to the extent permitted by applicable Law):
(a) the representations and warranties of the Purchasers
set forth in this Agreement qualified as to materiality shall be true and
correct, and those not so
28
qualified shall be true and correct in all material respects, at and as of the
Closing Date as though made on the Closing Date, except to the extent such
representations and warranties relate to an earlier date (in which case such
representations and warranties qualified as to materiality shall be true and
correct, and those not so qualified shall be true and correct in all material
respects, on and as of such earlier date), and the Seller Parent and the Seller
shall have received a certificate signed by an authorized officer of the
Purchasers, dated the Closing Date, to the foregoing effect;
(b) the Purchasers shall have performed and complied in
all material respects with all obligations and agreements required by this
Agreement to be performed or complied with by the Purchasers on or prior to the
Closing Date, and the Seller Parent and the Seller shall have received a
certificate signed by an authorized officer of the Purchasers, dated the Closing
Date, to the foregoing effect;
(c) there shall not be in effect any Order by a
Governmental Body of competent jurisdiction restraining, enjoining or otherwise
prohibiting the consummation of the transactions contemplated hereby;
(d) the Purchaser shall have delivered, or caused to be
delivered, to the Seller Parent a duly executed Assignment in substantially the
form of Exhibit A for the Contract listed in Schedule 5.16(a) within one
asterisks;
(e) the Purchasers shall have delivered, or caused to be
delivered, to the Seller evidence of the wire transfers referred to in Section
3.2; and
(f) Draka Holding shall have delivered, or caused to be
delivered, to the Seller Parent (i) a duly executed Transition Services
Agreement in substantially the form of Exhibit B. and (ii) executed an agreement
to obtain the necessary licenses from SSA Global Technologies - North America by
June 30, 2006.
8.3 Frustration of Closing Conditions. None of the
Companies, the Purchasers, the Seller Parent or the Seller may rely on the
failure of any condition set forth in Sections 8.1 or 8.2, as the case may be,
if such failure was caused by such party's failure to comply with any provision
of this Agreement.
ARTICLE IX
INDEMNIFICATION
9.1 Survival of Representations, Warranties and
Covenants. The representations and warranties of the parties made in this
Agreement or in any Ancillary Agreement shall survive and remain in full force
and effect for a period of twenty-one (21) months after the Closing Date;
provided, however, that the representations and warranties of the Seller Parent
and the Seller contained in (i) Section 5.4 (Capitalization), Section 5.10
(Taxes) and Section 5.17 (Employee Benefits Plans) shall survive and remain in
effect until the expiration of the applicable statute of limitations and (ii)
Section 5.21 (Environmental Matters) shall survive and remain in effect for a
period of three (3) years after the Closing Date (the applicable period, the
"Survival Period"), and there shall
29
be no Liability in respect thereof to any Purchaser Indemnified Party or Seller
Indemnified Party in respect thereof after the expiration of the Survival Period
except as to any matters with respect to which a bona fide written claim shall
have been made within the Survival Period, in which event survival shall
continue (but only with respect to, and to the extent of, such claim) until such
claim shall have been finally resolved. All covenants and agreements, which, by
their terms, contemplate performance after the Closing Date, shall survive in
accordance with their terms.
9.2 Indemnification by the Seller Parent and the Seller.
(a) Subject to Section 9.5 hereof, the Seller Parent and
the Seller hereby agree to indemnify and hold the Purchasers, the Companies, and
their respective directors, officers, employees, Affiliates, stockholders,
agents, attorneys, representatives, successors and permitted assigns
(collectively, the "Purchaser Indemnified Parties") harmless from and against
any and all losses, liabilities, claims, demands, judgments, damages (excluding
incidental and consequential damages, subject to Section 9.6(b)), fines, suits,
actions, costs and expenses (individually, a "Loss" and, collectively, "Losses")
(other than any Loss relating to Taxes, for which indemnification provisions are
set forth in Article X):
(i) based upon or resulting from the failure of any of
the representations or warranties made by the Seller Parent and the
Seller in this Agreement or any Seller Document to be true and correct
in all respects at and as of the date hereof (it being agreed and
acknowledged by the parties that for purposes of the right to
indemnification pursuant to this subclause (i) the representations and
warranties of the Seller Parent or the Seller contained herein shall
not be deemed qualified by any reference therein to materiality or
Material Adverse Effect); and
(ii) based upon or resulting from the breach of any
covenant or other agreement on the part of the Seller Parent or the
Seller in this Agreement or any Seller Document.
(b) The Purchasers shall take and shall cause their
Affiliates to take all reasonable steps to mitigate any Loss upon becoming aware
of any event which would reasonably be expected to, or does, give rise thereto;
provided, however, that no such steps shall be required if they would be
detrimental in any material respect to the Purchasers or their Affiliates.
9.3 Indemnification by the Purchasers.
(a) Subject to Section 9.5, the Purchasers hereby agree
to indemnify and hold the Seller Parent and the Seller and their respective
directors, officers, employees, Affiliates, stockholders, agents, attorneys,
representatives, successors and permitted assigns (collectively, the "Seller
Indemnified Parties") harmless from and against, and pay to the applicable
Seller Indemnified Parties the amount of, any and all
30
Losses (other than any Loss relating to Taxes, for which indemnification
provisions are set forth in Article X):
(i) based upon or resulting from the failure of any of
the representations or warranties made by the Purchasers in this
Agreement or any Purchaser Document to be true and correct in all
respects at the date hereof (it being agreed and acknowledged by the
parties that for purposes of the right to indemnification pursuant to
this subclause (i) the representations and warranties of the Purchasers
contained herein shall not be deemed qualified by any reference therein
to materiality or Material Adverse Effect); and
(ii) based upon or resulting from the breach of any
covenant or other agreement on the part of the Purchasers in this
Agreement or any Purchaser Document.
(b) The Seller Parent and the Seller shall take and cause
their Affiliates to take all reasonable steps to mitigate any Loss upon becoming
aware of any event which would reasonably be expected to, or does, give rise
thereto; provided, however, that no such steps shall be required if they would
be detrimental in any material respect to the Seller Parent, the Seller or their
Affiliates.
9.4 Indemnification Procedures.
(a) A claim for indemnification for any matter not
involving a third-party claim may be asserted by notice to the party from whom
indemnification is sought.
