Exhibit 10.1
EXECUTION COPY
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ASSET PURCHASE AGREEMENT
by and among
Superior Essex Communications LLC
as Purchaser
and
Belden Communications Company
and
Belden (Canada) Inc.
as Seller
Dated as of March 18, 2004
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TABLE OF CONTENTS
ARTICLE I CERTAIN DEFINITIONS
Section 1.1 Certain Definitions ........................................ 1
Section 1.2 Interpretation ............................................. 5
ARTICLE II SALE AND PURCHASE OF ASSETS
Section 2.1 Transfer of Assets ......................................... 6
Section 2.2 Assumed Liabilities ........................................ 7
Section 2.3 Purchase Price ............................................. 8
Section 2.4 Inventory Adjustment ....................................... 8
Section 2.5 Closing .................................................... 9
Section 2.6 Assumed Contracts; Additional Payment ...................... 10
Section 2.7 Failure to Deliver Equipment ............................... 11
Section 2.8 Allocation of Purchase Price ............................... 11
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER
Section 3.1 Organization ............................................... 12
Section 3.2 Authority .................................................. 12
Section 3.3 No Conflict; Required Filings and Consents ................. 12
Section 3.4 Permits; Compliance With Law ............................... 13
Section 3.5 Financial Information ...................................... 14
Section 3.6 Absence of Certain Changes or Events ....................... 14
Section 3.7 Title to and Condition of Conveyed Assets .................. 15
Section 3.8 Assumed Contracts .......................................... 15
Section 3.9 Inventory .................................................. 16
Section 3.10 Litigation ................................................. 16
Section 3.11 Brokers .................................................... 16
Section 3.12 Taxes ...................................................... 16
Section 3.13 Backlog .................................................... 17
Section 3.14 Business Records ........................................... 17
Section 3.15 Conveyed Intellectual Property ............................. 17
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER
Section 4.1 Organization ............................................... 17
Section 4.2 Authority .................................................. 17
Section 4.3 No Conflict; Required Filings and Consents ................. 18
Section 4.4 Litigation ................................................. 18
Section 4.5 Brokers .................................................... 19
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ARTICLE V COVENANTS
Section 5.1 Conduct of the Business .................................... 19
Section 5.2 Access to Information; Confidentiality; Cooperation ........ 19
Section 5.3 Appropriate Action; Consents; Filings ...................... 21
Section 5.4 Further Assurances ......................................... 22
Section 5.5 Tax Matters ................................................ 22
Section 5.6 Publicity .................................................. 23
Section 5.7 Certain Provisions Relating to the Transfer ................ 23
Section 5.8 Supplemental Disclosure .................................... 23
Section 5.9 Non competition ............................................ 23
Section 5.10 Use of Retained Intellectual Property ...................... 25
Section 5.11 Payments Following Closing ................................. 25
Section 5.12 Monthly Financial Statements ............................... 25
Section 5.13 Product Warranty Claims .................................... 26
Section 5.14 Product Returns ............................................ 26
Section 5.15 Pre Closing Inventory Production ........................... 26
Section 5.16 Key Seller Employees ....................................... 26
Section 5.17 BB Communications Service Facility, LLC .................... 28
Section 5.18 Patent Licenses ............................................ 28
ARTICLE VI CONDITIONS
Section 6.1 Conditions to Each Party's Obligations ..................... 28
Section 6.2 Conditions to Obligation of Purchaser ...................... 29
Section 6.3 Conditions to Obligation of Seller ......................... 30
ARTICLE VII TERMINATION AND AMENDMENT
Section 7.1 Termination ................................................ 30
Section 7.2 Effect of Termination ...................................... 31
Section 7.3 Amendment .................................................. 31
Section 7.4 Extension; Waiver .......................................... 31
ARTICLE VIII SURVIVAL; INDEMNIFICATION
Section 8.1 Survival Period ............................................ 32
Section 8.2 Indemnification ............................................ 32
Section 8.3 Indemnification Procedures ................................. 33
Section 8.4 Qualifications on Liability ................................ 34
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ARTICLE IX MISCELLANEOUS
Section 9.1 Notices .................................................... 35
Section 9.2 Descriptive Headings ....................................... 36
Section 9.3 Counterparts; Facsimile Signatures ......................... 36
Section 9.4 Entire Agreement ........................................... 36
Section 9.5 Fees and Expenses .......................................... 36
Section 9.6 Governing Law .............................................. 36
Section 9.7 WAIVER OF JURY TRIAL ....................................... 37
Section 9.8 Assignment ................................................. 37
Section 9.9 Parties in Interest ........................................ 37
Section 9.10 Interpretation ............................................. 37
Section 9.11 Severability ............................................... 37
Section 9.12 Bulk Sales Laws ............................................ 38
Section 9.13 Guarantee by Xxxxxx Inc. ................................... 38
Section 9.14 Guarantee by Superior Essex Inc. ........................... 38
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THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made as of
the 18th day of March, 2004, by and among Superior Essex Communications LLC, a
Delaware limited liability company ("Purchaser"), Belden Communications Company,
a Delaware corporation ("BCC"), and Belden (Canada) Inc., a Canadian corporation
("Belden Canada" and, together with BCC, "Seller").
W I T N E S S E T H:
WHEREAS, Purchaser has agreed to acquire from Seller, and
Seller has agreed to sell to Purchaser, the Conveyed Assets (as hereinafter
defined) on the terms and subject to the conditions set forth herein; and
WHEREAS, Purchaser has agreed to assume the Assumed
Liabilities on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises, covenants,
representations and warranties contained herein, and other good and valuable
consideration, the adequacy and receipt of which are hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Certain Definitions. As used in this Agreement, the following
terms shall have the following meanings:
"Affiliate" of a specified Person shall mean another Person
that directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first Person.
"Asset Based Loan Agreement" shall mean the Credit and
Security Agreement, dated as of October 9, 2003, by and among Xxxxxx Inc.,
Belden Technologies Inc., BCC, Xxxxxx Wire and Cable Company, Wachovia, N.A., US
Bank, N.A and the lenders listed therein.
"Assumed Contracts" shall mean the contracts, agreements,
purchase orders, arrangements, commitments (including forward copper purchase
commitments) and understandings listed on Section 2.1(a)(iii) of the Seller
Disclosure Letter.
"AT&T Licenses" shall mean (i) the Technology Transfer
Agreement, dated as of October 6, 1995, between AT&T Corp., as Purchaser, and
Cable Systems International Inc., as supplemented or amended through the date
hereof, and (ii) the Bilateral Patent License Agreement, dated as of October 6,
1995, between AT&T Corp.,
as Purchaser, and Cable Systems International Inc., as supplemented or amended
through the date hereof.
"BCC Xxxx of Sale" shall mean the xxxx of sale transferring to
Purchaser all of BCC's right, title and interest in and to the Conveyed Assets,
in the form of Exhibit A hereto.
"Belden Canada Xxxx of Sale" shall mean the xxxx of sale
transferring to Purchaser all of Belden Canada's right, title and interest in
and to the Conveyed Assets, in the form of Exhibit A 1 hereto.
"Business" shall mean Seller's North American
telecommunications wire and cable business consisting of the manufacture, sale
and distribution of the Products.
"Business Day" shall mean any day on which banks are not
required or authorized to close in New York, New York or Atlanta, Georgia.
"CDT Merger Agreement" shall mean the Agreement and Plan of
Merger, dated as of February 4, 2004, among Cable Design Technologies
Corporation, BC Merger Corp. and Xxxxxx Inc., as the same may be amended from
time to time.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"control" (including the terms "controlled by" and "under
common control with") shall mean, with respect to a Person, the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of
securities or as trustee or executor, by contract or credit arrangement or
otherwise.
"Conveyed Intellectual Property" shall mean all patents,
trademarks, trade names, service marks, copyrights, trade secrets, know how,
manuals, confidential information and technology, any goodwill relating to any
of the foregoing, and all rights to xxx and recover damages or obtain injunctive
relief for past and future infringement, misappropriation, violation, dilution
or breach of any of the foregoing, in each case owned, leased or licensed and
used by Seller primarily in connection with the Conveyed Assets described in
Section 2.1(a)(i) (iii), including any rights under the Patent Licenses to the
extent provided by Section 5.18 (a list of which Conveyed Intellectual Property
is set forth on Section 2.1(a)(iv) of the Seller Disclosure Letter).
"Estimated Closing Inventory Value" shall mean the aggregate
value of the Inventory, net of any inventory reserves ("required inventory
reserves"), as of the close of business on the Business Day that is three
Business Days prior to the Closing Date, determined in accordance with the
accounting principles set forth on Schedule 2.4 hereof.
"Equipment" shall mean certain machinery and equipment to the
extent selected by Purchaser from the list of machinery and equipment set forth
on Section 1.1 of the Seller Disclosure Letter and identified as such in writing
to Seller no later than
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three Business Days prior to the Closing; provided, that, in no event shall
Purchaser have the right to select machinery and equipment with a net book value
in excess of $35,000,000.
"GAAP" shall mean United States generally accepted accounting
principles consistently applied.
"Governmental Entity" shall mean a domestic or foreign court,
legislature, governmental agency, governmental commission, or a judicial or
regulatory authority of any government.
"HSR Act" shall mean the Xxxx Xxxxx Xxxxxx Antitrust
Improvements Act of 1976, as amended.
"HSR Expiration Date" shall mean the date of the expiration or
termination of the waiting period under the HSR Act applicable to the
consummation of the transactions contemplated hereby.
"Instrument of Assignment and Assumption" shall mean the
instrument evidencing BCC's assignment to Purchaser of the Assumed Liabilities,
in the form of Exhibit B hereto.
"Inventory" shall mean all inventories of the Products,
including raw materials and finished goods; provided, that, in no event shall
Purchaser have the right to any of the Inventory with a value as determined in
accordance with Schedule 2.4 hereof in excess of $50,000,000; provided, however,
that, in no event shall Inventory include any consignment raw material
inventory.
"IRS" shall mean the Internal Revenue Service.
"Law" shall mean any foreign or domestic law, including the
common law, statute, code, rule, regulation, ordinance, order, judgment, writ,
injunction or decree.
"Lien" shall mean any lien, security interest, pledge,
mortgage, claim, restriction, charge, hypothecation or other encumbrance of any
nature whatsoever.
"Losses" shall mean any and all liabilities, obligations,
losses, assessments, judgments, fines, damages, deficiencies, demands, claims,
actions, causes of action, costs and expenses (including, without limitation,
interest, penalties, court costs and reasonable attorneys' fees and expenses and
any amounts paid in investigation, defense or settlement of any of the
foregoing), of any kind, manner or nature whatsoever, whether or not arising out
of third party claims; provided, however, that consequential (including lost
profits), exemplary, special, punitive and incidental damages shall be excluded.
"Material Adverse Effect" shall mean any fact, event,
circumstance or condition (excluding general economic conditions) that has a
material adverse effect, individually or in the aggregate, on the Business or
the Conveyed Assets, taken as a
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whole, or the ability of Seller or any of their respective Subsidiaries to
perform its obligations under, or to consummate the transactions contemplated
by, this Agreement.
"Open Purchase Orders" shall have the meaning ascribed thereto
in Item 14 of Section 2.1(a)(iii) of the Seller Disclosure Letter.
"Patent Licenses" shall mean the AT&T Licenses and the
Windings License.
"Permits" shall have the meaning ascribed thereto in Section
3.4(a).
"Permitted Liens" shall mean Liens (i) for current Taxes or
government assessments, charges or claims the payment of which is not yet due,
(ii) of carriers, warehousemen, mechanics, materialmen and other similar persons
and other Liens imposed by law incurred in the ordinary course of business for
sums not yet delinquent or being contested in good faith, or (iii) relating to
deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security.
"Person" shall mean any individual, group, corporation,
partnership, limited liability company or other organization or entity.
"Pre Closing Production Period" shall mean the period from the
HSR Expiration Date until the Closing Date.
"Products" shall mean (i) copper "outside plant" wire and
cable and (ii) central office wire and cable sold under the "Xxxx Canada"
contract as specified in Schedule P.
"Progistix" means Progistix Solutions Inc., a Canadian
corporation.
"Purchaser Credit Facility" shall mean the Credit Agreement,
dated November 10, 2003, by and among Purchaser, as a borrower, Essex Group,
Inc., as a borrower, the financial institutions party thereto, as lenders, Fleet
Capital Corporation, as collateral and administrative agent for the lenders,
General Electric Capital Corporation, as syndication agent, and Fleet Securities
Inc. and GECC Capital Markets Group, Inc., as co lead arrangers.
