Exhibit 2.1
Execution Copy
LLC INTEREST PURCHASE AGREEMENT
CELESTICA CORPORATION
- and -
CELESTICA INC.
- and -
C&D TECHNOLOGIES, INC.
-----------------------------
September 23, 2004
TABLE OF CONTENTS
ARTICLE 1
INTERPRETATION
1.1 Definitions..............................................................1
1.2 Currency.................................................................9
1.3 Sections and Headings....................................................9
1.4 Number, Gender and Persons..............................................10
1.5 Accounting Principles...................................................10
1.6 Knowledge...............................................................10
1.7 Entire Agreement........................................................10
1.8 Time of Essence.........................................................10
1.9 Applicable Law..........................................................10
1.10 Severability............................................................11
1.11 Successors and Assigns..................................................11
1.12 Calculation of Time.....................................................11
1.13 Amendment and Waivers...................................................11
1.14 Schedules...............................................................11
ARTICLE 2
PURCHASE AND SALE
2.1 Purchase and Sale of Purchased Interests................................12
2.2 Purchase Price..........................................................12
2.3 Allocation of Purchase Price............................................13
2.4 Withholding Taxes.......................................................13
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE VENDOR
3.1 Representations and Warranties of the Vendor............................13
3.2 Survival of Representations and Warranties of the Vendor................27
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
4.1 Representations and Warranties..........................................28
4.2 Survival of Representations and Warranties of the Purchaser.............29
ARTICLE 5
COVENANTS
5.1 Access to the Company...................................................30
5.2 Delivery of Books and Records...........................................30
5.3 Conduct Prior to Closing................................................30
5.4 Delivery of Documents...................................................31
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5.5 Employee Plans..........................................................32
5.6 Use of Name.............................................................32
5.7 Tax Matters.............................................................32
5.8 Product Warranty Claims.................................................34
5.9 Shanghai Employees......................................................34
5.10 Leave Employees.........................................................35
5.11 Insurance...............................................................35
5.12 Survival of Covenants...................................................35
ARTICLE 6
CONDITIONS OF CLOSING
6.1 Conditions of Closing in Favor of the Purchaser.........................35
6.2 Conditions of Closing in Favor of the Vendor............................38
ARTICLE 7
CLOSING ARRANGEMENTS
7.1 Place of Closing........................................................39
7.2 Transfer................................................................39
7.3 Further Assurances......................................................40
ARTICLE 8
INDEMNIFICATION
8.1 Indemnification by the Vendor...........................................40
8.2 Tax Indemnification.....................................................41
8.3 Indemnification by the Purchaser........................................42
8.4 Notice of Claim.........................................................43
8.5 Direct Claims...........................................................43
8.6 Third Party Claims......................................................44
8.7 Settlement of Third Party Claims........................................44
8.8 Co-operation............................................................44
8.9 Monetary Limit on Indemnification.......................................44
8.10 Exclusivity.............................................................46
ARTICLE 9
GENERAL
9.1 Confidentiality of Information..........................................46
9.2 Notices.................................................................46
9.3 Commissions, etc........................................................47
9.4 Consultation and Public Announcements...................................47
9.5 Disclosure..............................................................47
9.6 Celestica Parent Guarantee..............................................48
9.7 Counterparts............................................................52
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LLC INTEREST PURCHASE AGREEMENT
THIS AGREEMENT made the 23rd day of September, 0000,
X X X X X X X:
CELESTICA CORPORATION,
a corporation existing under the laws of the State of
Delaware,
(hereinafter referred to as the "Vendor"),
- and -
CELESTICA INC.,
a corporation existing under the laws of the
Province of Ontario,
(hereinafter referred to as "Celestica Parent"),
- and -
C&D TECHNOLOGIES, INC.,
a corporation existing under the laws of the State
of Delaware,
(hereinafter referred to as the "Purchaser").
THIS AGREEMENT WITNESSES THAT in consideration of the respective
covenants, agreements, representations, warranties and indemnities herein
contained and for other good and valuable consideration (the receipt and
sufficiency of which are acknowledged by each party), the parties covenant and
agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions.