(b) In the event that any Legal Proceedings shall be
instituted, or that any claim shall be asserted, by any third party in respect
of which payment may be sought under Sections 9.2 and 9.3 hereof (regardless of
the limitations set forth in Section 9.5) (an "Indemnification Claim"), the
indemnified party shall cause written notice thereof to be forwarded to the
indemnifying party promptly after the indemnified party's receipt of notice of
commencement of a Legal Proceeding or the assertion of any claim against it. The
failure of the indemnified party to give reasonably prompt notice of any
Indemnification Claim shall not release, waive or otherwise affect the
indemnifying party's obligations with respect thereto except to the extent that
the indemnifying party is prejudiced as a result of such failure. The
indemnifying party shall have the right, at its sole option and expense, to be
represented by counsel of its choice, which must be reasonably satisfactory to
the indemnified party, and to defend against, negotiate, settle (subject to the
provision below) or otherwise deal with any Indemnification Claim which relates
to any Losses indemnified against by it hereunder. If the indemnifying party
elects to defend against, negotiate, settle or otherwise deal with any
Indemnification Claim which relates to any Losses indemnified against by it
hereunder, it shall within 25 days (or sooner, if the nature of the
Indemnification Claim so requires) notify the indemnified party of its intent to
do so; provided that reasonable attorneys' fees and other Losses incurred by the
indemnifying party in connection with such defense, negotiation, settlement or
other dealings shall reduce (by the amount thereof) the amount recoverable by
the indemnified party under the Cap. If the indemnifying party elects not to
defend
31
against, negotiate, settle (subject to the provision below) or otherwise deal
with any Indemnification Claim which relates to any Losses indemnified against
hereunder or does not notify the indemnified party as required in the preceding
sentence, the indemnified party may defend against, negotiate, settle or
otherwise deal with such Indemnification Claim. If the indemnifying party shall
assume the defense of any Indemnification Claim, the indemnified party may
participate, at his or its own expense, in the defense of such Indemnification
Claim; provided, however, that such indemnified party shall be entitled to
participate in any such defense with separate counsel at the expense of the
indemnifying party if, (i) so requested by the indemnifying party to participate
or (ii) in the reasonable opinion of counsel to the indemnified party, a
conflict or potential conflict exists between the indemnified party and the
indemnifying party that would make such separate representation advisable; and
provided, further, that the indemnifying party shall not be required to pay for
more than one such counsel (plus any appropriate local counsel) for all
indemnified parties in connection with any Indemnification Claim. The parties
hereto agree to cooperate fully with each other in connection with the defense,
negotiation or settlement of any such Indemnification Claim. Neither the
indemnifying party nor the indemnified party shall settle or compromise any
Indemnification Claim or permit a default or consent to entry of any judgment
without the written consent of the other party, which consent shall not be
unreasonably withheld or delayed. Notwithstanding the foregoing, if a settlement
offer solely for money damages is made by the applicable third party claimant,
and the indemnifying party notifies the indemnified party in writing of the
indemnifying party's willingness to accept the settlement offer and, subject to
the applicable limitations of Sections 9.5 and 9.6, pay the amount called for by
such offer, and the indemnified party declines to accept such offer, the
indemnified party may continue to contest such Indemnification Claim, free of
any participation by the indemnifying party, and the amount of any ultimate
liability with respect to such Indemnification Claim that the indemnifying party
has an obligation to pay hereunder shall be limited to the lesser of (A) the
amount of the settlement offer that the indemnified party declined to accept
plus the Losses (including reasonable attorneys' fees) of the indemnified party
relating to such Indemnification Claim through the date of its rejection of the
settlement offer or (B) the aggregate Losses (including reasonable attorneys'
fees) of the indemnified party with respect to such Indemnification Claim. If
the indemnifying party makes any payment on any Indemnification Claim, the
indemnifying party shall be subrogated, to the extent of such payment, to all
rights and remedies of the indemnified party to any insurance benefits or other
claims of the indemnified party with respect to such Indemnification Claim.
(c) After any final decision, judgment or award shall
have been rendered by a Governmental Body of competent jurisdiction and the
expiration of the time in which to appeal therefrom, or a settlement shall have
been consummated, or the indemnified party and the indemnifying party shall have
arrived at a mutually binding agreement with respect to an Indemnification Claim
hereunder, the indemnified party shall forward to the indemnifying party notice
of any sums due and owing by the indemnifying party pursuant to this Agreement
with respect to such matter.
(d) All Tax Claims (as defined in Section 10.1(f)) shall
be governed by Article X.
32
9.5 Certain Limitations on Indemnification.
(a) Notwithstanding the provisions of this Article IX,
neither the Seller Parent, the Seller nor the Purchasers shall have any
indemnification obligations for Losses under Sections 9.2(a)(i) or 9.3(a)(i):
(i) for any Losses with respect to any individual breach
of a representation or warranty or series of related breaches arising
out of substantially similar facts and circumstances if the amount of
such Losses does not exceed $10,000;
(ii) unless and until the total amount of Losses (subject
to Section 9.5(a)(i)) exceeds $225,000 (the "Deductible"), and then
only to the extent of such excess; provided, however, that the
Deductible shall not apply to breaches of representations and
warranties of Section 5.4 (Capitalization).
(iii) for any Losses in excess of $2,000,000 (the "Cap");
provided, however, that the Losses from the breach of the
representations and warranties of Section 5.4 (Capitalization) may
exceed the Cap but shall not exceed the Purchase Price.
9.6 Calculation of Losses.
(a) The amount of any Losses for which indemnification is
provided under this Article IX shall be net of any amounts actually recovered or
recoverable by the indemnified party under insurance policies or otherwise with
respect to such Losses (net of any Tax or expenses incurred in connection with
such recovery). The Purchasers shall use their commercially reasonable efforts
to recover under insurance policies for any Losses prior to seeking
indemnification under this Agreement. The amount of any Losses shall be (i)
increased to take account of any net Tax cost incurred by the indemnified party
arising from the receipt of indemnity payments hereunder (grossed up for such
increase) and (ii) reduced to take account of any net Tax benefit realized by
the indemnified party arising from the incurrence or payment of any such Loss.
In computing the amount of any such Tax cost or Tax benefit, the indemnified
party shall be deemed to recognize all other items of income, gain, loss
deduction or credit before recognizing any item arising from the receipt of any
indemnity payment hereunder or the incurrence or payment of any indemnified
Loss.
(b) Notwithstanding anything to the contrary elsewhere in
this Agreement, no party shall, in any event, be liable to any other Person for
any consequential, incidental, indirect, special or punitive damages of such
other Person, including loss of future revenue, income or profits, diminution of
value or loss of business reputation or opportunity relating to the breach or
alleged breach hereof (other than any such damages as may be awarded to a third
party).
9.7 Tax Treatment of Indemnity Payments. The Seller
Parent, the Seller and the Purchasers agree to treat any indemnity payment made
pursuant to this Article IX as an adjustment to the Purchase Price for federal,
state, local and foreign
33
income tax purposes unless a final determination with respect to the indemnified
party or any of its Affiliates causes any such payment not to be treated as an
adjustment to the Purchase Price for income tax purposes.
9.8 Exclusive Remedy. From and after the Closing, sole
and exclusive remedy for any breach or failure to be true and correct, or
alleged breach or failure to be true and correct, of any representation or
warranty or any covenant or agreement in this Agreement or any Ancillary
Agreement, shall be indemnification in accordance with this Article IX and X;
provided, however, that this exclusive remedy for damages does not preclude a
party from bringing an action for fraud. In furtherance of the foregoing, the
parties hereby waive, to the fullest extent permitted by applicable Law, any and
all other rights, claims and causes of action (including rights of
contributions, if any) known or unknown, foreseen or unforeseen, which exist or
may arise in the future, that it may have against the Seller Parent, the Seller
or the Purchasers, as the case may be, arising under or based upon any Law
(including any such Law relating to environmental matters or arising under or
based upon any securities Law, common Law or otherwise).