"Related Instruments" shall mean the BCC Xxxx of Sale, the
Belden Canada Xxxx of Sale, the Instrument of Assignment and Assumption and the
Transitional Services Agreement.
"Retained Intellectual Property" shall mean all of Seller's
intellectual property other than the Conveyed Intellectual Property. For greater
certainty, Retained Intellectual Property shall include all software (including
Seller's SAP software) and the "Belden" name.
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"Seller Disclosure Letter" shall mean the disclosure letter
delivered by Seller to Purchaser in connection with the execution of this
Agreement.
"Seller's Knowledge" shall mean the knowledge, after
reasonable investigation, of the following persons: X. Xxxxx Xxxxxxxxxx; Xxxxxxx
Xxxxx; Xxxxxx Xxxx; Xxxxxx Xxxxx; Xxxxx Xxxxxxxxxx; Xxxxxxx Xxxxxxxxx; Xxxxxx
Xxxxxx; Xxxx Xxxxxx; Xxxx Xxxxxx; and Xxxxx Xxxxx.
"Subsidiary" of any Person means any corporation, partnership,
joint venture, limited liability company or other legal entity of which such
Person owns, directly or indirectly, a majority of the stock or other equity
interests the holders of which are generally entitled to vote for the election
of the Board of Directors or other governing body of such corporation or other
legal entity.
"Tax Return" shall mean any report, declaration, statement,
return or other information filed in respect of Taxes, and any claims for refund
of Taxes, including any amendments or supplements to any of the foregoing, with
any taxing authority.
"Taxes" shall mean any and all taxes, levies or other like
assessments, including, but not limited to, income, transfer, gains, gross
receipts, excise, inventory, property (real, personal or intangible), custom,
duty, sales, use, license, withholding, payroll, employment, capital stock and
franchise taxes (including any fee, assessment or other charge in the nature of
or in lieu of any tax), imposed by the United States, or any state, local or
foreign government or subdivision or agency thereof, any interest, penalties,
additions to tax or additional amounts in respect of any of the foregoing
(whether disputed or not), and any liability in respect of any tax as a result
of being a member of any affiliated, consolidated, combined, unitary or similar
group.
"Transaction Taxes" shall mean any and all sales, transfer,
filing, conveyance, recording, gross receipts, value added and similar Taxes
imposed by the United States, or any state, local or foreign government or
subdivision or agency thereof, any interest, penalties, additions to tax or
additional amounts in respect of any of the foregoing (whether disputed or not),
and any transferee or secondary liability in respect of any of the foregoing
(whether imposed by Law, contractual agreement or otherwise); provided, however,
that such term shall not include (i) any use tax or (ii) general sales tax
arising under the Canadian tax code.
"Transitional Services Agreement" shall mean the Transitional
Services Agreement to be entered into as of the Closing Date among Purchaser and
Seller in the form of Exhibit C hereto, together with all exhibits thereto.
"Windings License" shall mean that certain patent license
agreement between Cable Systems International Inc. (now BCC) and Windings, Inc.,
as supplemented or amended through the date hereof.
Section 1.2 Interpretation. Unless otherwise indicated to the
contrary in this Agreement by the context or use thereof: (a) the words,
"herein," "hereto," "hereof" and words of similar import refer to this Agreement
as a whole and not
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to any particular Section or paragraph hereof; (b) words importing the masculine
gender shall also include the feminine and neutral genders, and vice versa; (c)
words importing the singular shall also include the plural, and vice versa; and
(d) the word "including" means "including without limitation."
ARTICLE II
SALE AND PURCHASE OF ASSETS
Section 2.1 Transfer of Assets. (a) On the terms and subject
to the conditions set forth in this Agreement, at the Closing, Seller shall
sell, assign, convey, transfer and deliver to Purchaser, and Purchaser shall
purchase all of Seller's rights, title and interest in and to, the following
assets, properties and rights, wherever located (collectively, the "Conveyed
Assets"):
(i) the Inventory;
(ii) the Equipment;
(iii) all rights and interest as of the Closing in
and to the Assumed Contracts;
(iv) the Conveyed Intellectual Property;
(v) all Permits, but only to the extent Seller is
permitted to transfer such Permits; and
(vi) all books, records, files and papers ("Business
Records") to the extent they contain information relating solely to the
foregoing Conveyed Assets and, with respect to Business Records that
primarily pertain to such Conveyed Assets, copies of all such Business
Records. In the event Seller is required by Law to keep originals of
any Business Records relating solely to the Conveyed Assets, Seller
will provide copies of such materials to Purchaser. To the extent any
Business Records are in a computer format, Seller will either provide
hard copies or file transfers of such materials to Purchaser.
(b) Seller and their respective Affiliates shall
retain, and Purchaser shall not purchase from Seller and their respective
Affiliates, any and all rights, properties and assets that are not included
among the Conveyed Assets, including, without limitation: (i) any cash, cash
equivalents, bank deposits or similar cash items of Seller or their respective
Affiliates as of the Closing Date; (ii) all accounts receivable generated by
sales of Seller or their respective Affiliates; (iii) rights (including rights
of recovery) under the Assumed Contracts relating to the performance or non
performance of such Assumed Contracts prior to the Closing; (iv) all rights of
Seller under this Agreement and the Related Instruments; (v) any interests in
any real estate; (vi) all machinery and equipment not otherwise set forth on
Section 1.1 of the Seller Disclosure Letter and all machinery and equipment set
forth on Section 1.1 of the Seller Disclosure
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Letter but not selected by Purchaser as part of the Equipment; (vii) all rights
and interest in and to the Sales Incentive Agreement, dated September 26, 1997,
between Lucent Technologies Inc. (now Avaya Inc.) and Cable Systems
International Inc. (now BCC); (viii) any rights to refunds, rebates or
abatements of any Taxes with respect to the Conveyed Assets that relate to any
period ending on or prior to the Closing Date; (ix) any insurance policies of
Seller or their respective Affiliates or rights thereunder or proceeds thereof;
(x) the Retained Intellectual Property; (xi) assets under any employee benefit
or welfare plan or arrangement of Seller or any of their respective Affiliates;
(xii) all authorizations, licenses, permits, registrations, certificates,
approvals and clearances of Governmental Entities not set forth in Section
3.4(a) of the Seller Disclosure Letter; (xiii) product approvals or
certifications not included in the Conveyed Assets that are not in the name of
Seller, are specific to Seller's facilities in Phoenix, Arizona or Fort Mill,
South Carolina, or are not otherwise transferable; (xiv) any right, claim or
cause of action of Seller or their respective Affiliates against third parties
relating to the assets, properties, business or operations of the Business
arising out of or relating to transactions occurring prior to the Closing; and
(xv) any Inventory in excess of $50,000,000 as determined under Section 2.4 (the
rights, properties and assets expressly excluded from "Conveyed Assets" by this
Section 2.1(b) are referred to collectively as the "Excluded Assets").
Section 2.2 Assumed Liabilities. (a) In partial consideration
of the sale of the Conveyed Assets to Purchaser, at the Closing, Purchaser shall
assume, pay, perform, defend and discharge only the following liabilities and
obligations of Seller and their respective Affiliates to the extent related to
the Conveyed Assets, in each case only to the extent arising and relating solely
to the period after the Closing (collectively, the "Assumed Liabilities"):
(i) all liabilities and obligations under the Assumed
Contracts; and
(ii) all liabilities and obligations with respect to
the Permits.
(b) Except as otherwise provided in Section 2.2(a), Seller and
their respective Affiliates shall retain all, and Purchaser shall not assume,
pay, perform, defend or discharge any, liabilities and obligations of Seller or
any of their respective Affiliates of any and every kind whatsoever, whether
disclosed, undisclosed, direct, indirect, absolute, contingent, secured,
unsecured, accrued, known, unknown or otherwise, including (i) any liability or
obligation under any Assumed Contract attributable to any breach by Seller of
such Assumed Contract prior to the Closing Date, (ii) Seller's obligation to pay
Xxxx Canada a reel deposit of $3,168,712, (iii) Seller's obligation to provide a
retroactive price reduction for any period prior to the Closing Date if Seller
is awarded the SBC wire contract and (iv) any rebates, allowances and other
payments to customers to the extent based on sales during any period prior to
the Closing Date, whether due before or after the Closing Date, pursuant to
arrangements made by Seller (collectively, the "Excluded Liabilities").
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Section 2.3 Purchase Price. In consideration for the sale of
the Conveyed Assets, at the Closing, Purchaser shall pay to Seller a purchase
price equal to the sum of $35,000,000 plus the Estimated Closing Inventory Value
(the "Closing Purchase Price"). The Closing Purchase Price shall be payable in
cash by wire transfer of immediately available funds to an account designated in
writing by Seller at least two Business Days prior to the Closing Date. The
"Purchase Price" shall include the Closing Purchase Price (as it may be adjusted
pursuant to Section 2.4 and Section 2.7 below), any Additional Payment made by
Purchaser to Seller pursuant to Section 2.6 below and Purchaser's assumption of
the Assumed Liabilities pursuant to Section 2.2(a).
Section 2.4 Inventory Adjustment.
(a) On the Closing Date, Seller will commence, and
use its commercially reasonable efforts to promptly complete on the Closing
Date, a physical count of the Inventory and, based on such physical count, will
prepare and deliver to Purchaser, within a period of 30 days after the Closing
Date, an inventory report (by part number, quantity and value) setting forth the
aggregate value of the Inventory net of any required inventory reserves (the
"Closing Inventory Report"), such value to be determined using the accounting
principles set forth on Schedule 2.4 hereof. Purchaser may (at its own expense)
have its own independent certified public accountants or internal auditors and
quality personnel observe Seller's conduct of the physical count of the
Inventory.
(b) Following receipt of the Closing Inventory
Report, Purchaser will have a period of 30 days to review the Closing Inventory
Report. At or before the end of this review period, Purchaser will either (i)
accept the Closing Inventory Report in its entirety, in which case the aggregate
value of the Inventory net of any required inventory reserves will be deemed to
be as set forth in the Closing Inventory Report, or (ii) deliver to Seller a
reasonably detailed notice setting forth those items in the Closing Inventory
Report that Purchaser disputes (the "Disputed Items"), in which case the
aggregate value of the Inventory net of any required inventory reserves not
affected by Disputed Items will be deemed to be as set forth in the Closing
Inventory Report. Within a further period of 30 days from the end of Purchaser's
review period, the parties will attempt to resolve in good faith any Disputed
Items. Failing such resolution, any unresolved Disputed Items will be referred
for final binding resolution to the Phoenix, Arizona office of
PricewaterhouseCoopers LLP (the "Accounting Firm"). The aggregate value of
Inventory net of any required inventory reserves affected by any unresolved
Disputed Items will be deemed, in each case, to be as determined by the
Accounting Firm in accordance with the accounting principles set forth on
Schedule 2.4 hereof within 30 days of such referral. The decision of the
Accounting Firm will be non appealable and incontestable by Seller or Purchaser
and will not be subject to collateral attack for any reason. The fees and
expenses of the Accounting Firm shall be shared equally by Seller and Purchaser.
(c) Notwithstanding anything to the contrary in this
Section 2.4, the value of the Products at Progistix in the Closing Inventory
Report will be based on Progistix's most recent virtual inventory of the
Products, a copy of which shall be
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attached to the Closing Inventory Report (the "Virtual Inventory"). Following
Purchaser's receipt of the Closing Inventory Report, either party (at its own
expense) shall have the right to confirm the Virtual Inventory by notifying the
other party of its intention to do so within 30 days of receipt of the Closing
Inventory Report. Seller shall use its commercially reasonable efforts to assist
Purchaser in confirming such Virtual Inventory to the extent that Purchaser
requires the cooperation of Progistix to do so, including assisting Purchaser
and its representatives in auditing or otherwise examining the Virtual Inventory
system of Progistix and permitting Purchaser and its representatives to observe
any physical inventory count that occurs between the date hereof and the date of
the final Closing Inventory Report. If the confirming party disputes the Virtual
Inventory (the "Disputing Party"), then within a further period of 30 days from
receipt of the Disputing Party's notice, the parties will attempt to resolve the
dispute in good faith. Failing such resolution, the Virtual Inventory will be
referred for final binding resolution to the Accounting Firm. The aggregate
value of the Virtual Inventory will be deemed to be as determined by the
Accounting Firm in accordance with the accounting principles set forth on
Schedule 2.4 hereof within the later of 30 days of (x) such referral or (y) the
earliest time at which the Accounting Firm is granted access to Progistix to
determine the value of the Inventory at Progistix. The decision of the
Accounting Firm will be non appealable and incontestable by Seller or Purchaser
and will not be subject to collateral attack for any reason. The fees and
expenses of the Accounting Firm shall be shared equally by Seller and Purchaser.