For the purpose of this Agreement, unless the context otherwise
requires, the following terms shall have the respective meanings set out below
and grammatical variations of such terms shall have corresponding meanings:
"Accounts Receivable" means, on any date, all accounts receivable of the
Vendor or the Company, as the case may be, relating to the Business as at
such date;
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"Affiliate", with respect to a party, means any corporation, partnership,
limited liability company or partnership, association, trust or other
organization which, directly or indirectly, controls, is controlled by, or
is under common control with, such party. For purposes of the preceding
sentence, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to
any entity or organization, shall mean the possession, directly or
indirectly, of the power (i) to vote more than 50% of the securities
having ordinary voting power for the election of directors of the
controlled entity or organization, or (ii) to direct or cause the
direction of the management and policies of the controlled entity or
organization, whether through the ownership of voting securities or by
contract or otherwise;
"Apportioned Obligations" has the meaning set out in Section 5.7(j);
"arm's length" has the meaning attributed to that term in the Income Tax
Act (Canada) and the related jurisprudence;
"Asian Assets" means the assets to be sold by the Vendor, Celestica
Corporation and Celestica (Thailand) Limited to Dynamo Acquisition Corp.
pursuant to the Asian Purchase Agreement;
"Asian Purchase Agreement" means the asset purchase agreement dated the
date hereof between the Vendor, Celestica International Inc., Celestica
(Thailand) Limited and Dynamo Acquisition Corp.;
"Assumed Liabilities" has the meaning set out in the U.S. Drop-Down
Agreement;
"Audited Closing Date Statement" has the meaning set out in the Purchase
Price Adjustment Agreement;
"Benefit Plans" has the meaning set out in Section 3.1(bb)(i);
"Business" means the business collectively carried on by the Power Vendors
through their respective power operations on the date hereof, consisting
of the engineering, development, design, promotion, marketing,
distribution and sale of Power Products to original equipment
manufacturers and other customers, including, without limitation, the
"build-to-print" business, consisting of the facilitation and management,
on behalf of the Power Vendors' customers, of the manufacture (including
applicable testing) by third party contract manufacturers, of such
customers' Power Products in accordance with such customers'
specifications and without any design contribution from the Power Vendors,
or any of them, but for certainty excluding the manufacture or repair of
Power Products under such "build-to-print" arrangement, it being
understood and agreed by the parties that none of the Power Vendors
conducts the Business in its entirety and each only conducts a part of the
Business such that collectively they conduct the Business;
"Business Day" means any day, other than a Saturday or a Sunday, on which
banks are open for business in New York, New York;
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"Canadian Drop-Down" has the meaning set out in the Canadian Purchase
Agreement;
"Canadian Drop-Down Agreement" has the meaning set out in the Canadian
Purchase Agreement;
"Canadian Purchase Agreement" means the share purchase agreement dated the
date hereof between C&D Power Systems (Canada) ULC, Celestica
International Inc., the Purchaser and Celestica Parent;
"Celestica Group" means the Vendor and, as of the Effective Time, all past
or present Affiliates of the Vendor and all other entities that have or
are presently joining with Vendor in the filing of a combined,
consolidated, unitary or other joint Tax Return with Vendor;
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. 9601 (et seq.);
"Claim" has the meaning set out in Section 8.4;
"Closing" means the closing of the purchase and sale of the Purchased
Interests contemplated hereby;
"Closing Date" means September 30, 2004 or such other date as may be
mutually agreed upon by the Vendor and the Purchaser;
"Closing Date Transactions" means, collectively, the transactions
contemplated by this Agreement, the Canadian Purchase Agreement, the
Shanghai Purchase Agreement and the Asian Purchase Agreement;
"COBRA" means section 4980B of the Code and Part 6 of Title I of ERISA,
initially enacted as part of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended;
"Code" means the Internal Revenue Code of 1986, as amended;
"Company" means Dynamo Power System (USA) LLC, a limited liability company
formed under the laws of Delaware;
"Contract" means any agreement, indenture, contract, lease, deed of trust,
licence, option, instrument or other commitment, whether written or oral,
but not including any Licence;
"Direct Claim" has the meaning set out in Section 8.4;
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"Drop-Downs" means, collectively, the completion of the transfers or
contributions of assets and assumptions of liabilities pursuant to the
U.S. Drop-Down Agreement and the Canadian Drop-Down Agreement;
"Effective Time" means the time that is immediately after the Effective
Time under the U.S. Drop-Down Agreement;
"Employees" has the meaning set out in Section 3.1(aa);
"Encumbrance" means any encumbrance, lien, charge, hypothec, pledge,