ARTICLE X
TAX MATTERS
10.1 Tax Indemnification.
(a) Subject to Section 10.1(d), the Seller Parent and the
Seller shall be liable for, and shall indemnify the Purchaser Indemnified
Parties against and hold them harmless from, (i) all Liability for Taxes of any
Company or any affiliated group of which any Company has ever been a member for
any taxable period ending on or before the Closing Date, (ii) all Liability for
Taxes of any Company for the portion of any Straddle Period ending at the close
of business on the Closing Date (determined as provided in Section 10.1(c)),
(iii) Taxes arising from the breach of any representation or warranty in Section
5.10, (iv) a breach of any covenant in this Article X and (v) all Liability for
reasonable legal fees and expenses attributable to any failure by the Seller to
timely pay any item described in subclause (i), (ii), (iii) or (iv) above.
(b) The Purchasers and the Companies, jointly and
severally, shall indemnify Seller Indemnified Parties and hold them harmless
from (i) all Liability for Taxes of the Companies for any taxable period ending
after the Closing Date that is not a Straddle Period, (ii) all Liabilities for
Taxes of the Companies for the portion of any Straddle Period beginning after
the Closing Date (determined as provided in Section 10.1(c)), (iii) a breach of
any covenant in this Article X and (iv) all Liability for reasonable legal fees
and expenses attributable to any failure by the Purchasers or the Companies to
timely pay to the Seller any item described in subclause (i), (ii) or (iii)
above.
(c) In any case in which a Tax is assessed with respect
to a taxable period which includes the Closing Date (but does not begin or end
on that day) (a "Straddle Period"), the Taxes, if any, attributable to a
Straddle Period shall be allocated
34
(i) to the Seller Parent and the Seller for the period up to and including the
close of business on the Closing Date, and (ii) to the Purchasers for the period
subsequent to the Closing Date. Any allocation of income or deductions required
to determine any Taxes attributable to a Straddle Period shall be made by means
of a closing of the books and records of the Companies as of the close of the
Closing Date, provided that exemptions, allowances or deductions that are
calculated on an annual basis (including depreciation and amortization
deductions) shall be allocated between the period ending on the Closing Date and
the period after the Closing Date in proportion to the number of days in each
such period.
(d) The indemnity obligation of the Seller Parent and the
Seller under Section 10.1(a)(ii) (i.e., Taxes in connection with Straddle
Periods) shall initially be effected by their payment to the Purchasers of the
excess of (i) the portion of such Taxes apportioned to the Seller Parent and the
Seller pursuant to Section 10.1(c) over (ii) the amount of such Taxes paid by
the Seller Parent, the Seller or any of their Affiliates (other than the
Companies) at any time plus the amount of such Taxes paid by the Companies on or
prior to the Closing Date. Such excess initially shall be paid to the Companies
within the time prescribed by Section 10.1(e). If the amount of such Taxes paid
by the Seller Parent, the Seller or any of their Affiliates (other than the
Companies) at any time plus the amount of such Taxes paid by the Companies on or
prior to the Closing Date exceeds the amount of such Taxes apportioned to the
Seller pursuant to Section 10.1(c), the Companies shall pay to the Seller the
amount of such excess within 30 days after the Tax Return with respect to the
final Liability for such Taxes is required to be filed. The payments to be made
pursuant to this Section 10.1(d) with respect to a Straddle Period shall be
appropriately adjusted to reflect any final determination with respect to
Straddle Period Taxes.
(e) The Seller Parent and the Seller shall cause the
Companies to timely file all Tax Returns required to be filed by it on or prior
to the Closing Date and shall pay or cause to be paid all Taxes shown due
thereon. Following the Closing, the Purchasers shall cause to be timely filed
all Tax Returns required to be filed by the Companies after the Closing Date
and, subject to the rights to payment from the Seller Parent and the Seller
under the following sentence, pay or cause to be paid all Taxes shown due
thereon. With respect to any Tax Return of any Company attributable to a
Straddle Period, no later than ten (10) days prior to the date of filing such
Tax Return, the Purchasers shall furnish or cause to be furnished to the Seller
a copy of such Tax Return for the Seller's review and approval, such approval
not to be unreasonably withheld. Not later than five (5) days prior to the due
date for the payment of Taxes on any Tax Returns which the Purchasers have the
responsibility to cause to be filed pursuant to the preceding sentence, the
Seller Parent and the Seller shall pay to the Purchasers the amount of Taxes, as
reasonably determined by the Purchasers, owed by the Seller Parent and the
Seller pursuant to the provisions of Section 10.1(a).
(f) For indemnification of any Tax Claim (as defined in
Section 10.1(f)(i), the following procedures shall apply, exclusive of the
procedures in Section 9.4:
35
(i) If a claim is made by any Taxing Authority, which, if
successful, might result in an indemnity payment to any of the
Purchaser Indemnified Parties pursuant to Section 10.1(a), the
Purchasers shall promptly notify the Seller Parent and the Seller in
writing of such claim (a "Tax Claim").
(ii) With respect to any Tax Claim (other than a Tax Claim
relating solely to Taxes of the Companies for a Straddle Period), the
Seller Parent and the Seller shall control all proceedings taken in
connection with such Tax Claim (including selection of counsel) and,
without limiting the foregoing, may in its sole discretion pursue or
forego any and all administrative appeals, proceedings, hearings and
conferences with any Taxing Authority with respect thereto, and may, in
their sole discretion, either pay the Tax claimed and xxx for a refund
where applicable Law permits such refund suits or contest the Tax Claim
in any permissible manner. For this purpose, the Companies agree to
promptly issue the necessary Powers of Attorney to counsel selected by
the Seller Parent and the Seller. The Seller Parent, the Seller and the
Purchasers shall jointly control all proceedings taken in connection
with any Tax Claim relating solely to Taxes of the Companies for a
Straddle Period; provided, however, that (A) the Purchasers and counsel
of their own choosing shall have the right to participate fully in all
aspects of the prosecution or defense of such Tax Claim and (B) neither
the Seller Parent nor the Seller nor the Purchasers shall settle any
such Tax Claim without prior written consent of the other, such consent
not to be unreasonably withheld. Except as otherwise provided in this
Agreement, the Purchasers shall control all other proceedings with
respect to all other disputes relating to Taxes. For the avoidance of
doubt, the Seller Parent and the Seller shall pay all fees and expenses
incurred in connection with the Tax Claim under their control. Such
expenses will include the actual premium (Prima) if any, required to be
paid to a Mexican bonding company for the issuance of any required
bonds (subject to the refund provisions of Section 10.2), which bonds
the Companies, at the sole cost and expense of the Seller Parent and
the Seller, shall cooperate with the Seller Parent and the Seller in
obtaining; provided, however, that the Companies shall not be required
to provide any security or warranty with respect thereto unless the
Seller provides the Companies with a letter of credit in the amount of
such security in favor of the Companies in form and substance
satisfactory to the Companies.
(iii) The Purchasers and the Companies shall cooperate with
the Seller Parent and the Seller in contesting any Tax Claim, such
cooperation shall include the retention and (upon the Seller's request)
the provision to the Seller Parent and Seller of records and
information which are reasonably relevant to such Tax Claim, and making
employees available on a mutually convenient basis to provide
additional information or explanation of any material provided
hereunder or to testify at proceedings relating to such Tax Claim.
(iv) In no case shall any of the Purchaser Indemnified
Parties settle or otherwise compromise any Tax Claim which might result
in an indemnity
36
payment under Section 10.1(a) without the prior written consent of the
Seller Parent and the Seller.