(d) If the aggregate value of the Inventory
(including the Virtual Inventory) net of any required inventory reserves is
finally determined to be less than the Estimated Closing Inventory Value, then,
promptly (and in any event within two Business Days) after Purchaser's
acceptance of the Closing Inventory Report in its entirety or the resolution of
all unresolved Disputed Items, Seller will pay the amount of such difference to
Purchaser by wire transfer of immediately available funds to an account
designated in writing by Purchaser. If the aggregate value of the Inventory
(including the Virtual Inventory) net of any required inventory reserves is
finally determined to be greater than the Estimated Closing Inventory Value,
then, promptly (and in any event within two Business Days) after Purchaser's
acceptance of the Closing Inventory Report in its entirety or the resolution of
all unresolved Disputed Items, Purchaser will pay the amount of such difference
to Seller by wire transfer of immediately available funds to an account
designated in writing by Seller; provided, however, that, in no event shall the
aggregate value of the Inventory net of any required inventory reserves, as
finally determined, exceed $50,000,000. To the extent the aggregate value of
such Inventory net of any required inventory reserves exceeds $50,000,000, the
excess shall be retained by Seller (or, if already delivered to Purchaser,
promptly returned to Seller at Seller's expense) and Seller may dispose of this
excess (and any Inventory included in the inventory reserve that is retained by
Seller) in the ordinary course of business notwithstanding anything to the
contrary contained in Section 5.9 hereof.
Section 2.5 Closing. (a) The consummation of the transactions
contemplated by this Agreement (the "Closing") will take place on a date
determined by Purchaser, upon at least three Business Days' notice to Seller,
but not later than 30 days
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after the HSR Expiration Date, at 10:00 a.m. (New York City time), at the
offices of Proskauer Rose LLP, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at
such other time and place as shall be mutually agreed upon by the parties. The
date on which the Closing occurs is referred to herein as the "Closing Date."
(b) At the Closing, Seller shall deliver or cause to
be delivered to Purchaser the following: (i) a duly executed BCC Xxxx of Sale;
(ii) a duly executed Belden Canada Xxxx of Sale; (iii) a duly executed
Instrument of Assignment and Assumption; (iv) evidence of the release of all
Liens on the Conveyed Assets, in form and substance reasonably satisfactory to
Purchaser; (v) a duly executed Transitional Services Agreement; and (vi) such
other documents as may be reasonably requested by Purchaser to vest in Purchaser
good title to the Conveyed Assets and otherwise in connection with the
consummation of the transactions contemplated hereby (including all required
third party consents under the Assumed Contracts that are obtained prior to the
Closing).
(c) At the Closing, Purchaser shall deliver or cause
to be delivered to Seller the following: (i) cash in the amount of the Closing
Purchase Price by wire transfer of immediately available funds; (ii) a duly
executed BCC Xxxx of Sale; (iii) a duly executed Belden Canada Xxxx of Sale;
(iv) a duly executed Instrument of Assignment and Assumption; and (v) a duly
executed Transitional Services Agreement.
Section 2.6 Assumed Contracts; Additional Payment.
(a) Nothing in this Agreement, nor the consummation
of the transactions contemplated hereby, shall be construed as an attempt or
agreement to assign to Purchaser any Assumed Contract that by its terms or by
Law is nonassignable without the consent of a third party or a Governmental
Entity, unless and until such consent shall have been obtained. From and after
the date hereof, Seller shall use commercially reasonable efforts and shall
cooperate with Purchaser to the extent requested by Purchaser to obtain any such
necessary consents on or prior to the Closing Date and, to the extent that such
consents are not obtained, use commercially reasonable efforts to provide
Purchaser with the benefits of such Assumed Contracts under reasonable and
lawful arrangements. Except as otherwise specifically set forth in this
Agreement, Seller will have no obligation under this Section 2.6 or Section 5.18
to make any payment or incur any costs (other than immaterial costs in
connection with the exercise of commercially reasonable efforts under this
Section 2.6(a) or Section 5.18).
(b) For purposes of this Section 2.6, each of the
Assumed Contracts (other than the Open Purchase Orders) shall have the relative
weighting determined by mutual agreement of the parties hereto during the Pre
Closing Production Period, with the relative weighting of an Assumed Contract
being equal to the number (expressed as a percentage) obtained by dividing the
revenues derived from such Assumed Contract for the trailing 12 month period by
the revenues derived from all Assumed Contracts for the trailing 12 month period
(the relative weighting of each such Assumed Contract is hereinafter referred to
as its "Assigned Weighting"). On the date that is nine months after the Closing
Date (or, if such date is not a Business Day, then on
10
the next succeeding Business Day), Purchaser will pay to Seller, by wire
transfer of immediately available funds, an amount equal to the product of (i)
$10,000,000 multiplied by (ii) the Assigned Weightings of all Assumed Contracts
under which Purchaser has received the full economic benefit (as defined below),
whether such Assumed Contracts have been duly and validly assigned to Purchaser
or such benefits have been provided through other reasonable and lawful
arrangements (such payment, the "Additional Payment"). As used in the preceding
sentence, the term "full economic benefit" means that, with respect to the
Products that are the subject of an Assumed Contract, the customer under such
Assumed Contract purchases from Purchaser, during the nine month period
following the Closing Date, at least 90% of all such Products (that are the
subject of such Assumed Contract) purchased by such customer from any source
during such nine month period. Notwithstanding the foregoing, if Purchaser's
failure to receive the full economic benefit under any Assumed Contract is the
result of Purchaser's failure to comply in all material respects with the terms
of such Assumed Contract (including the customer delivery and quality
requirements therein), Seller still will be entitled to the Additional Payment
with respect to such Assumed Contract.
(c) Notwithstanding anything to the contrary
contained in this Agreement, to the extent that the full economic benefit of any
Assumed Contract is not provided to Purchaser, Purchaser shall have no
obligations pursuant to Section 2.2(a) with respect thereto.
Section 2.7 Failure to Deliver Equipment.
If any Equipment required to be delivered at the Closing is
not made available to Purchaser by Seller as a result of loss, theft or for any
other reason whatsoever (other than as a result of an intentional or willful
breach of this Agreement) ("Undeliverable Equipment"), Purchaser may elect to
either (i) reduce the Purchase Price by an amount equal to the net book value of
the Undeliverable Equipment or (ii) select, with Seller's prior written approval
(not to be unreasonably withheld or delayed), replacement equipment that
performs similar functions as the Undeliverable Equipment ("Replacement
Equipment"), whose aggregate net book value will be no greater than the
aggregate net book value of the Undeliverable Equipment, which Replacement
Equipment shall be deemed to be Equipment for all purposes of this Agreement. If
Purchaser elects to purchase Replacement Equipment, and the aggregate net book
value of the Replacement Equipment is less than the aggregate net book value of
the Undeliverable Equipment, the Purchase Price shall be decreased by such
difference. As long as Seller provides Purchaser with reasonable access to the
Equipment and Inventory after Closing, Seller shall have no obligation to
dismantle, package or deliver any Equipment or Inventory to Purchaser, absent
any requirement to do so under the Transitional Services Agreement.
Section 2.8 Allocation of Purchase Price.
The Purchase Price will be allocated among the Conveyed Assets
as set forth on a schedule to be delivered by Purchaser to Seller within 30 days
after the Closing Date. Such allocation will be in accordance with Section 1060
of the Code and will be
11
reasonably acceptable to Seller. The parties will file Tax Returns (and any
other filings with the Internal Revenue Service) consistent with such allocation
and shall not take any position which is inconsistent with such allocation.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
As of the date of this Agreement (except where a different
date is indicated) and as of the Closing Date, and except as set forth in the
Seller Disclosure Letter (as the same may be updated pursuant to Section 5.8),
Seller represents and warrants to Purchaser as follows:
Section 3.1 Organization. BCC is a corporation duly organized,
validly existing and in good standing under the Laws of the State of Delaware.
Xxxxxx Canada is a corporation duly organized, validly existing and in good
standing under the Laws of Ontario, Canada. Seller has the requisite corporate
power and authority to own, lease, operate and transfer the Conveyed Assets.
Section 3.2 Authority. Seller has the requisite corporate
power and authority to execute and deliver this Agreement and the Related
Instruments, to perform their respective obligations hereunder and thereunder
and to consummate the transactions contemplated hereby and thereby. The
execution and delivery by Seller of this Agreement and the Related Instruments,
the performance by Seller of their respective obligations hereunder and
thereunder and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all requisite corporate action on the part
of Seller and no other authorization of Seller or their respective stockholders
(including Xxxxxx Inc.) is required to authorize the execution and delivery by
Seller of this Agreement or the Related Instruments, the performance by Seller
of their respective obligations hereunder and thereunder or the consummation of
the transactions contemplated hereby or thereby. This Agreement has been validly
executed and delivered by Seller and (assuming the due authorization, execution
and delivery of this Agreement by Purchaser) constitutes, and each Related
Instrument upon execution and delivery by Seller (assuming the due
authorization, execution and delivery of each Related Instrument by Purchaser to
the extent Purchaser is a party thereto) will constitute, a legal, valid and
binding obligation of Seller, enforceable against Seller in accordance with its
terms (except to the extent that enforcement may be affected by Laws relating to
bankruptcy, reorganization, insolvency, moratorium and other Laws relating to or
affecting the rights and remedies of creditors generally and to general
principles of equity (regardless of whether considered in a proceeding in equity
or at law), including those pertaining to injunctive relief, specific
performance and other equitable remedies).
Section 3.3 No Conflict; Required Filings and Consents. (a)
Subject to Section 2.6(a) and except as set forth in Section 3.3(a) of the
Seller Disclosure Letter, the execution and delivery by Seller of this Agreement
and the Related Instruments do not, and the performance by Seller of their
respective obligations under this Agreement and the Related Instruments will
not, (i) conflict with or violate any
12
provision of Seller's certificate of incorporation or Seller's bylaws, (ii)
assuming that all consents, approvals, authorizations and permits described in
Section 3.3(b) have been obtained and that all filings and notifications
described in Section 3.3(b) have been made and any waiting periods thereunder
have terminated or expired, conflict with or violate in any material respect any
Law applicable to Seller or by which any of the Conveyed Assets is bound, or
(iii) assuming that all consents, approvals, authorizations and permits
described in Section 3.3(b) have been obtained and that all filings and
notifications described in Section 3.3(b) have been made and any waiting periods
thereunder have terminated or expired, require any consent or approval under,
result in any breach of or any loss of any benefit under, constitute a change of
control or default (or an event which with notice or lapse of time or both would
become a default) under, or give to others any right of termination, amendment,
acceleration or cancellation of, any Assumed Contract or the CDT Merger
Agreement, or result in the creation of a Lien on any Conveyed Asset.
(b) Subject to Section 2.6(a), the execution and
delivery by Seller of this Agreement and the Related Instruments do not, and the
performance by Seller of their respective obligations under this Agreement and
the Related Instruments will not, require any consent, approval, authorization
or permit of, or filing with or notification to, any Governmental Entity or
Person, except (i) as set forth in Section 3.3(b) of the Seller Disclosure
Letter, (ii) for any filings as may be required under the HSR Act (and any
associated consents, approvals, authorizations and permits) and (iii) where
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not, individually or in the aggregate,
reasonably be expected to prevent or materially impair or delay the performance
or consummation of this Agreement or the Related Instruments by Seller.
Section 3.4 Permits; Compliance With Law. (a) Section 3.4(a)
of the Seller Disclosure Letter sets forth a complete and correct list of all
material authorizations, licenses, permits, registrations, certificates,
approvals and clearances of Governmental Entities that are required to own,
lease and operate the Conveyed Assets in the manner owned, leased or operated by
Seller on the date hereof, other than those that are required to own, lease or
operate the Conveyed Assets in Phoenix, Arizona, Xxxx Xxxx, Xxxxx Xxxxxxxx xx
Xxxxxxx, Xxxxxx (the "Permits"). Seller is in possession of all such Permits,
and all such Permits are valid and in full force and effect in all material
respects. Seller is not in violation in any material respect of any such Permit.