mortgage, title retention agreement, security interest of any nature,
adverse claim, exception, reservation, easement, right of occupation, any
matter capable of registration against title, privilege or any Contract to
create any of the foregoing;
"Environmental Law" means any statute, regulation, rule, order, directive
or other requirement of a Governmental Entity in each case having the
force of law, as in effect on the Closing Date to the extent that such
statute, regulation, rule, order, directive or other requirement relates
to the protection of the environment or occupational health and safety
matters, including, without limitation, legislation governing the
labelling, use, storage, treatment and disposal of Hazardous Substances;
"Environmental Order" means an applicable order or decision rendered by
any Governmental Entity under or pursuant to any Environmental Law;
"Environmental Permit" means any License required under Environmental Law
in connection with the operation of the portion of the Business conducted
by the Vendor;
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor law, and regulations and rules issued pursuant
to that Act or any successor law;
"ETA" means the Excise Tax Act (Canada), as amended from time to time;
"Excluded Liabilities" means liabilities and obligations of the Vendor
other than liabilities and obligations of the Vendor to be assumed by the
Company pursuant to the U.S. Drop-Down Agreement;
"Final Determination" means (i) any final, non-appealable judgment of a
court of competent jurisdiction, or (ii) any closing or similar agreement
entered into with a Governmental Entity;
"Financial Information" means the pro forma financial information for the
Business for each of the months in the period commencing January 1, 2004
and ending August 20, 2004 delivered to the Purchaser by the Vendor, in
each case consisting of statements of revenue and profitability adjusted
to give effect to the PIP, and statements of invested capital, copies of
which are attached as Schedule 1.1(a) hereto;
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"Governmental Entity" means any federal, state, provincial, local,
municipal, foreign or other government, and any body lawfully exercising
any administrative, judicial, legislative or regulatory authority or
power;
"GST" means all taxes payable under Part IX of the ETA or under any
provincial legislation similar to Part IX of the ETA;
"Hazardous Substance" means PCBs, asbestos, urea formaldehyde foam
insulation, lead or any substance or material that is prohibited,
controlled or regulated as hazardous, toxic, a pollutant or a contaminant
under Environmental Law;
"Indemnified Party" has the meaning set out in Section 8.4;
"Indemnifying Party" has the meaning set out in Section 8.4;
"Intellectual Property" has the meaning set out in Section 3.1(n)(i);
"Laws" means any applicable laws (including common law), statutes,
by-laws, rules, regulations, orders, ordinances, protocols, codes,
guidelines, treaties, policies, notices, directions and judicial,
arbitral, administrative, ministerial or departmental judgements, awards
or other requirements of any Governmental Entity, in each case which have
the force of law;
"Leased Real Property" has the meaning set out in Section 3.1(l);
"Lease" has the meaning set out in Section 3.1(l);
"Leave Employees" means all employees of the Vendor who, on the day
immediately preceding the Closing Date, are on a leave, including, without
limitation, parental or pregnancy leave or leave related to receipt of
short term or long term disability benefits or workers' compensation
benefits. The employment of the Leave Employees has not been transferred
to and assumed by the Company pursuant to the U.S. Drop Down Agreement as
a result of such employees being on leave;
"Leave Expiry Date" has the meaning set out in Section 5.10;
"Licenses" has the meaning set out in Section 3.1(r);
"Licensed Intellectual Property" has the meaning set out in Section
3.1(n)(i);
"Losses", in respect of any matter, means all losses, damages,
liabilities, penalties and expenses (including reasonable legal fees and
out-of-pocket disbursements) arising as a result of such matter (but
excluding any lost profits or other consequential or indirect losses);
"Material Adverse Effect" has the meaning set out in Section 3.1(f);
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"Material Contract" means any Contract to which the Company will,
immediately following the U.S. Drop-Down, be a party, or by which it will,
immediately following the U.S. Drop-Down, be bound or of which it will,
immediately following the U.S. Drop-Down, have the benefit, and which:
(i) in the most recently completed fiscal year of the Vendor
involved expenditures by the Vendor, or which the Vendor
currently expects will involve expenditures by the Company in
the current fiscal year of the Company, in each case in excess
of $100,000; or
(ii) in the most recently completed fiscal year of the Vendor
involved revenues to the Vendor, or which the Vendor currently
expects will involve revenues to the Company in the current
fiscal year of the Company, in each case in excess of
$500,000;
"Other Purchase Agreements" means, collectively, the Canadian Purchase
Agreement, the Shanghai Purchase Agreement, the Asian Purchase Agreement
and the Suzhou Purchase Agreement;
"Owned Intellectual Property" has the meaning set out in Section