10.2 Refunds. The Seller Parent and the Seller shall be
entitled to, and the Purchasers or the Companies shall promptly pay to the
Seller Parent and the Seller, any refunds of Taxes received on account of (i)
Taxes for any taxable period ending on or before the Closing Date or (ii) Taxes
for which the Seller Parent and the Seller made a payment to any of the
Purchaser Indemnified Parties pursuant to Section 10.1(a). For the avoidance of
doubt, the Seller shall be entitled to, and upon receipt thereof the Purchaser
and/or the Companies shall promptly pay to the Seller, any amounts received by
the Purchaser or the Companies on account of reimbursement of the Guarantees
"Fianzas" posted by the Companies prior to the date hereof in connection with
tax procedures initiated against the Companies.
10.3 Disputes. Any dispute as to any matter covered hereby
shall be resolved by an independent accounting firm mutually acceptable to the
Seller and the Purchasers. The fees and expenses of such accounting firm shall
be borne equally by the Seller, on the one hand, and the Purchasers on the
other. If any dispute with respect to a Tax Return is not resolved prior to the
due date of such Tax Return, such Tax Return shall be filed in the manner which
the party responsible for preparing such Tax Return deems correct provided that
such filing shall not otherwise prejudice any rights of any party under this
Article X.
10.4 Payment of Sales, Use or Similar Taxes. All sales,
use, transfer, intangible, recordation, documentary stamp or similar Taxes or
charges, of any nature whatsoever, applicable to, or resulting from, the
transactions contemplated by this Agreement shall be borne by the Purchasers;
provided, however, that the Seller Parent and the Seller hereby assume the
responsibility of determining and paying capital gains taxes or other Taxes
imposed on the net income of the Seller Parent and the Seller, in accordance
with Article 190 of the Mexican Income Tax Law (Ley de Impuesto Sobre la Renta),
and therefore agree to retain certified public accountants and appoint such
accountants to make the determination of the taxable gain and related income
taxes arising from the transfer of the Equity Interests and to appoint the
Sellers' Legal Representative to make payment thereof to the Mexican Taxing
Authorities.
10.5 Tax Treatment of Indemnity Payments. The Seller and
the Purchasers agree to treat any indemnity payment made pursuant to this
Article X as an adjustment to the Purchase Price for federal, state, local and
foreign income tax purposes, unless a final determination with respect to the
indemnified party or any of its Affiliates causes any such payment not to be
treated as an adjustment to the Purchase Price for income tax purposes.
10.6 Exclusivity. The indemnification provided for in this
Article X shall be the sole remedy for any claim in respect of Taxes. In the
event of a conflict between the provisions of this Article X, on the one hand,
and the provisions of Article IX, on the other, the provisions of this Article X
shall control.
37
ARTICLE XI
MISCELLANEOUS
11.1 Expenses. Except as otherwise provided in this
Agreement, each of the Seller Parent, the Seller and the Purchasers shall bear
its own expenses incurred in connection with the negotiation and execution of
this Agreement and each other agreement, document and instrument contemplated by
this Agreement and the consummation of the transactions contemplated hereby and
thereby.
11.2 Jurisdiction; Consent to Service of Process.
(a) The Seller Parent and the Seller, on behalf of
themselves and the other Seller Indemnified Parties, and the Purchasers, on
behalf of themselves and the other Purchaser Indemnified Parties, hereby
irrevocably submit to the exclusive personal jurisdiction of the United States
District Court for the Southern District of New York sitting in New York County
or the Commercial Division, Civil Branch of the Supreme Court of the State of
New York sitting in New York County (and any appellate court from any thereof)
over any dispute arising out of or relating to this Agreement or any of the
transactions contemplated hereby, and the Seller Parent and the Seller, on
behalf of themselves and the other Seller Indemnified Parties, and the
Purchasers, on behalf of themselves and the other Purchaser Indemnified Parties,
hereby irrevocably agrees that all claims in respect of such dispute or any
suit, action or proceeding related thereto may be heard and determined in any
such court. The Seller Parent and the Seller, on behalf of themselves and the
other Seller Indemnified Parties, and the Purchasers, on behalf of themselves
and the Purchaser Indemnified Parties, hereby irrevocably waive, to the fullest
extent permitted by applicable Law, any objection that they may now or hereafter
have to the laying of venue of any such dispute brought in such court or any
defense of inconvenient forum for the maintenance of such dispute. The Seller
Parent and the Seller, on behalf of themselves and the other Seller Indemnified
Parties, and the Purchasers, on behalf of themselves and the other Purchaser
Indemnified Parties, agree that a judgment in any such dispute may be enforced
in other jurisdictions by suit on the judgment or in any other manner provided
by Law.
(b) The Seller Parent and the Seller, on behalf of
themselves and the other Seller Indemnified Parties, and the Purchasers, on
behalf of themselves and the other Purchaser Indemnified Parties, hereby consent
to process being served by any party to this Agreement in any suit, action or
proceeding by the delivery of a copy thereof in accordance with the provisions
of Section 11.2.
(c) THE SELLER PARENT AND THE SELLER, ON BEHALF OF
THEMSELVES AND THE OTHER SELLER INDEMNIFIED PARTIES, AND THE PURCHASERS, ON
BEHALF OF THEMSELVES AND THE OTHER PURCHASER INDEMNIFIED PARTIES, HEREBY
IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF, RELATED TO OR IN CONNECTION WITH THIS AGREEMENT.
38
11.3 Entire Agreement; Amendments and Waivers.
(a) This Agreement (including the schedules and exhibits
hereto), the Transition Services Agreement and the Confidentiality Agreement
represent the entire understanding and agreement between the parties hereto with
respect to the subject matter hereof and thereof. Notwithstanding anything
contained in this Agreement to the contrary, the Purchasers acknowledge and
agree that the Seller Parent and the Seller are not making any representations
or warranties whatsoever, express or implied, beyond those expressly given by
the Seller Parent and the Seller in Article V (as modified by the Schedules
hereto), and the Purchasers acknowledge and agree that, except for the
representations and warranties contained therein, the assets and the business of
the Companies are being transferred on a "where is" and, as to condition, "as
is" basis. Any claims the Purchasers may have for breach of representation or
warranty shall be based solely on the representations and warranties of the
Seller Parent and the Seller set forth in Article V (as modified by the
Schedules hereto).
(b) This Agreement can be amended, supplemented or
changed, and any provision hereof can be waived, only by written instrument
making specific reference to this Agreement signed by the party against whom
enforcement of any such amendment, supplement, modification or waiver is sought.
No action taken pursuant to this Agreement, including any investigation by or on
behalf of any party, shall be deemed to constitute a waiver by the party taking
such action of compliance with any representation, warranty, covenant or
agreement contained herein. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a further or
continuing waiver of such breach or as a waiver of any other or subsequent
breach. No failure on the part of any party to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of such right, power or remedy
by such party preclude any other or further exercise thereof or the exercise of
any other right, power or remedy.
11.4 Governing Law. This Agreement, the rights and
obligations of the parties under this Agreement, and any claim or controversy
directly or indirectly based upon or arising out of this Agreement or the
transactions contemplated by this Agreement (whether based upon contact, tort or
any other theory), including all matters of construction, validity and
performance, shall be governed by and construed in accordance with the internal
laws of the State of New York, without regard to any conflict of laws provision
that would require the application of the Law of any other jurisdiction.