No Governmental Entity has notified Seller in writing of its intent to revoke,
cancel, terminate, rescind, suspend, refuse to renew in the ordinary course or
modify any Permit, and no action or proceeding is pending for any such purpose.
(b) Seller's conduct of the Business has not and does
not conflict with or violate in any material respect (i) any Law by which any
Conveyed Asset is bound or affected or (ii) any Permit. There are no outstanding
notices of violations, orders, judgments, writs, injunctions or decrees of any
Governmental Entity that apply to any of the Conveyed Assets that restrict the
ownership, disposition, use or enjoyment of any of the Conveyed Assets or that
otherwise seek to impose liability or obligations on Seller with respect thereto
under applicable Law.
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Section 3.5 Financial Information. Attached as Section 3.5 of
the Seller Disclosure Letter are (i) the unaudited consolidated statement of
operating results of Seller for the year ended December 31, 2003 (the "2003
Operating Results Statement") and (ii) the unaudited consolidated statement of
operating results of Seller for the two fiscal month period ended February 22,
2004 (the "Interim Operating Results Statement" and, together with the 2003
Operating Results Statement, the "Operating Results Statements"). Each of the
Operating Results Statements (including the related notes thereto) (x) was
prepared in accordance with the books and records of Seller and in accordance
with GAAP (except as may be indicated therein, in the notes thereto or in
Section 3.5 of the Seller Disclosure Letter), (y) was used in the preparation of
the consolidated statements of income of Xxxxxx Inc. for the corresponding
periods, and (z) fairly presents the consolidated results of operations of
Seller for the periods indicated, except that the Interim Operating Results
Statement is subject to normal and recurring year end adjustments which are not
expected to be material and the Operating Results Statements do not contain
notes required by GAAP.
Section 3.6 Absence of Certain Changes or Events. Except as
set forth in Section 3.6 of the Seller Disclosure Letter, since December 31,
2003, Seller (i) has operated the Business, as it relates to the Conveyed
Assets, in the ordinary course and in a manner consistent with past practice,
(ii) has not suffered a Material Adverse Effect and (iii) has not:
(a) suffered, permitted or incurred the imposition of
any Lien (other than Permitted Liens and the Liens arising under the Asset Based
Loan Agreement) upon any of the Conveyed Assets;
(b) sold, assigned, transferred, leased, subleased,
licensed, sublicensed or otherwise disposed of any of the Conveyed Assets (other
than sales of Inventory in the ordinary course of business);
(c) suffered any destruction, damage or loss relating
to any of the Conveyed Assets, whether or not covered by insurance, which in the
aggregate exceeds $250,000;
(d) terminated or amended in any material respect any
Assumed Contract (other than the Open Purchase Orders), or allowed any Assumed
Contract (other than the Open Purchase Orders) to be cancelled other than (1) as
a result of the expiration of an Assumed Contract in accordance with its terms
or (2) where such cancellation was not attributable to any breach or default on
the part of Seller;
(e) written up or written down the value of any
Inventory other than in the ordinary course of business;
(f) surrendered, revoked or otherwise terminated any
material Permit;
(g) incurred any Assumed Liabilities, other than in
the ordinary course of business;
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(h) waived, cancelled, released, assigned or
otherwise disposed of any material claim or right relating to any of the
Conveyed Assets; or
(i) agreed, whether in writing or otherwise, to do
any of the foregoing.
Section 3.7 Title to and Condition of Conveyed Assets. Except
as set forth in Section 3.7 of the Seller Disclosure Letter, Seller has good
title to, or holds by valid lease or license, all of the Conveyed Assets, free
and clear of all Liens (other than Permitted Liens). Section 1.1 of the Seller
Disclosure Letter contains a true and complete list of all machinery and
equipment used by Seller in the conduct of the Business, except for (i)
machinery and equipment used primarily to manufacture data cable and (ii) two
group twinners previously identified by Seller. At the Closing, subject to
Section 2.6(a), Seller will transfer to Purchaser good title to, or a valid
lease or license interest in, all of the Conveyed Assets, free and clear of all
Liens (other than Permitted Liens). The Conveyed Assets are usable and are
presently being used in the ordinary course of Seller's business. The tangible
Conveyed Assets, other than Inventory, are in good and normal operating
condition, normal wear and tear excepted. Notwithstanding the foregoing, it is
understood that Seller makes no representation or warranty as to the value of
any Inventory as that item will be addressed by the parties in determining any
required inventory reserves pursuant to Section 2.4. No Subsidiary of either
Seller has any rights, title or interest in or to any of the Conveyed Assets.
Section 3.8 Assumed Contracts. True and complete copies of all
Assumed Contracts have been (or, in the case of the Open Purchase Orders, will
be) delivered or made available to Purchaser. Except as set forth in Section
3.8(a) of the Seller Disclosure Letter, each of the Assumed Contracts (other
than the Open Purchase Orders) is valid, binding and enforceable in accordance
with its terms (except to the extent that enforcement may be affected by Laws
relating to bankruptcy, reorganization, insolvency and creditors' rights and by
the availability of injunctive relief, specific performance and other equitable
remedies) on Seller and the other parties thereto and is in full force and
effect. Neither Seller nor, to Seller's Knowledge, any other party thereto is in
default in any material respect under any Assumed Contract (other than the Open
Purchase Orders) (and no condition exists that, with notice or lapse of time or
both, would become such a default by Seller or, to Seller's Knowledge, any such
other party). Except as set forth in Section 3.8(b) of the Seller Disclosure
Letter, none of the Assumed Contracts (other than the Open Purchase Orders) is
currently being renegotiated. Except as set forth in Section 3.8(c) of the
Seller Disclosure Letter, no party to any of the Assumed Contracts (other than
the Open Purchase Orders) has made, asserted or, to Seller's Knowledge, has any
defense, setoff or counterclaim under its Assumed Contract (other than the Open
Purchase Orders) or has exercised any option granted to it to cancel, terminate
or shorten the term of its Assumed Contract (other than the Open Purchase
Orders). Section 3.8(d) of the Seller Disclosure Letter sets forth a true and
complete list of all rebate, allowance, customer payment and other similar
programs currently offered by Seller in respect of any Products sold under any
of the Assumed Contracts (other than the Open Purchase Orders). Section 3.8(e)
of the Seller Disclosure Letter sets forth a description (including the amounts)
of all prepaid items under the Assumed Contracts
15
(other than the Open Purchase Orders). The aggregate amount payable to Seller
under all Open Purchase Orders, net of freight costs, will exceed the aggregate
value (determined in accordance with the accounting principles set forth on
Schedule 2.4 hereof) of the Inventory to which such Open Purchase Orders relate
by at least 10%.
Section 3.9 Inventory(i) . The values at which all Inventory
is carried on the books and records of Seller reflect Seller's historical
inventory valuation policy of stating such Inventory at the lower of cost
(determined using the last in, first out method) or market value. The Inventory
is, in all material respects, in good and merchantable condition and suitable
and useable for the purposes for which it is intended.
Section 3.10 Litigation. Except as set forth in Section 3.10
of the Seller Disclosure Letter, there is no material suit, claim, action,
proceeding or investigation pending or, to Seller's Knowledge, threatened
against Seller in respect of any of the Conveyed Assets. There is no suit,
claim, action, proceeding or investigation pending or, to Seller's Knowledge,
threatened against Seller that challenges any of the transactions contemplated
by this Agreement or the Related Instruments.
Section 3.11 Brokers. No broker, finder or investment banker
is entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Seller.
Section 3.12 Taxes. Seller has timely filed all Tax Returns
required to be filed with respect to Taxes pertaining, in whole or in part, to
the Conveyed Assets. All such Tax Returns are true, correct and complete in all
material respects, and Seller has duly paid all Taxes shown on such Tax Returns
and has paid or made adequate provision for payment of all accrued but unpaid
Taxes anticipated in respect of such Tax Returns. With respect to Taxes
pertaining to the Conveyed Assets, Seller has not received notice from a taxing
authority in a jurisdiction where Seller does not file Tax Returns that Seller
is or may be subject to taxation by such jurisdiction. There are no Tax Liens
upon any of the Conveyed Assets, except for Permitted Liens.
16
Section 3.13 Backlog. Section 3.13 of the Seller Disclosure
Letter sets forth a true and complete schedule of (i) the aggregate amount of
open purchase orders as of March 12, 2004 (the "Backlog Report") attributable to
the Business and (ii) a breakdown of the Backlog Report according to delivery
requirements into the following categories: past due; current month; next month;
following month; following month and future.
Section 3.14 Business Records. Section 3.14 of the Seller
Disclosure Letter contains a true and complete list of the Business Records that
will be made available to Purchaser on the Closing Date pursuant to Section
2.1(a)(vi) hereof. The Business Records have been maintained in accordance with
all applicable Laws.
Section 3.15 Conveyed Intellectual Property. Set forth on
Section 2.1(a)(iv) of the Seller Disclosure Letter is a true and complete list
of all Conveyed Intellectual Property, including rights under any applications
or registrations therefor, owned, leased or licensed and used by Seller
primarily in connection with the Business. All registrations listed on Section
2.1(a)(iv) of the Seller Disclosure Letter are valid and subsisting. Seller has
taken all steps reasonably necessary to maintain and protect such registrations,
including in response to any action taken by any Governmental Entity. Except as
set forth in Section 2.1(a)(iv) of the Seller Disclosure Letter, Seller does not
license any of the Conveyed Intellectual Property from any Person and has not
granted to any Person a license to use any of the Conveyed Intellectual
Property. To Seller's Knowledge, there is no infringement or improper use by any
third party of any of the Conveyed Intellectual Property. To Seller's Knowledge,
the Business as presently conducted does not cause Seller to infringe or violate
any intellectual property rights of any other Person, and Seller has not
received any notice of a claim of such infringement. Seller has not received any
notice that any of its rights in the Conveyed Intellectual Property has been
declared unenforceable or otherwise invalid by any Governmental Entity.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
Section 4.1 Organization. Purchaser is a limited liability
company duly organized, validly existing and in good standing under the Laws of
the State of Delaware.
Section 4.2 Authority. Purchaser has the requisite limited
liability company power and authority to execute and deliver this Agreement and
the Related Instruments, to perform its obligations hereunder and thereunder and
to consummate the transactions contemplated hereby and thereby. The execution
and delivery by Purchaser of this Agreement and the Related Instruments, the
performance by Purchaser of its obligations hereunder and thereunder and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all requisite limited
17
liability company action on the part of Purchaser and no other authorization of
Purchaser or its members is required to authorize the execution and delivery by
Purchaser of this Agreement or the Related Instruments, the performance by
Purchaser of its obligations hereunder or thereunder or the consummation of the
transactions contemplated hereby or thereby. This Agreement has been validly
executed and delivered by Purchaser and (assuming the due authorization,
execution and delivery of this Agreement by Seller) constitutes, and each
Related Instrument upon execution and delivery by Purchaser (assuming the due
authorization, execution and delivery of each Related Instrument by Seller to
the extent Seller is a party thereto), will constitute, a legal, valid and
binding obligation of Purchaser, enforceable against Purchaser in accordance
with its terms (except to the extent that enforcement may be affected by Laws
relating to bankruptcy, reorganization, insolvency, moratorium and other Laws
relating to or affecting the rights and remedies of creditors generally and to
general principles of equity (regardless of whether considered in a proceeding
in equity or at law), including those pertaining to injunctive relief, specific
performance and other equitable remedies).
Section 4.3 No Conflict; Required Filings and Consents. (a)
The execution and delivery by Purchaser of this Agreement and the Related
Instruments do not, and the performance by Purchaser of its obligations under
this Agreement and the Related Instruments will not, (i) conflict with or
violate any provision of Purchaser's certificate of formation or Purchaser's
operating agreement, (ii) assuming that all consents, approvals, authorizations
and permits described in Section 4.3(b) have been obtained and that all filings
and notifications described in Section 4.3(b) have been made and any waiting
periods thereunder have terminated or expired, conflict with or violate in any
material respect any Law applicable to Purchaser or (iii) assuming that all
consents, approvals, authorizations and permits described in Section 4.3(b) have
been obtained and that all filings and notifications described in Section 4.3(b)
have been made and any waiting periods thereunder have terminated or expired,
require any consent or approval under, result in any breach of, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, any material contract to which Purchaser is a party or by which
Purchaser is bound.