11.5 Notices. All notices and other communications under
this Agreement shall be in writing and shall be deemed given (i) when delivered
personally by hand (with written confirmation of receipt), (ii) when sent by
facsimile (with written confirmation of transmission) or (iii) one Business Day
following the day sent by overnight courier (with written confirmation of
receipt), in each case at the following addresses and facsimile numbers (or to
such other address or facsimile number as a party may have specified by notice
given to the other party pursuant to this provision):
39
If to the Seller Parent and the Seller, to:
International Wire Group, Inc.
00 Xxxxxxx Xxx.
Xxxxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxxx X. Xxxx
With a copy (which shall not constitute notice) to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Facsimile: 000-000-0000
Attention: R. Xxxxx Xxxxx
If to the Purchasers, to:
Draka Holding N.V.
Xxxxxxxxxx 0, 0000 XX Xxxxxxxxx
X.X. Xxx 000, 0000 XX Xxxxxxxxx
Xxx Xxxxxxxxxxx
Facsimile: (31)(00)000-0000
Attention: Xxxxxxxxx Xxxxxx
With a copy (which shall not constitute notice) to:
Xxxxx & Overy LLP
1221 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxxxx Xxxxxxxx
11.6 Severability. If any term or other provision of this
Agreement is invalid, illegal, or incapable of being enforced by any law or
public policy, all other terms or provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal, or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner in order that the transactions contemplated hereby are consummated as
originally contemplated to the greatest extent possible.
40
11.7 Binding Effect; Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns. Nothing in this Agreement shall create or be
deemed to create any third party beneficiary rights in any person or entity not
a party to this Agreement except as provided below. No assignment of this
Agreement or of any rights or obligations hereunder may be made by the Seller
Parent, the Seller or the Purchasers, directly or indirectly (by operation of
law or otherwise), without the prior written consent of the other parties hereto
and any attempted assignment without the required consents shall be void. No
assignment of any obligations hereunder shall relieve the parties hereto of any
such obligations. Upon any such permitted assignment, the references in this
Agreement to the Purchasers shall also apply to any such assignee unless the
context otherwise requires.
11.8 Non-Recourse. No past, present or future director,
officer, employee, incorporator, member, partner, stockholder, Affiliate, agent,
attorney or representative of the Seller Parent, the Seller, the Companies, the
Purchasers or any of their respective Affiliates (other than the Seller Parent,
the Seller and the Purchasers) shall have any Liability for any Liabilities of
the Seller Parent, the Seller, the Companies or the Purchasers under this
Agreement of or for any claim based on, in respect of, or by reason of, the
transactions contemplated hereby and thereby.
11.9 Counterparts. This Agreement may be executed in one
or more counterparts, each of which will be deemed to be an original copy of
this Agreement and all of which, when taken together, will be deemed to
constitute one and the same agreement.
11.10 Further Assurances. Each party covenants that at any
time, and from time to time, after the Closing Date, it will execute such
additional instruments and take such actions as may be reasonably requested by
the other parties to confirm or perfect or otherwise carry out the intent and
purposes of this Agreement.
** REMAINDER OF PAGE INTENTIONALLY LEFT BLANK **
41
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective authorized officers, as of the date
first written above.
DRAKA MEXICO HOLDING, S.A. DE C.V.
By: /s/ X. Xxxxxxxxx
--------------------------------
Name: X. Xxxxxxxxx
Title: Attorney-in-Fact
DRAKA HOLDING N.V.
By: /s/ X. Xxxxxx
--------------------------------
Name: X. Xxxxxx
Title: Chief Executive Officer
INTERNATIONAL WIRE GROUP, INC.
By: /s/ Xxxxxx X. Xxxx
----------------------------------------
Name: Xxxxxx X. Xxxx
Title: Chief Executive Officer
WIRE TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxx
----------------------------------------
Name: Xxxxxx X. Xxxx
Title: Chief Executive Officer
42
EXHIBIT A
---------
ASSIGNMENT AND RELEASE
----------------------
See attached.
A-1
EXHIBIT A
ASSIGNMENT AND RELEASE
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of [___], 2006
(this "Agreement"), among IWG Durango, S. de X.X. de C.V., a sociedad de
responsabilidad limitada de capital variable organized under the laws of Mexico
(the "Company"), International Wire Group, Inc., a Delaware corporation (the
"Seller Parent"), and Draka Holding N.V., a public limited company existing
under the laws of The Netherlands (the "Purchaser").
W I T N E S S E T H:
WHEREAS, Seller Parent, Seller Parent's subsidiary, Wire
Technologies, Inc., an Indiana corporation (the "Seller"), and the Purchaser,
and are parties to a Purchase Agreement, dated as of [_______], 2006 (the
"Purchase Agreement"), providing for, among other things, the sale of the
Company;
WHEREAS, the Seller Parent and the Company are parties to a
Maquila and Technical Assistance Agreement, dated as of November 26, 2001,
between the Seller Parent and the Company (the "Contract"); and
WHEREAS, in accordance with the terms of the Purchase
Agreement, the Seller and the Purchaser have agreed to enter into this
Agreement, providing for (a) the assignment from the Seller Parent to the
Purchaser of all of the Seller Parent's right, title and interest in, under and
to the Contract, (b) the acceptance by the Purchaser of such assignment and the
assumption by the Purchaser of all obligations to be performed by the Seller
Parent under the Contract from and after the Closing Date and (c) the release of
the Company by the Seller Parent and the release of the Seller Parent by the
Company.
NOW, THEREFORE, in consideration of the foregoing and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound hereby, agree as
follows:
1. Assignment. In accordance with and subject to the terms of
the Agreement, the Seller Parent hereby sells, assigns, transfers and conveys to
the Purchaser all of the Seller Parent's right, title and interest in, under and
to the Contract.
2. Acceptance and Assumption. In accordance with and subject
to the terms of the Agreement the Purchaser hereby (a) purchases and accepts the
assignment, transfer and conveyance of the Seller Parent's right, title and
interests in, under and to the Contract; (b) unconditionally and irrevocably
assumes, undertakes and agrees, subject to valid claims and defenses, to pay,
satisfy, perform and discharge in full, as and when due, and release and
discharge the Seller Parent and its successors and assigns completely and
forever from, all obligations and liabilities of any kind arising out of, or
required to be performed under, the Contract from and after the Closing Date;
and
A-2
(c) unconditionally and irrevocably assumes, undertakes and agrees to pay,
satisfy all obligations under the Contract.
3. Release. The Seller Parent hereby releases the Company, and
the Company hereby releases the Seller Parent, from any Liabilities under the
Contract.
4. Parties in Interest. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
5. Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, and all of which together shall constitute one and the
same instrument.
6. Governing Law. This Agreement, the rights and obligations
of the parties under this Agreement, and any claim or controversy directly or
indirectly based upon or arising out of this Agreement or the transactions
contemplated by this Agreement (whether based upon contact, tort or any other
theory), including all matters of construction, validity and performance, shall
be governed by and construed in accordance with the internal laws of the State
of New York, without regard to any conflict of laws provision that would require
the application of the Law of any other jurisdiction.
8. Definitions. Capitalized terms used but not defined herein
shall have the meanings ascribed to such terms in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
A-3
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of the date first written above.
INTERNATIONAL WIRE GROUP, INC.
By:
---------------------------------------
Name:
Title:
IWG DURANGO, S. DE X.X. DE C.V.
By:
---------------------------------------
Name:
Title:
DRAKA HOLDING N.V.
By:
---------------------------------------
Name:
Title:
A-4
EXHIBIT B
---------
TRANSITION SERVICES AGREEMENT
-----------------------------
See attached.
B-1
TRANSITION SERVICES AGREEMENT
This Transition Services Agreement (this "Agreement"), dated as of
________, 2006, is by and between Draka Holding N.V., a public limited company
existing under the laws of The Netherlands ("Purchaser") and International Wire
Group, Inc., a Delaware corporation (the "Seller Parent").
RECITALS
WHEREAS, the Purchaser, the Seller Parent and Wire Technologies, Inc., an
Indiana corporation (the "Seller") are parties to that certain Stock Purchase
Agreement, dated as of June 28, 2006 (the "Purchase Agreement"), pursuant to
which, among other things, Purchaser is acquiring IWG-Philippines, Incorporated,
a corporation organized under the laws of the Philippines (the "Cebu Company");
WHEREAS, the Purchaser, Draka Mexico Holding, S.A. de C.V., a sociedad
anonima de capital variable organized under the laws of Mexico, the Seller
Parent and the Seller are parties to that certain Purchase Agreement, dated as
of June 28, 2006, pursuant to which, among other things, Purchaser is acquiring
(i) IWG Services Company, S. de X.X. de C.V., a sociedad de responsabilidad
limitada de capital variable organized under the laws of Mexico ("IWG
Services"), (ii) Cables Durango, S. de X.X. de C.V., a sociedad de
responsabilidad limitada de capital variable organized under the laws of Mexico
("Cables Durango"), and (iii) IWG Durango, S. de X.X. de C.V., a sociedad de
responsabilidad limitada de capital variable organized under the laws of Mexico
("IWG Durango", together with the Cebu Company, Cables Durango and IWG Services,
individually, a "Company", and collectively, the "Companies");
WHEREAS, the Purchaser desires to obtain from the Seller Parent, on the
terms and conditions set forth herein, certain services in connection with the
operation of the Companies for the time periods set forth herein, and the Seller
Parent is willing to provide to the Companies, on the terms and conditions set
forth herein, such services.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements set forth herein, the Seller Parent and the Purchaser hereby
agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.1 Definitions. Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to such terms in the Purchase
Agreement. As used in this Agreement and the Schedules attached hereto the
following terms will have the following meanings, applicable both to the
singular and the plural forms of the terms described:
"Agreement" has the meaning ascribed thereto in the preamble hereto, as
such agreement may be amended and supplemented from time to time in accordance
with its terms.
"Cables Durango" has the meaning ascribed thereto in the recitals to this
Agreement.
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"Company" has the meaning ascribed thereto in the recitals to this
Agreement.
"Confidential Information" shall mean non-public information about the
disclosing party's or any of its Affiliates' businesses or activities that is
confidential, which shall include, without limitation, all business, financial,
technical and other information of the disclosing party or its Affiliates that
is marked or designated "confidential" or that by its nature or the
circumstances surrounding its disclosure should reasonably be regarded as
confidential. Confidential Information includes not only written or other
tangible information, but also information transferred orally, visually,
electronically or by any other means. Confidential Information shall not include
information that (i) is in or enters the public domain without breach of this
Agreement, (ii) the receiving party lawfully receives from a third party without
restriction on disclosure and, to the receiving party's knowledge, without
breach of a nondisclosure obligation, or (iii) is independently developed by the
receiving party, without breach of this agreement.
"Event of Force Majeure" has the meaning ascribed thereto in Section 2.3.
"Losses" has the meaning ascribed thereto in Section 4.1.
"IWG Durango" has the meaning ascribed thereto in the recitals to this
Agreement.
"IWG Services" has the meaning ascribed thereto in the recitals to this
Agreement.
"Outsourced Service" has the meaning ascribed thereto in Section 2.2.
"Purchase Agreement" has the meaning ascribed thereto in the recitals to
this Agreement.
"Purchaser" has the meaning ascribed thereto in the recitals to this
Agreement.
"Seller" has the meaning ascribed thereto in the recitals to this
Agreement.
"Seller Parent" has the meaning ascribed thereto in the recitals to this
Agreement.
"Seller Parent Entities" means the Seller Parent and its Subsidiaries
providing Services hereunder and "Seller Parent Entity" shall mean any of the
Seller Parent Entities.
"Seller Parent Indemnified Person" has the meaning ascribed thereto in
Section 4.1.
"Service Charges" has the meaning ascribed thereto in Section 3.1.
"Services" has the meaning ascribed thereto in Section 2.1.
"Term" has the meaning ascribed thereto in Section 5.1.
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Section 1.2 Internal References. References to Articles, Sections and
paragraphs shall refer to the corresponding articles, sections and paragraphs in
this Agreement and references to the parties shall mean the parties to this
Agreement.
ARTICLE II.
PURCHASE AND SALE OF SERVICES
Section 2.1 Purchase and Sale of Services.
(a) On the terms and subject to the conditions of this Agreement
and in consideration of the Service Charges and other consideration described
below, Seller Parent agrees to provide or cause to be provided to the Companies,
during the Term of this Agreement, the services described in Schedule I in a
manner and level of service that is at least commercially reasonable and, where
applicable, in a manner and relative level of service consistent in all material
respects with that provided by the Seller Parent or its Subsidiaries to the
Companies prior to the date of this Agreement (the "Services").
(b) At its option, the Seller Parent may cause any Service it is
required to provide hereunder to be provided by any other Seller Parent Entity,
provided that such transfer shall not release Seller Parent from its obligations
hereunder.
Section 2.2 Services Performed by Third Parties. With the consent of the
Purchaser (such consent not to be unreasonably withheld), the Seller Parent may
cause any Service it is required to provide hereunder to be provided by any
third party that is providing, or may from time to time provide, the same or
similar services for the Seller Parent (an "Outsourced Service"). The Seller
Parent shall remain responsible, in accordance with the terms of this Agreement,
for the performance of any Service it causes to be provided pursuant to this
Section 2.2.
Section 2.3 Force Majeure. The Seller Parent shall not be required to
provide any Service to the extent the performance of such Service becomes
impracticable as a result of a cause or causes outside the reasonable control of
the Seller Parent or to the extent the provision of such Service would require
the Seller Parent to violate any applicable Law. The Seller Parent shall have no
obligation to perform or cause the Services to be performed if its failure to do
so is primarily caused by or primarily results from any act of God, governmental
action, natural disaster, strike, failure of essential equipment or any other
cause or circumstance beyond the control of the Seller Parent or, if applicable,
third-party providers of services to the Seller Parent, and such failure to
perform continues for more than three (3) consecutive days (each, an "Event of
Force Majeure"). The Seller Parent will notify the Purchaser, promptly upon
becoming aware thereof, of any Event of Force Majeure affecting the provision of
its Services to the Companies. The Seller Parent agrees that following any Event
of Force Majeure, the Purchaser shall have no obligation to pay for the Services
affected thereby and the Seller Parent will use its commercially reasonable
efforts to restore such Services as soon as reasonably practicable.
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ARTICLE III.