(b) The execution and delivery by Purchaser of this
Agreement and the Related Instruments do not, and the performance by Purchaser
of its obligations under this Agreement and the Related Instruments will not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Entity or Person, except (i) for any required
consents under the Purchaser Credit Facility, (ii) for any filings as may be
required under the HSR Act (and any associated consents, approvals,
authorizations and permits) and (iii) where failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
would not, individually or in the aggregate, reasonably be expected to prevent
or materially impair or delay the performance or consummation of this Agreement
or the Related Instruments by Purchaser.
Section 4.4 Litigation. There is no suit, claim, action,
proceeding or investigation pending or, to the knowledge of Purchaser,
threatened against Purchaser
18
that challenges any of the transactions contemplated by this Agreement or the
Related Instruments.
Section 4.5 Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Purchaser.
ARTICLE V
COVENANTS
Section 5.1 Conduct of the Business(i). During the period from
the date hereof through and including the Closing, except as otherwise expressly
provided in this Agreement, or unless Purchaser shall otherwise consent in
writing, Seller shall, and shall cause their respective Subsidiaries to, (x)
operate the Business, as it relates to the Conveyed Assets, in the ordinary
course and in a manner consistent with past practice and (y) subject to force
majeure, reasonable wear and tear and sales of Inventory in the ordinary course
of business, use their reasonable best efforts to preserve in all material
respects the Conveyed Assets. Without limiting the generality of the foregoing,
and except as otherwise expressly provided in this Agreement or the Transitional
Services Agreement, during the period from the date hereof through and including
the Closing, without the prior written consent of Purchaser, Seller shall not,
and shall cause their respective Subsidiaries not to, directly or indirectly,
take any action that would result in a breach of any representation or warranty
set forth in Section 3.6.
Section 5.2 Access to Information; Confidentiality;
Cooperation. (a) After the date hereof and prior to the Closing, Seller shall
permit Purchaser and its authorized representatives to have reasonable access
during normal business hours, upon reasonable prior notice to Seller, to
Seller's properties (including the Equipment), books, records, contracts,
commitments and personnel relating to the Conveyed Assets or the Assumed
Liabilities, and Seller shall use reasonable best efforts to furnish promptly to
Purchaser such information concerning the Conveyed Assets or the Assumed
Liabilities as Purchaser may reasonably request; provided, however, that any
such access shall be conducted in such a manner as not to unreasonably interfere
with the operation of Seller's business. Notwithstanding the foregoing, (i)
Seller need not disclose to Purchaser any information that would violate
applicable Law or any confidentiality agreement or similar agreement or
arrangement to which Seller is a party and (ii) Seller may redact such portions
of its books and records that do not directly relate to the Conveyed Assets or
the Assumed Liabilities. Seller may, as it deems reasonably necessary or
advisable, designate any competitively sensitive information provided to
Purchaser under this Section 5.2(a) as available to "outside counsel and
retained experts only."
(b) Following the Closing, for so long as such
information is retained by Purchaser (which shall be for no less than the period
of time that Purchaser customarily would retain similar information), Purchaser
shall permit Seller and their
19
respective authorized representatives to have reasonable access during normal
business hours, upon reasonable prior notice to Purchaser, to the books, records
and personnel relating to the Conveyed Assets or the Assumed Liabilities, to the
extent that such access may be reasonably required (i) in connection with the
preparation of Seller's accounting records or with any audits, (ii) in
connection with the preparation of Seller's Tax Returns or with any Tax audits,
(iii) in connection with any suit, claim (including warranty claims in respect
of any Equipment), action, proceeding or investigation relating thereto or (iv)
in connection with any regulatory filing or matter; provided, that any such
access shall be conducted in such a manner as not to unreasonably interfere with
Purchaser's business, and provided, further, that Seller shall reimburse
Purchaser promptly for all reasonable out of pocket costs and expenses incurred
by Purchaser in connection with any such request. Notwithstanding the foregoing,
(i) Purchaser need not disclose to Seller any information that would violate
applicable Law or any confidentiality agreement or similar agreement or
arrangement to which Purchaser is a party and (ii) Purchaser may redact such
portions of its books and records that do not directly relate to the Conveyed
Assets or the Assumed Liabilities. Purchaser may, as it deems reasonably
necessary or advisable, designate any competitively sensitive information
provided to Seller under this Section 5.2(b) as available to "outside counsel
and retained experts only."
(c) Seller agrees to provide, or to provide access
to, accounting work papers and to provide such management representation letters
to Purchaser and Purchaser's accountants as Purchaser or Purchaser's accountants
may reasonably request, and to otherwise reasonably cooperate with Purchaser and
Purchaser's accountants, in connection with the preparation of any audited
financial statements that may be required following the Closing; provided, that
that Purchaser shall reimburse Seller promptly for all reasonable out of pocket
costs and expenses incurred by Seller in connection with any such cooperation.
(d) Purchaser shall, and shall instruct its employees
to, at Seller's request, cooperate with Seller as may be reasonably required in
connection with the investigation and defense of any suit, claim (including
warranty claims in respect of any Equipment), action, proceeding or
investigation relating to the Conveyed Assets that is brought against Seller or
any of their respective Affiliates at any time after the Closing; provided,
however, that Seller shall reimburse Purchaser promptly for all reasonable out
of pocket costs and expenses incurred by Purchaser in connection with any such
request.
(e) Seller shall, and shall instruct their respective
employees to, at Purchaser's request, cooperate with Purchaser as may be
reasonably required in connection with the investigation and defense of any
suit, claim (including warranty claims in respect of any Equipment), action,
proceeding or investigation relating to the Conveyed Assets that is brought
against Purchaser or any of its Affiliates at any time after the Closing;
provided, however, that Purchaser shall reimburse Seller promptly for all
reasonable out of pocket costs and expenses incurred by Seller in connection
with any such request.
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Section 5.3 Appropriate Action; Consents; Filings. (a) Subject
to Section 5.3(c) hereof, Seller and Purchaser shall use their respective
reasonable best efforts to take, or cause to be taken, all actions and do, or
cause to be done, all things necessary, proper or advisable under applicable Law
or otherwise to consummate and make effective the transactions contemplated by
this Agreement as promptly as practicable, including to: (i) obtain from
Governmental Entities any consents, licenses, permits, waivers, approvals,
authorizations, clearances or orders required (A) to be obtained by Seller or
Purchaser or any of their respective Affiliates to consummate the transactions
contemplated by this Agreement or (B) to avoid any action or proceeding by any
Governmental Entity in connection with the authorization, execution and delivery
of this Agreement and to permit the consummation of the transactions
contemplated hereby to occur as promptly as practicable; (ii) reasonably oppose,
contest, appeal or otherwise seek to eliminate any impediment posed by any
Governmental Entity that would delay or prevent the consummation of the
transactions contemplated hereby; (iii) make all necessary filings, and
thereafter make any other required submissions and any voluntary submissions
that may support approvals by Governmental Entities, with respect to this
Agreement required under applicable Law; and (iv) obtain all necessary consents,
waivers, approvals and authorizations of third parties. Seller and Purchaser
shall cooperate with each other in connection with the making of all filings
referenced in the preceding sentence, including providing copies of all such
documents to the non filing party and its advisors prior to filing and, if
requested, accepting all reasonable additions, deletions or changes suggested in
connection therewith. Seller and Purchaser shall have the right to review in
advance, and, to the extent practicable and reasonable, each shall consult the
other on, all the information relating to Seller or Purchaser, as the case may
be, that appears in any filing made with, or written materials submitted to, any
third party or any Governmental Entity in connection with the transactions
contemplated by this Agreement. Seller and Purchaser may, as each deems
reasonably necessary or advisable, designate any competitively sensitive
information provided to the other under this Section 5.3(a) as available to
"outside counsel and retained experts only." Such information shall be given
only to outside counsel of the recipient. In addition, Purchaser and Seller may
redact any information from such documents shared with the other party or its
counsel that is not pertinent to the subject matter of the filing or submission.
(b) Without limiting Section 5.3(a), but subject to
Section 5.3(c), Purchaser and Seller shall use their respective reasonable best
efforts to obtain, or to cause to be obtained, any consent, substitution,
approval, authorization or amendment from, and to provide any notice to,
applicable Governmental Entities and third parties required to assign or
transfer any Conveyed Asset to Purchaser.
(c) Notwithstanding anything in this Agreement to the
contrary (including paragraphs (a) and (b) of this Section 5.3), neither
Purchaser, Seller nor any of their respective Affiliates shall be required to
commit to any divestitures, licenses or hold separate or similar arrangements
with respect to its assets or conduct of business arrangements, whether as a
condition to obtaining any approval from a Governmental Entity or any other
Person or for any other reason.
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Section 5.4 Further Assurances. From time to time following
the Closing, Seller and Purchaser shall, and shall cause their respective
Affiliates to, execute, acknowledge and deliver all such further conveyances,
notices and other instruments, and take such further actions, as may be
necessary or appropriate to assure fully to Purchaser, its successors and
assigns all of Seller's rights, title and interest in and to the Conveyed Assets
to be transferred to Purchaser under this Agreement and to otherwise make
effective the assumption of the Assumed Liabilities by Purchaser and the other
transactions contemplated hereby. Notwithstanding anything to the contrary
contained herein, Seller will discharge, or cause to be discharged, all
Permitted Liens promptly after they arise with respect to the Conveyed Assets,
unless Purchaser otherwise consents in writing; provided, that Seller shall not
be responsible for discharging any Lien with respect to the Conveyed Assets to
the extent that such Lien arises after the Closing Date as a result of any
action or omission by Purchaser or its assigns.
Section 5.5 Tax Matters. (a) Seller shall pay any and all
Transaction Taxes imposed in connection with the transfer of the Conveyed
Assets, the assumption of the Assumed Liabilities or the execution, delivery or
performance of any of the Related Instruments, and shall file such applications
and documents as shall permit any such Transaction Taxes to be assessed and paid
on or prior to the Closing Date in accordance with any available pre-sale filing
procedures.
(b) Purchaser shall pay (i) any general sales tax
(GST) arising under the Canadian tax code attributable to any of the Conveyed
Assets and (ii) any use taxes arising from Purchaser's use of the Conveyed
Assets from and after the Closing Date.
(c) Except as otherwise provided in Sections 5.5(a)
and (b) above, Seller shall pay all Taxes with respect to the Conveyed Assets,
regardless of when due and payable, (i) with respect to all taxable periods
ending on or prior to the Closing Date and (ii) with respect to all taxable
periods beginning before the Closing Date and ending after the Closing Date, but
only with respect to the portion of such periods up to and including the Closing
Date. After the Closing Date, all refunds of Taxes paid by Seller that are
attributable to any such periods shall be for the account of Seller.
(d) Except as otherwise provided in Sections 5.5(a)
and (b) above, Purchaser shall pay all Taxes with respect to the Conveyed
Assets, regardless of when due and payable, (i) with respect to all taxable
periods beginning after the Closing Date and (ii) with respect to all taxable
periods beginning before the Closing Date and ending after the Closing Date, but
only with respect to the portion of such periods commencing after the Closing
Date. All refunds of Taxes paid by Purchaser that are attributable to any such
periods shall be for the account of Purchaser.
(e) Within 90 days following the Closing Date,
Purchaser and Seller shall apportion among themselves any appropriately
proratable Tax (other than Transaction Taxes) attributable to the Conveyed
Assets, it being understood and agreed that Seller shall be responsible for any
obligations and liabilities accrued or allocable to periods prior to the close
of business on the Closing Date and Purchaser shall be
22
responsible for any obligations and liabilities accruing or allocable to periods
on and after such date and time. Based on such apportionment, Seller shall pay
Purchaser, or Purchaser shall pay Seller, as the case may be, the amount of any
such Tax determined in accordance with the foregoing. In the event that Seller
and Purchaser cannot agree upon the apportionment to be made under this Section
5.5(e), Seller and Purchaser agree to refer such matter for determination to the
Accounting Firm, and the determination of the Accounting Firm shall be final and
binding on Seller and Purchaser. The fees and expenses of the Accounting Firm
shall be shared equally by Seller and Purchaser.
Section 5.6 Publicity. Except as otherwise required by
applicable Law or applicable stock exchange requirements, neither Purchaser nor
Seller shall, and each of them shall cause their respective Affiliates,
representatives and agents not to, issue or cause the publication of any press
release or public announcement with respect to the transactions contemplated by
this Agreement without the express prior approval of the other party, which
approval shall not be unreasonably withheld or delayed.