SERVICE CHARGES
Section 3.1 Service Charges. The charge for each Service provided to the
Companies hereunder directly by the Seller Parent shall be equal to the amount
indicated, or determined as set forth, whether as a monthly rate, a per service
charge, or otherwise, in Schedule I hereto for such Service (the "Service
Charges"). In the event that a Service Charge is not specified in Schedule I
hereto for the provision of a Service, the parties hereby acknowledge and agree
that they shall negotiate in good faith to determine such Service Charge based
on the fully burdened cost actually incurred by the Seller Parent of such
Service.
Section 3.2 Invoicing and Settlement of Costs.
(a) The Seller Parent shall invoice the Purchaser for all Service
Charges for each calendar month or any portion thereof, as applicable, within
thirty (30) days following the end of such calendar month, provided that any
failure by the Seller Parent to provide an invoice within such time period shall
not relieve the Purchaser of its obligation to pay an invoice received after
such date. The Purchaser shall only be required to pay the Seller Parent a pro
rata portion of the monthly rate for any Service that does not begin on the
first Business Day of the month, or for any Service that is terminated prior to
the end of the last Business Day of the month in accordance with Schedule I
attached hereto, plus the costs for any long-term commitments entered into by
the Seller Parent Entities in contemplation of this Agreement. All invoices
shall reflect in reasonable detail a description of the Service performed.
(b) Subject to Section 3.2(d), the Purchaser shall pay within
thirty (30) days following its receipt of any invoice from the Seller Parent
pursuant to paragraph (a), by check or wire transfer of immediately available
funds payable to the order of the Seller Parent and without set off, all amounts
invoiced by the Seller Parent during the preceding calendar month. Interest will
be payable on past due payments at a rate equal to one percent (1.0%) per month
from the due date thereof, not to exceed the maximum rate permitted by Law.
(c) Any transition, excise, sales, use or similar tax charged to,
assessed on or incurred by the rendering of the services listed on Schedule I
hereto shall be the responsibility of the Purchaser and shall be paid to the
Seller Parent in addition to the Service Charges; provided, however, that each
party shall be responsible for its own income taxes.
(d) In the event of a dispute as to the propriety of the amount
invoiced, the Purchaser shall pay all undisputed amounts, but shall be entitled
to withhold payment of any amount in dispute and shall notify the Seller Parent
within ten (10) Business Days from receipt of any disputed invoice of the
disputed amount and the reasons each such charge is disputed by the Purchaser.
The Seller Parent shall provide or cause to be provided to the Purchaser records
relating to the disputed amount so as to enable the parties to resolve the
dispute. The parties shall use reasonable efforts to resolve any such dispute
promptly.
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ARTICLE IV.
INDEMNIFICATION AND EXCULPATION
Section 4.1 Indemnification. The Purchaser and the Companies shall
indemnify and hold harmless each Seller Parent Entity and their respective
directors, officers, employees, Affiliates, stockholders, agents, attorneys,
representatives, successors and permitted assigns (each, a "Seller Parent
Indemnified Person") from and against any claims, damages (excluding special
incidental, or consequential damages unless such damages are awarded to a third
party) losses, obligations, liabilities, costs and expenses (including, without
limitation, reasonable attorneys' fees), net of any insurance coverage received
by such Seller Parent Indemnified Person and excluding any expenses that have
been recovered under Section 3.1 (collectively, "Losses"), suffered by Seller
Parent Indemnified Person and arising out of or in connection with Services
rendered or to be rendered by any Seller Parent Indemnified Person pursuant to
this Agreement or the transactions contemplated hereby except to the extent that
such Losses are the result of the bad faith, gross negligence or willful
misconduct of any employee, officer or director of any Seller Parent Entity.
Section 4.2 Disclaimer of Warranties. The Seller Parent disclaims all
warranties, express or implied, including, but not limited to, the implied
warranties of merchantability of fitness for a particular purpose, with respect
to the Services. The Seller Parent makes no representations and warranties as to
the quality, suitability or adequacy of the Services for any purpose or use.
Section 4.3 Limitation of Liability. No Seller Parent Entity shall have
any liability to the Purchaser, the Companies or any Person asserting claims on
behalf of or in right of the Purchaser or the Companies in connection with, or
as a result of, any actions or omissions of any Seller Parent Entity with
respect to this Agreement or the subject matter hereof, including without
limitation, the provision of Services (other than Losses attributable to the bad
faith, gross negligence or willful misconduct of any employee, officer or
director of the Seller Parent in connection with its obligations under this
Agreement).
ARTICLE V.
TERM AND TERMINATION
Section 5.1 Term. Except as otherwise provided in this Article V or as
otherwise agreed to by the parties in writing, this Agreement shall have an
initial term of 6 months from the date hereof (the "Term"), or such shorter or
longer period as may be provided in Schedule I attached hereto with respect to
particular Services described therein.
Section 5.2 Termination. Notwithstanding the Term of this Agreement:
(a) except where indicated to the contrary in Schedule I, the
Purchaser may at any time terminate this Agreement with respect to one or more
of the Services, in whole or in part, upon giving at least thirty (30) days
prior written notice to the Seller Parent; and
(b) the Seller Parent may terminate this Agreement with respect to
any one or more of the Services (x) by written notice to the Purchaser in the
event that (i) the Purchaser shall have failed to perform, in all material
respects, any of its material obligations under this Agreement relating to such
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Service (including, without limitation, its obligation to pay for such Service
in accordance with Article III), (ii) the Seller Parent has notified the
Purchaser in writing of such failure and (iii) such failure shall have continued
for a period of fifteen (15) days after receipt by the Purchaser of notice of
such failure or (y) in accordance with Section 6.2.
Section 5.3 Effect of Termination. Other than as required by Law, upon
termination of any Service pursuant to Section 5.2, the Seller Parent will have
no further obligation to provide the terminated Service (or any Service, in the
case of termination of this Agreement) and the Purchaser will have no obligation
to pay any fees relating to such Service or make any other payments hereunder;
provided that notwithstanding such termination, (i) the Purchaser shall remain
liable to the Seller Parent for fees owed and payable in respect of Services
provided on or prior to the effective date of the termination and costs for any
long-term commitments entered into by the Seller Parent Entities in
contemplation of this Agreement and (ii) the provisions of Articles IV, V and VI
shall survive any such termination. Notwithstanding anything herein to the
contrary, the termination of this Agreement by the Seller Parent or the
Purchaser with respect to one or more Services shall not affect the right or
obligation of the Seller Parent or the Purchaser to continue to provide or
receive the other Services.
ARTICLE VI.
MISCELLANEOUS
Section 6.1 No Agency. Nothing in this Agreement shall constitute or be
deemed to constitute a partnership or joint venture between the parties hereto
or constitute or be deemed to constitute any party the agent or employee of the
other party for any purpose whatsoever and neither party shall have authority or
power to bind the other or to contract in the name of, or create a liability
against, the other in any way or for any purpose.
Section 6.2 Companies as Sole Beneficiaries. The Purchaser acknowledges
that the Services shall be provided only with respect to the Companies as
currently operated (or any successor thereto) or as mutually agreed in writing
by the parties hereto. The Purchaser shall not request performance of any
Service for the benefit of any entity other than the Companies. The Purchaser
represents and agrees that the Purchaser will use the Services only in
accordance with applicable Law. The Seller Parent reserves the right to take all
actions, including termination of any particular Service, that the Seller Parent
reasonably believes to be necessary to ensure compliance with applicable Law,
and the Seller Parent will promptly notify the Purchaser at any time such
termination of Services is contemplated, describing in sufficient detail the
reasons for such contemplated termination.