Section 5.7 Certain Provisions Relating to the Transfer.
Except as otherwise provided in Section 2.6 or 2.7 hereof, in the event that
record or beneficial ownership or possession of any Conveyed Asset has not been
transferred to Purchaser on the Closing Date, Seller and Purchaser shall
cooperate and shall use their reasonable best efforts to transfer, or cause to
be transferred, from Seller to Purchaser such Conveyed Asset, and pending such
transfer to Purchaser, Seller shall hold such Conveyed Asset and use its
reasonable best efforts to provide to Purchaser all of the benefits and
liabilities associated with the ownership and use of such Conveyed Asset and,
accordingly, Seller shall cause such Conveyed Asset to be used or retained as
may reasonably be instructed by Purchaser.
Section 5.8 Supplemental Disclosure. Seller shall have the
right to update the Seller Disclosure Letter if it becomes aware of the
existence or occurrence of any fact or condition (which fact or condition did
not exist or occur on or prior to the date of this Agreement) that would cause
or constitute a breach of any representation or warranty had any such
representation or warranty been made as of the time of the existence, occurrence
or discovery of such fact or condition ("Seller's Supplemental Disclosure").
Notwithstanding anything herein to the contrary, Seller's Supplemental
Disclosure shall not affect any remedies available to Purchaser hereunder, and
Purchaser shall not be deemed to waive any such remedies by virtue of the
occurrence of the Closing.
Section 5.9 Non-competition
(a) From the Closing Date and for a period of five
years thereafter (the "Restricted Period"), Seller shall not (nor shall Seller
cause or permit any of their respective Affiliates to), on its own behalf or on
behalf of or in connection with any Person, directly or indirectly, in any
capacity whatsoever, by or through any Person or otherwise, manufacture, sell or
distribute any of the Products ("Competition") anywhere in the United States,
Canada, Mexico or the Caribbean Basin (the "Restricted Territory"). For the
avoidance of doubt, (i) except as otherwise expressly permitted by
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Section 5.9(b) below, the following activities shall be prohibited by the
immediately preceding sentence: directly or indirectly owning any interest in,
managing, operating, joining, controlling, lending money or rendering financial
or other assistance to or participating in or being connected with, as partner,
stockholder, consultant or otherwise, any Person that engages in Competition in
the Restricted Territory, (ii) Seller shall not be precluded from selling (or in
the case of work-in-process, completing the manufacture thereof and thereafter
selling) any Inventory existing on the Closing Date that Purchaser does not
acquire pursuant to this Agreement, and (iii) Seller and their respective
Affiliates shall not be precluded from manufacturing, selling or distributing
central office wire and cable to customers other than Xxxx Canada.
(b) Nothing in this Section 5.9 shall prevent Seller
or their respective Affiliates from acquiring, directly or indirectly, shares in
or the assets of any Person the ownership of which violates the provisions of
paragraph (a) of this Section 5.9 ("Competing Business"), if Seller or its
Affiliate shall cease to carry on or have such interest in the Competing
Business or the Person carrying on the same within six months from completion of
the relevant acquisition. Seller or its Affiliate shall not be obligated to
cease to carry on the Competing Business or to dispose of such business or such
interest within six months as so provided if such Competing Business or interest
therein is acquired by Seller or its Affiliate as part of a larger acquisition,
merger or consolidation (collectively, a "Transaction") and the value properly
attributable to the Competing Business did not at the date of the Transaction
amount to more than 15% of the value of the Transaction taken as a whole. Seller
shall give Purchaser the opportunity to acquire any Competing Business before
offering to sell such business to another party or parties; provided, however,
that if Purchaser desires to acquire such business but the parties are unable to
reach an agreement, then Seller may not offer such opportunity to any other
party or parties on more favorable terms without first presenting such more
favorable offer to Purchaser.
(c) The Restricted Period shall be extended by the
full length of any period during which Seller or any of their respective
Affiliates is in breach of any of the terms of this Section 5.9.
(d) It is expressly understood, acknowledged and
agreed by Seller that the covenants set forth in this Section 5.9 constitute an
essential element of this Agreement and that, but for such covenants, Purchaser
would not have executed and delivered this Agreement nor be willing to perform
the transactions contemplated herein.
(e) Without intending in any way to limit the
remedies available to Purchaser, Seller further acknowledges and agrees that if
Seller or any of their respective Affiliates breaches or threatens to breach any
of the covenants contained in this Section 5.9, Purchaser may seek injunctive
relief (without being required to post bond or any other undertaking as a
condition to obtaining such relief) in any court of competent jurisdiction to
restrain the breach or the threatened breach of, or otherwise specifically to
enforce, any of such covenants.
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(f) The parties agree and intend that the covenants
contained in this Section 5.9 shall be construed as a series of separate
covenants, one for each applicable county, state, country or province. Except
for geographic coverage, each such separate covenant shall be deemed identical
in terms. It is understood and agreed that, whenever possible, each provision,
term and covenant of this Section 5.9 shall be interpreted in such a manner as
to be effective and valid under applicable Law.
Section 5.10 Use of Retained Intellectual Property.
Purchaser will, as promptly as practicable after the Closing
Date, but in no event later than six months after the Closing Date, remove or
obliterate all of Seller's Retained Intellectual Property that is affixed to any
of the Conveyed Assets. Notwithstanding the foregoing, Purchaser shall be
entitled (i) for a period of six months after the Closing Date, to use any
signs, labels, shipping documents or other materials existing on the Closing
Date in connection with the Conveyed Assets and (ii) to use any Inventory
(including reels) that bears any of Seller's Retained Intellectual Property or
any name, xxxx or logo similar thereto.
Section 5.11 Payments Following Closing.
If a payment is received by Seller or any of their respective
Affiliates from any Person with respect to Inventory acquired by Purchaser under
this Agreement and sold by Purchaser after the Closing, Seller shall forward
such payment to Purchaser as promptly as practicable after receipt.
Section 5.12 Monthly Financial Statements.
With respect to each month prior to the Closing, Seller will
prepare and deliver to Purchaser, within 20 days after the end of each such
month, (i) an unaudited consolidated statement of net assets of Seller as of the
last day of such month, (ii) an unaudited consolidated statement of operating
results of Seller for such month (collectively, the "Monthly Condensed Financial
Statements"), which Monthly Condensed Financial Statements shall be certified by
the principal financial and accounting officer of Seller, and (iii) a
reconciliation of the Inventory on hand as of the last day of such month to such
statement of net assets (based on the value of such Inventory as determined in
accordance with Schedule 2.4). Each of the Monthly Condensed Financial
Statements (including the related notes thereto) (x) will be prepared in
accordance with the books and records of Seller and in accordance with GAAP
(except as may be indicated therein or in the notes thereto), and (y) will
fairly present the consolidated net assets of Seller as of the last day of the
applicable month and the consolidated results of operations of Seller for such
month, except that the Monthly Condensed Financial Statements will be subject to
normal and recurring year-end adjustments which are not expected to be material
and will not contain notes required by GAAP.
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Section 5.13 Product Warranty Claims.
Purchaser, without Seller's authorization, shall be
responsible for negotiating, compromising and settling any warranty claim
relating to any Product sold, shipped or manufactured by Seller prior to the
Closing; provided, however, that Purchaser shall (i) give Seller prior notice of
any warranty claim in excess of $10,000 and (ii) obtain Seller's prior
authorization of the resolution of any warranty claim in excess of $50,000 (in
which case Seller's authorization may not unreasonably be withheld). Seller will
reimburse Purchaser for all commercially reasonable costs incurred by Purchaser
in the replacement or repair of any non-conforming Product that is the subject
of any such warranty claim within 30 days after receipt of Purchaser's invoice
therefor. Seller shall provide reasonable assistance to Purchaser in connection
with the resolution of any such warranty claim.
Section 5.14 Product Returns.
Purchaser, without Seller's authorization, shall be
responsible for negotiating, compromising and settling any returns by customers
of all Products sold, shipped or manufactured by Seller prior to the Closing and
returned by customers after the Closing; provided, however, that Purchaser shall
(i) give Seller prior notice of any Product return in excess of $10,000 and (ii)
obtain Seller's prior authorization of the resolution of any Product return in
excess of $50,000 (in which case Seller's authorization may not unreasonably be
withheld). Seller will reimburse Purchaser for all commercially reasonable costs
(including return freight) incurred by Purchaser in the replacement of any
returned Products within 30 days after receipt of Purchaser's invoice therefor.
Section 5.15 Pre-Closing Inventory Production.
(a) Within five Business Days after the commencement
of the Pre-Closing Production Period, Seller shall deliver to Purchaser written
notice setting forth its current Inventory, by types and amounts, and backlog.
Within five Business Days after Purchaser's receipt of such notice, Purchaser
shall deliver to Seller written notice specifying its desired Inventory targets,
and Seller shall use commercially reasonable efforts to meet such targets by the
Closing; provided, however, that nothing herein shall prohibit Seller from
producing Inventory in excess of such targets.
(b) During the Pre-Closing Production Period, Seller
shall provide Purchaser and its Affiliates with access rights in accordance with
Section 5.2(a) to the extent reasonably required for Purchaser to conduct
inspections of the Inventory and to monitor manufacturing, production and any
other processes related to the Conveyed Assets, including sampling and testing
related thereto.
Section 5.16 Key Seller Employees.
(a) Within five Business Days after the commencement
of the Pre-Closing Production Period, Seller shall deliver to Purchaser written
notice setting forth the names of all non-corporate plant employees that are
then employed by Seller at
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its facilities in Phoenix, Arizona and Fort Mill, South Carolina, together with
the then current daily rate and benefits rate (not to exceed 1.25) for each such
employee and the period of time that Seller expects to continue to employ each
such employee following the Closing (such period of time being hereinafter
referred to as the "Employment Period"). The product of the then current daily
rate and benefits rate for each such employee is hereinafter referred to as such
employee's Daily Rate. Within five Business Days following Purchaser's receipt
of such notice, Purchaser shall have the right, but not the obligation, to
designate, by written notice to Seller, any such employees that Purchaser, in
its sole discretion, deems critical to the Business or to the transfer,
migration or integration of the Conveyed Assets (the "Key Seller Employees"),
and such notice shall indicate Purchaser's acceptance of the Daily Rates for
such Key Seller Employees. Purchaser shall have the right to use the Key Seller
Employees beginning after the Closing Date for a period not to exceed their
respective Employment Periods, and in any event not to exceed 180 days. The Key
Seller Employees will remain at all times on Seller's payroll, but Purchaser
shall reimburse Seller within 30 days after receipt of Seller's invoice
therefor, an amount for each of the Key Seller Employees equal to the product of
such Key Seller Employee's Daily Rate adjacent to such Key Seller Employee's
name on Seller's initial notice to Purchaser under this Section 5.16, multiplied
by the number of days that such Key Seller Employee devoted to providing service
to Purchaser under this Section 5.16. Notwithstanding anything herein to the
contrary, Purchaser acknowledges that Key Seller Employees may, in their
discretion, resign from their employment with Seller at any time. If Seller
becomes aware that any Key Seller Employee intends to resign, Seller promptly
shall notify Purchaser.
(b) Seller represents, warrants, covenants and agrees
that the transfer, migration and integration and other services provided by the
Key Seller Employees pursuant to this Section 5.16 shall be provided with the
same degree of effort, diligence, skill and care as such Key Seller Employees
currently employ in the conduct of the Business ("Seller's Standards"). However,
Seller is not in the business of providing these services and does not guarantee
that Purchaser will achieve any particular results from its use of the Key
Seller Employees pursuant to this Section 5.16. In connection with the
performance of such services and in the absence of fraud, gross negligence,
recklessness, willful misconduct or violation of law, Purchaser shall be
responsible for only such liabilities that are directly attributable to any
action or omission by any Key Seller Employee taken, or not taken, at the
express direction of Purchaser or its Affiliates. Purchaser agrees that its and
its Affiliates' sole remedy, and Seller's and their respective Affiliates'
liability, with respect to the services provided by the Key Seller Employees
pursuant to this Section 5.16 will be the reperformance of any services not
substantially performed or provided in accordance with Seller's Standards;
provided, however, that, if and only if the reperformance of any such services
will not satisfy any losses arising hereunder, Seller shall be liable therefor
subject to the limitations contained herein. Seller hereby disclaims, on behalf
of themselves and their respective Affiliates, to the fullest extent permitted
by law and except as expressly set forth in the first sentence of this Section
5.16(b), all representations and warranties of any kind whatsoever regarding the
services provided by the Key Seller Employees pursuant to this Section 5.16,
whether express, implied or statutory, including with respect to availability,
accuracy or response time. To the maximum extent permitted by applicable law and
notwithstanding any
27
provision of this Agreement to the contrary, neither party nor any of their
respective Affiliates shall be liable for any consequential (including lost
profits), exemplary, special, punitive or incidental damages in connection with
the transfer, migration or integration or other services provided under this
Section 5.16.
(c) During the Pre-Closing Production Period,
Purchaser shall have the option, but not the obligation, to offer employment to
any employee of Seller engaged in the Business after first obtaining permission
from Seller to extend any such offer; provided, however, that the terms and
conditions of any such offer shall be determined by Purchaser in its sole
discretion.
Section 5.17 BB Communications Service Facility, LLC.
At Purchaser's election, Seller shall either (i) cause its
entire membership interest, together with all associated rights, in BB
Communications Service Facility, LLC d/b/a Echelon LLC ("Echelon") to be
assigned and transferred to Purchaser at the Closing, in which case such
interest shall be deemed to be included in the Conveyed Assets, or (ii) cause
Echelon to be dissolved as promptly as practicable following the Closing, in
each case to the extent permitted by the agreement of limited liability company
of Echelon and applicable Law.
Section 5.18 Patent Licenses.
(a) Promptly following the date hereof, Seller and
Purchaser shall cooperate in good faith to determine which rights contained in
the Patent Licenses are necessary and/or useful for Purchaser to make, use or
sell the Products in connection with the Conveyed Assets. Upon such
determination, Seller shall use commercially reasonable efforts to obtain all
necessary consents and approvals under the Patent Licenses to allow Seller to
assign and transfer such rights to Purchaser at the Closing, and to the extent
that such consents and approvals are so obtained, such rights shall constitute
part of the Conveyed Intellectual Property (it being understood that any rights
under the Patent Licenses that are not so assigned shall remain with Seller).
(b) Upon Seller's request and at Seller's expense,
Purchaser shall grant Seller and its Affiliates a worldwide, royalty-free
license to use the patents included in the Conveyed Intellectual Property to
make, use and sell products, subject to Section 5.9.
ARTICLE VI
CONDITIONS
Section 6.1 Conditions to Each Party's Obligations. The
respective obligations of each party to effect the transactions contemplated by
this Agreement shall be subject to the satisfaction at or prior to the Closing
of the following conditions:
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(a) There shall not be in effect any Law or other
action of any Governmental Entity that makes illegal, enjoins or prevents the
consummation of the transactions contemplated by this Agreement.
(b) The waiting period under the HSR Act applicable
to the consummation of the transactions contemplated hereby shall have expired
or been terminated.
(c) The financing contemplated by the letter attached
hereto as Exhibit E shall have been consummated, substantially in accordance
with the terms set forth on Exhibit E, by no later than April 30, 2004.
(d) Seller shall have engaged in any decision
bargaining required by applicable Law in connection with the transactions
contemplated hereby, and such decision bargaining process shall have been
completed to the reasonable satisfaction of Purchaser and Seller; provided, that
Seller shall use its reasonable best efforts to conclude such decision
bargaining process within 30 days after the date hereof.
(e) Seller shall have received a consent or waiver,
the form of which is reasonably satisfactory to Purchaser and Seller, required
to consummate the transactions contemplated hereby from the lenders under its
Asset-Based Loan Agreement.
Section 6.2 Conditions to Obligation of Purchaser. The
obligation of Purchaser to effect the transactions contemplated by this
Agreement shall be further subject to the satisfaction at or prior to the
Closing of the following conditions, any or all of which may be waived, in whole
or in part, by Purchaser:
(a) The representations and warranties of Seller
contained in Article III of this Agreement that are qualified by reference to
materiality or Material Adverse Effect shall be true and correct in all
respects, and the representations and warranties of Seller contained in Article
III of this Agreement that are not so qualified shall be true and correct in all
material respects, at and as of the Closing Date as if made at and as of such
time (except to the extent expressly made as of an earlier date, in which case
as of such earlier date), in each case without giving effect to Seller's
Supplemental Disclosure;
(b) Seller shall have performed or complied with all
agreements and covenants required to be performed or complied with by Seller
under this Agreement at or prior to the Closing;
(c) Purchaser shall have received from Seller a
certificate, dated the Closing Date, duly executed by an executive officer of
Seller, to the effect of Section 6.2(a) and Section 6.2(b) above;
(d) Seller shall have delivered or caused to be
delivered to Purchaser each of the documents specified in Section 2.5(b) hereof;
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(e) Purchaser shall have received from Seller any
sales tax clearance certificate or similar clearances required by the State of
Arizona and the province of Ontario, Canada or, if such tax clearance
certificates are not available at the Closing, certificate(s) from such State
and province taxing authorities certifying the payment by or on behalf of Seller
of all sales taxes due on or prior to a date not more than 30 days prior to the
Closing Date (it being agreed and understood that, notwithstanding the
foregoing, if any tax clearances or certificates are not obtained prior to the
Closing, Seller shall obtain such clearances or certificates after the Closing
and shall be responsible for, and shall discharge in full, all liabilities and
obligations therefor); and
(f) Purchaser shall have received from counsel to
Seller one or more legal opinions in form and substance customary for
transactions of this type (including customary assumptions, qualifications and
limitations) and reasonably acceptable to Purchaser.
Section 6.3 Conditions to Obligation of Seller. The obligation
of Seller to effect the transactions contemplated by this Agreement shall be
further subject to the satisfaction at or prior to the Closing of the following
conditions, any or all of which may be waived, in whole or in part, by Seller:
(a) The representations and warranties of Purchaser
contained in Article IV of this Agreement that are qualified by reference to
materiality shall be true and correct in all respects, and the representations
and warranties of Purchaser contained in Article IV of this Agreement that are
not so qualified shall be true and correct in all material respects, at and as
of the Closing Date as if made at and as of such time (except to the extent
expressly made as of an earlier date, in which case as of such earlier date);
(b) Purchaser shall have performed or complied with
all agreements and covenants required to be performed or complied with by
Purchaser under this Agreement at or prior to the Closing;
(c) Seller shall have received from Purchaser a
certificate, dated the Closing Date, duly executed by an executive officer of
Purchaser, to the effect of Section 6.3(a) and Section 6.3(b) above; and
(d) Purchaser shall have delivered or caused to be
delivered to Seller each of the documents specified in Section 2.5(c) hereof.
ARTICLE VII
TERMINATION AND AMENDMENT
Section 7.1 Termination. This Agreement may be terminated at
any time prior to the Closing by:
(a) mutual written consent of Seller and Purchaser;
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(b) either Seller or Purchaser, if the Closing shall
not have occurred on or before the date that is six months after the date hereof
(the "Outside Date"); provided, however, that the right to terminate this
Agreement under this Section 7.1(b) shall not be available to a party whose
failure to perform its obligations under this Agreement has been the cause of,
or resulted in, the failure of the Closing to occur on or before the Outside
Date;
(c) either Seller or Purchaser, if a competent
Governmental Entity shall have issued a ruling, decree, order or injunction or
taken any other action which, in any such case, permanently restrains, enjoins
or prohibits the consummation of the transactions contemplated hereby and such
ruling, decree, order, injunction or other action shall have become final and
non-appealable; or
(d) either Seller or Purchaser (provided that the
terminating party is not then in material breach of any representation,
warranty, covenant or other agreement contained herein), if there shall have
been a breach of any of the representations, warranties, covenants or agreements
set forth in this Agreement on the part of the other party such that any of the
conditions set forth in Article VI would not be satisfied, such breach has not
been waived by the terminating party, and such breach has not been cured within
30 days following the terminating party's written notice of such breach to the
other party.
Section 7.2 Effect of Termination. In the event of the
termination of this Agreement pursuant to Section 7.1 hereof, this Agreement
shall forthwith become null and void and have no effect, without any liability
on the part of either party hereto or its Affiliates, directors, officers or
stockholders, other than the provisions of Article IX and Section 7.2 hereof;
provided, however, that nothing contained in this Section 7.2 shall relieve
either party to this Agreement from liability to the other party for any breach
of this Agreement.
Section 7.3 Amendment. This Agreement may be amended or
modified at any time by Seller and Purchaser, but only by an instrument in
writing signed by or on behalf of each of Seller and Purchaser.
Section 7.4 Extension; Waiver. At any time prior to the
Closing, either party hereto may (i) extend the time for the performance of any
of the obligations or acts of the other party, (ii) waive any inaccuracies in
the representations and warranties of the other party contained herein or in any
document delivered pursuant hereto, (iii) waive compliance with any of the
agreements of the other party contained herein or (iv) waive any condition to
its obligations hereunder. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in a written
instrument signed by or on behalf of such party. Except as otherwise expressly
provided herein, no failure to exercise, delay in exercising, or single or
partial exercise of any right, power or remedy by any party, and no course of
dealing between the parties, shall constitute a waiver of any such right, power
or remedy.
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ARTICLE VIII
SURVIVAL; INDEMNIFICATION
Section 8.1 Survival Period. The representations and
warranties of the parties contained in Articles III and IV hereof shall survive
the Closing until the date that is 18 months following the Closing Date;
provided, however, that the representations and warranties of Seller contained
in Section 3.12 hereof shall survive the Closing until the date that is 90 days
after the expiration of the applicable statute of limitations and the
representations and warranties of Seller contained in Sections 3.1, 3.2, 3.11
and the first sentence of Section 3.7 hereof and of Purchaser contained in
Sections 4.1, 4.2 and 4.5 hereof shall survive the Closing indefinitely. The
period of time a representation or warranty survives the Closing pursuant to the
preceding sentence shall be the "Survival Period" with respect to such
representation or warranty. Except as otherwise provided in this Section 8.1,
the parties intend to shorten the statute of limitations and agree that no
claims or causes of action may be brought against Purchaser or Seller based upon
any of the representations or warranties contained in Articles III and IV hereof
after the applicable Survival Period. The covenants and agreements of the
parties hereto contained herein shall survive in accordance with their
respective terms, and this Section 8.1 shall not limit any covenant or agreement
of the parties that contemplates performance after the Closing. Notice of any
claim for indemnification under Sections 8.2(a)(i) or 8.2(b)(i) hereof shall be
given within the applicable Survival Period, but if such claim has not been
finally resolved by the expiration of such Survival Period, the representations
and warranties that are the subject of such claim shall survive with respect to
such claim until such claim is finally resolved.
Section 8.2 Indemnification. Subject to the terms and
conditions set forth in this Article VIII, from and after the Closing:
(a) Seller shall defend, indemnify and hold harmless
Purchaser and its Affiliates and their respective directors, officers, equity
holders, employees, agents and representatives and their respective heirs,
successors and assigns (collectively, the "Purchaser Indemnified Parties") from
and against any and all Losses that are directly or indirectly imposed on,
suffered or incurred by any Purchaser Indemnified Party arising out of or
relating to (i) any breach of any representation or warranty of Seller in
Article III of this Agreement, (ii) any failure to perform, or breach of, any
covenant or agreement of Seller set forth in this Agreement or any of the
Related Instruments, (iii) any of the Excluded Liabilities; or (iv) the
ownership, use or enjoyment of any of the Conveyed Assets prior to the Closing.
(b) Purchaser shall defend, indemnify and hold
harmless Seller and its Affiliates and their respective directors, officers,
equity holders, employees, agents and representatives and their respective
heirs, successors and assigns (collectively, the "Seller Indemnified Parties")
from and against any and all Losses that are directly or indirectly imposed on,
suffered or incurred by any Seller Indemnified Party arising out of or relating
to (i) any breach of any representation or warranty of Purchaser in Article IV
of this Agreement, (ii) any failure to perform, or breach of, any covenant or
agreement of
32
Purchaser set forth in this Agreement or any of the Related Instruments, (iii)
any of the Assumed Liabilities or (iv) the ownership, use or enjoyment of any of
the Conveyed Assets following the Closing.