Section 6.3 Confidentiality.
(a) Nondisclosure. Each of the Seller Parent and the Purchaser
agrees that (i) it will use any Confidential Information solely in connection
with the transaction contemplated hereby, (ii) it will not, and will cause each
of their respective Subsidiaries not to, disclose to any third party or use any
Confidential Information disclosed hereunder to such Person, except as expressly
permitted in this Agreement or in the exercise of its rights hereunder, and
(iii) it will take reasonable measures to maintain the confidentiality of all
Confidential Information of any other party in its or its Subsidiaries'
possession or control, which will in no event be less than the measures it uses
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to maintain the confidentiality of its own information of similar type and
importance.
(b) Permitted Disclosure. Notwithstanding the foregoing, each of
the Seller Parent and the Purchaser may disclose Confidential Information of any
other party (i) to the extent required by a court of competent jurisdiction or
other Governmental Body or otherwise as required by Law, provided that such
party has given such other party prior notice of such requirement when legally
permissible and to the extent reasonably possible to permit such other party to
take such legal action to prevent the disclosure as it deems reasonable,
appropriate or necessary, (ii) to employees, agents and representatives of any
provider of Outsourced Services on a "need-to-know" basis under an obligation of
confidentiality to the disclosing party to the extent necessary to provide or
access and use, as applicable, the Services, or (iii) to its or any
Subsidiaries' employees, agents, representatives, legal counsel, auditors,
accountants and advisors; provided, however, that such persons shall be
specifically informed of the confidential character of such Confidential
Information and that by receiving such information they are agreeing to be bound
by the terms of this Agreement relating to the confidential treatment of such
Confidential Information. The disclosing party must notify the other party of
any disclosure of Confidential Information made according to this subsection
(b)(i).
(c) Ownership of Confidential Information. All Confidential
Information disclosed hereunder shall be and shall remain the sole and exclusive
property of the disclosing party.
Section 6.4 Entire Agreement; Conflicts. This Agreement (including
Schedule I constituting a part of this Agreement) and any other writing signed
by the parties that specifically references this Agreement constitute the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements, understandings and negotiations, both written
and oral, between the parties with respect to the subject matter hereof. This
Agreement is not intended to confer upon any Person other than the parties
hereto and the Seller Parent Indemnified Persons any rights or remedies
hereunder. In the event any provision contained in this Agreement conflicts with
the provisions of the Purchase Agreement or any other transaction document
related thereto, the provisions of this Agreement control.
Section 6.5 Information. Subject to applicable Law and privileges, each
party hereto covenants and agrees to provide the other party with all
information regarding itself and the transactions under this Agreement that the
other party reasonably believes is required to comply with all applicable Law,
including, but not limited to, securities laws and regulations.
Section 6.6 Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed given (i) when delivered
personally by hand (with written confirmation of receipt), (ii) when sent by
facsimile (with written confirmation of transmission) or (iii) one Business Day
following the day sent by overnight courier (with written confirmation of
receipt), in each case at the following addresses and facsimile numbers (or to
such other address or facsimile number as a party may have specified by notice
given to the other party pursuant to this provision):
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If to the Seller Parent or the Seller, to:
International Wire Group, Inc.
00 Xxxxxxx Xxx.
Xxxxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxxx X. Xxxx
With a copy (which shall not constitute notice) to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Facsimile: 000-000-0000
Attention: R. Xxxxx Xxxxx
If to the Purchaser, to:
Draka Holding N.V.
Xxxxxxxxxx 0, 0000 XX Xxxxxxxxx
X.X. Xxx 000, 0000 XX Xxxxxxxxx
Xxx Xxxxxxxxxxx
Facsimile: (31)(00)000-0000
Attention: Xxxxxxxxx Xxxxxx
With a copy (which shall not constitute notice) to:
Xxxxx & Overy LLP
1221 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
Attention: A. Xxxxx Harwich
Section 6.7 Assignment. Subject to Section 2.2, this Agreement may not be
assigned by operation of law or otherwise without the express written consent of
the Seller Parent and the Purchaser (which consent may be granted or withheld in
the sole discretion of the Seller Parent and the Purchaser, as applicable).
Section 6.8 Governing Law. This Agreement, the rights and obligations of
the parties under this Agreement, and any claim or controversy directly or
indirectly based upon or arising out of this Agreement or the transactions
contemplated by this Agreement (whether based upon contact, tort or any other
theory), including all matters of construction, validity and performance, shall
be governed by and construed in accordance with the internal laws of the State
of New York, without regard to any conflict of laws provision that would require
the application of the Law of any other jurisdiction.
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Section 6.9 Jurisdiction; Consent to Service of Process.
(a) The Seller Parent and the Purchaser hereby irrevocably submit
to the competent personal jurisdiction of the United States District Court for
the Southern District of New York sitting in New York County or the Commercial
Division, Civil Branch of the Supreme Court of the State of New York sitting in
New York County (and any appellate court from any thereof) over any dispute
arising out of or relating to this Agreement or any of the transactions
contemplated hereby to the exclusion of any other courts situated elsewhere, and
the Seller Parent and the Purchaser hereby irrevocably agrees that all claims in
respect of such dispute or any suit, action or proceeding related thereto may be
heard and determined in any such court. The Seller Parent and the Purchaser
hereby irrevocably waive, to the fullest extent permitted by applicable Law, any
objection that they may now or hereafter have to the laying of venue of any such
dispute brought in such court or any defense of inconvenient forum for the
maintenance of such dispute. The Seller Parent and the Purchaser agree that a
judgment in any such dispute may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by Law.
(b) The Seller Parent and the Purchaser hereby consents to process
being served by any party to this Agreement in any suit, action or proceeding by
the delivery of a copy thereof in accordance with the provisions of Section 6.6.
(c) THE SELLER PARENT AND THE PURCHASER HEREBY IRREVOCABLY WAIVE
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF,
RELATED TO OR IN CONNECTION WITH THIS AGREEMENT.
Section 6.10 Severability. If any term or other provision of this
Agreement is invalid, illegal, or incapable of being enforced by any law or
public policy, all other terms or provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal, or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner in order that the transactions contemplated hereby are consummated as
originally contemplated to the greatest extent possible.
Section 6.11 Headings. The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
Section 6.12 Amendment. This Agreement may only be amended by a written
agreement executed by both parties hereto.
Section 6.13 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
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Section 6.14 Non-Recourse. No past, present or future director, officer,
employee, incorporator, member, partner, stockholder, Affiliate, agent, attorney
or representative of the Seller Parent, the Seller, the Companies, the Purchaser
or any of their respective Affiliates (other than the Seller Parent and the
Purchaser) shall have any Liability for any Liabilities of the Seller Parent or
the Purchaser under this Agreement of or for any claim based on, in respect of,
or by reason of, the transactions contemplated hereby and thereby.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
signed by their duly authorized representatives.
DRAKA HOLDING N.V.
By:
--------------------------------
Name:
Title:
INTERNATIONAL WIRE GROUP, INC.
By:
--------------------------------
Name: Xxxxxx X. Xxxx
Title: Chief Executive Officer
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