Section 8.3 Indemnification Procedures. (a) All claims for
indemnification by any party entitled to indemnification under this Article VIII
(an "Indemnified Party") with respect to a third-party claim shall be asserted
and resolved as set forth in this Section 8.3. In the event that any claim or
demand by a third party for which a party hereto (the "Indemnifying Party") may
be required to indemnify any Indemnified Party hereunder (a "Claim") is asserted
against or sought to be collected from any such Indemnified Party by a third
party, such Indemnified Party shall as promptly as practicable notify the
Indemnifying Party in writing of such Claim, and such notice shall specify (to
the extent known) in reasonable detail the amount of such Claim and any relevant
facts and circumstances relating thereto (the "Claim Notice"); provided,
however, that any failure to give such prompt notice shall not prejudice the
Indemnified Parties' right to make a claim under this Article VIII, except to
the extent that the rights of the Indemnifying Party are materially prejudiced
thereby.
(b) The Indemnifying Party shall have 20 days from
delivery of the Claim Notice to notify the Indemnified Party whether or not the
Indemnifying Party elects to defend the Indemnified Party against such Claim. In
the event that the Indemnifying Party notifies the Indemnified Party that it
elects to defend the Indemnified Party against such Claim, the Indemnifying
Party shall have the right to defend the Indemnified Party by appropriate
proceedings and shall control such defense at the Indemnifying Party's expense.
After notice to the Indemnified Party of the Indemnifying Party's election to
assume the defense of such Claim, the Indemnifying Party shall not be liable to
the Indemnified Party for any legal expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof unless the Indemnifying
Party fails to diligently pursue the defense of such Claim; provided that the
Indemnified Party shall have the right to employ counsel to represent it if
either (x) the Indemnified Party has available to it one or more defenses or
counterclaims (which are inconsistent with or additional to those available to
the Indemnifying Party and which the Indemnified Party intends to assert) and
the Indemnified Party reasonably believes a material conflict of interest will
arise if chosen counsel continues to represent both parties or (y) the use of
counsel chosen by the Indemnifying Party would present such counsel with a
material conflict of interest, and in any such event the reasonable fees and
expenses of such separate counsel shall be paid by the Indemnifying Party. If
the Indemnifying Party elects not to defend the Indemnified Party against such
Claim, then the Indemnified Party shall defend such Claim by appropriate
proceedings and shall control such defense, at the expense of the Indemnifying
Party.
(c) The parties shall render to each other such
assistance as may reasonably be requested in order to insure the proper and
adequate defense of any such Claim, including making employees available on a
mutually convenient basis to provide additional information and explanation of
any relevant materials or to testify at any proceedings relating to such Claim
and giving the other party reasonable access to any books, records and other
documents and information relating to the defense of such
33
Claim. The Indemnifying Party shall reimburse the out-of-pocket costs reasonably
incurred by the Indemnified Party in providing such assistance.
(d) The Indemnifying Party will not consent to the
entry of any judgment or enter into any settlement with respect to a Claim
without the prior written consent of the Indemnified Party, unless the judgment
or settlement (x) involves only the payment of money damages and (y) includes as
an unconditional term thereof the giving by the claimant or plaintiff to the
Indemnified Party of an unconditional release from all liability in respect of
the Claim. The Indemnified Party will not consent to the entry of any judgment
or enter into any settlement with respect to a Claim without the prior written
consent of the Indemnifying Party, which shall not be unreasonably withheld or
delayed.
Section 8.4 Qualifications on Liability. (a) In no event shall
Seller be liable for indemnification pursuant to Section 8.2(a)(i) unless and
until the aggregate amount of all Losses that are imposed on, suffered or
incurred by the Purchaser Indemnified Parties thereunder exceeds $500,000 (the
"Deductible Amount"), in which case Seller's indemnification obligation shall
only extend to the amount of such Losses in excess of the Deductible Amount;
provided, however, that, notwithstanding the foregoing, any Losses that are
imposed on, suffered or incurred by any of the Purchaser Indemnified Parties
arising out of or relating to any breach of the representation contained in the
last sentence of Section 3.8 shall not be subject to the Deductible Amount;
provided, further, that Seller shall not be required to make payments for
indemnification pursuant to Section 8.2(a)(i) in an aggregate amount in excess
of $20,000,000.
(b) In no event shall Seller's aggregate obligation
to indemnify the Purchaser Indemnified Parties pursuant to Sections 8.2(a)(i)
and 8.2(a)(ii) exceed an amount equal to the Purchase Price. Seller's obligation
to indemnify the Purchaser Indemnified Parties pursuant to Sections 8.2(a)(iii)
and 8.2(a)(iv) shall not be limited in terms of dollar amount.
(c) In no event shall Purchaser be liable for
indemnification pursuant to Section 8.2(b)(i) unless and until the aggregate
amount of all Losses that are imposed on, suffered or incurred by the Seller
Indemnified Parties thereunder exceeds $500,000, in which case Purchaser's
indemnification obligation shall only extend to the amount of such Losses in
excess of $500,000; provided, however, that Purchaser shall not be required to
make payments for indemnification pursuant to Section 8.2(b)(i) in an aggregate
amount in excess of $20,000,000.
(d) In no event shall Purchaser's aggregate
obligation to indemnify the Seller Indemnified Parties pursuant to Sections
8.2(b)(i) and 8.2(b)(ii) exceed an amount equal to the Purchase Price.
Purchaser's obligation to indemnify the Seller Indemnified Parties pursuant to
Sections 8.2(b)(iii) and 8.2(b)(iv) shall not be limited in terms of dollar
amount.
34
(e) The amount of any Losses for which
indemnification is provided under this Article VIII shall be net of any amount
actually recovered by the Indemnified Party under insurance policies with
respect to such Losses.
(f) The provisions of this Article VIII shall be the
sole remedies of the parties with respect to the matters herein.ARTICLE IX
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices. Any notices or other communications
required or permitted under, or otherwise in connection with, this Agreement
shall be in writing and shall be deemed to have been duly given (w) when
delivered in person, (x) upon confirmation of receipt when transmitted by
facsimile transmission, (y) on receipt after dispatch by registered or certified
mail, postage prepaid, or (z) on the next Business Day if transmitted by
national overnight courier, addressed in each case as follows (or to such other
address which has been delivered in accordance with this Section 9.1):
(a) if to Purchaser, to:
Superior Essex Communications LLC
000 Xxxxxxxxxx Xxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Xx.
with a copy to:
Superior Essex Inc.
000 Xxxxxxxxxx Xxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
and:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
(b) if to Seller, to:
Xxxxxx Inc.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
00
Xx. Xxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
with a copy to:
Xxxxxx Communications Company
000 Xxxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxx, President
Section 9.2 Descriptive Headings. The descriptive headings
herein are inserted for convenience only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
Section 9.3 Counterparts; Facsimile Signatures. This Agreement
may be executed in counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same agreement. In the event
that any signature is delivered by facsimile transmission, such signature shall
create a valid and binding obligation of the party executing (or on whose behalf
such signature is executed) the same with the same force and effect as if such
facsimile signature page were an original thereof.
Section 9.4 Entire Agreement. This Agreement, the exhibits and
schedules hereto, the Seller Disclosure Letter, the Related Instruments and the
Confidentiality Agreement, dated as of December 9, 2003, between Xxxxxx Inc. and
Purchaser constitute the entire agreement of the parties hereto, and supersede
all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof.
Section 9.5 Fees and Expenses. Regardless of whether or not
the transactions contemplated by this Agreement are consummated, each party
shall bear its own fees and expenses incurred in connection with the
negotiation, execution, delivery and performance of this Agreement and the
Related Instruments, except as otherwise expressly provided herein; provided,
however, that the parties shall share equally the fees for any filings required
to be made under the HSR Act in connection with the transactions contemplated
hereby, but Seller's liability therefor shall not exceed $22,500; provided,
further, that if the transactions contemplated hereby are not consummated, the
fees for any such filings required to be made under the HSR Act shall be borne
solely by Purchaser.
Section 9.6 Governing Law. This Agreement shall be governed
and construed in accordance with the Laws of the State of Delaware, without
regard to any applicable principles of conflicts of law. Each of the parties
hereto hereby irrevocably and unconditionally consents to submit to the
non-exclusive jurisdiction of the courts of the State of New York located in New
York County and of the United States
00
Xxxxxxxx Xxxxx for the Southern District of New York, as well as any courts of
appeal therefrom, for any litigation arising out of or relating to this
Agreement, any of the Related Instruments or any of the transactions
contemplated hereby or thereby. Each of the parties hereto hereby irrevocably
and unconditionally waives any objection to the laying of venue of any
litigation arising out of or relating to this Agreement, any of the Related
Instruments or any of the transactions contemplated hereby or thereby in the
courts of the State of New York located in New York County and of the United
States District Court for the Southern District of New York, as well as any
courts of appeal therefrom, and hereby further irrevocably and unconditionally
waives and agrees not to plead or claim in any such court that any such
litigation brought in any such court has been brought in an inconvenient forum.
The parties agree that a final judgment in any such litigation shall be
conclusive and may be enforced in other jurisdictions by suits on the judgment
or in any other manner provided by Law.
Section 9.7 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OF THE
RELATED INSTRUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 9.8 Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be transferred, assigned or
delegated by either of the parties hereto, in whole or in part, without the
prior written consent of the other party hereto (which shall not be unreasonably
withheld), and any attempt to make any such transfer, assignment or delegation
without such consent shall be null and void. Notwithstanding anything in this
Section 9.8 to the contrary, Purchaser may assign all of its rights hereunder as
collateral security pursuant to any credit agreement, credit facility or
financing arrangement utilized in whole or in part by Purchaser to fund the
Purchase Price and, from and after the Closing, Seller may assign all of its
rights hereunder as collateral security pursuant to any credit agreement, credit
facility or financing arrangement it may enter into.
Section 9.9 Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto and its
successors and permitted assigns, and, except as expressly provided herein,
nothing in this Agreement, express or implied, is intended to or shall confer
upon any other Person any rights, interests, benefits or remedies of any nature
whatsoever under or by reason of this Agreement.
Section 9.10 Interpretation. In the event of an ambiguity or
question of intent or interpretation, this Agreement shall be construed as if
drafted jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provisions
of this Agreement.
Section 9.11 Severability. In the event that any one or more
of the provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable in any respect for any
reason, the parties shall negotiate
37
in good faith with a view to the substitution therefor of a suitable and
equitable solution in order to carry out, so far as may be valid and
enforceable, the intent and purpose of such invalid provision; provided,
however, that the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions contained herein shall not
be in any way impaired thereby, it being intended that all of the rights and
privileges of the parties hereto shall be enforceable to the fullest extent
permitted by Law.
Section 9.12 Bulk Sales Laws. Purchaser waives compliance by
Seller with any bulk sales or similar Laws applicable to the transactions
contemplated hereby.
Section 9.13 Guarantee by Xxxxxx Inc. Xxxxxx Inc. hereby
irrevocably guarantees to Purchaser and the Purchaser Indemnified Parties the
punctual payment of all sums, and the punctual performance of all obligations,
by Seller hereunder, without deduction for any right of recourse, defense,
counterclaim, offset or setoff. This is an absolute, unconditional and unlimited
guarantee of payment and performance and may be proceeded upon by Purchaser or
any Purchaser Indemnified Party before taking any action against Seller or after
any action against Seller has been commenced.
Section 9.14 Guarantee by Superior Essex Inc. Superior Essex
Inc. hereby irrevocably guarantees to Seller and the Seller Indemnified Parties
the punctual payment of all sums, and the punctual performance of all
obligations, by Purchaser hereunder, without deduction for any right of
recourse, defense, counterclaim, offset or setoff. This is an absolute,
unconditional and unlimited guarantee of payment and performance and may be
proceeded upon by Seller or any Seller Indemnified Party before taking any
action against Purchaser or after any action against Purchaser has been
commenced.
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IN WITNESS WHEREOF, the parties hereto have executed this
Asset Purchase Agreement as of the date first written above.
SUPERIOR ESSEX COMMUNICATIONS LLC
By: SUPERIOR ESSEX HOLDING CORP.
By: /s/Xxxxxx X. Xxxxx, Xx.
----------------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Vice President
BELDEN COMMUNICATIONS COMPANY
By: /s/Xxxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
XXXXXX (CANADA) INC.
By: /s/Xxxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Treasurer
Acknowledged and agreed with respect to Section 9.13:
XXXXXX INC.
By: /s/Xxxxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President, Finance and Chief Financial Officer
Acknowledged and agreed with respect to Section 9.14:
SUPERIOR ESSEX INC.
By: /s/Xxxxxx X. Xxxxx, Xx.
---------------------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Executive Vice President
39