3.1(n)(i);
"Owned Patent" has the meaning set out in Section 3.1(n)(iii);
"Pension Documents" means all Plans and amendments thereto;
"Permitted Encumbrances" means:
(b) liens for taxes, assessments and governmental levies, fees or
charges due and being contested in good faith and diligently
by appropriate proceedings;
(c) servitudes, easements, covenants, conditions, restrictions,
rights-of-way and other similar rights in real property or any
interest therein, provided the same are not of such nature as
to materially adversely affect the use or occupancy of the
property subject thereto by the Company;
(d) liens for taxes either not due and payable or due but for
which notice of assessment has not been given;
(e) undetermined or inchoate liens, charges and privileges
incidental to current construction or current operations and
statutory liens, charges, adverse claims, security interests
or encumbrances of any nature whatsoever claimed or held by
any Governmental Entity which have not at the time been filed
or registered against the title to the asset or served upon
the Company or the Vendor pursuant to law or which relate to
obligations not due or delinquent;
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(f) assignments of insurance provided to landlords (or their
mortgagees) pursuant to the terms of any lease and liens or
rights reserved in any lease for rent or for compliance with
the terms of such lease;
(g) security given in the ordinary course of the Business to any
public utility, municipality or government or to any statutory
or public authority in connection with the operations of the
Business, other than security for borrowed money;
(h) statutory exceptions to title which do not materially detract
from the value of the real property concerned or materially
impair its use in the operation of the Business;
(i) mechanics' liens and similar liens for labor, materials or
supplies provided with respect to real property incurred in
the ordinary course of the Business for amounts that are not
due or that are being contested in good faith which would not,
individually or in the aggregate, materially impair the use or
occupancy of the real property in the operation of the
Business;
(j) zoning, building codes and other land use laws regulating the
use or occupancy of real property or the activities conducted
thereon that are imposed by any Governmental Entity having
jurisdiction over the real property and are not violated by
the current use or occupancy of the real property in the
operation of the Business; and
(k) the security interests listed on Schedule 3.1(k);
"Person" means an individual, body corporate with or without share
capital, partnership, joint venture, unincorporated association,
syndicate, sole proprietorship, trust, pension fund, union, governmental
agency, board, tribunal, ministry, commission or department and the heirs,
beneficiaries, executors, legal personal representatives and
administrators of an individual;
"PIP" means the profit improvement plan to be implemented by the Business
and involving, among other things, a reduction in employees of the
Business;
"Plan Terms" means the terms and conditions of all Plan texts and
amendments thereto;
"Power Products" means power supply, regulation and conversion products
excluding products (or components of products) whose principal function or
use is not power supply, regulation or conversion but which contain or
incorporate power circuitry, or power supply, regulation or conversion
components, including without limitation, printers and communications
circuit boards and servers;
"Plans" means a plan or plans established, organized and administered to
provide pensions for Employees and their beneficiaries and, where
applicable, includes:
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(i) the assets and funds maintained to provide benefits under or
related to Plans; and
(ii) Plan Terms;
"Post-Closing Tax Period" has the meaning set out in Section 5.7(j);
"Power Vendors" means, collectively, the Vendor, Celestica International
Inc. and Celestica Electronics (Shanghai) Co. Ltd.;
"Pre-Closing Tax Period" has the meaning set out in Section 5.7(j);
"Purchase Price" has the meaning set out in Section 2.2;
"Purchase Price Adjustment Agreement" means the agreement dated the date
hereof between the Power Vendors, Celestica (Thailand) Limited, Celestica
Suzhou Technology Ltd., Celestica Parent, the Purchaser, C&D Power Systems
(Canada) ULC, Datel Electronic Technology (Shanghai) Co., Ltd. and Dynamo
Acquisition Corp. relating to, among other things, the adjustment of the
Purchase Price;
"Purchased Entities" means, collectively, the Company and Dynamo Power
Systems (Canada) ULC;
"Purchased Interests" means all of the limited liability company interests
of the Company;
"Release" has the meaning given to that term in CERCLA;
"Shanghai Assets" means the assets that are to be sold to Datel Electronic
Technology (Shanghai) Co., Ltd. by Celestica Electronics (Shanghai) Co.
Ltd. pursuant to the Shanghai Purchase Agreement;
"Shanghai Purchase Agreement" means the asset purchase agreement dated the
date hereof between Celestica Electronics (Shanghai) Co. Ltd., Celestica
Parent, Datel Electronic Technology (Shanghai) Co., Ltd. and the
Purchaser;
"Suzhou Assets" means the assets to be sold by Celestica Suzhou Technology
Ltd. to Dynamo Acquisition Corp. pursuant to the Suzhou Purchase
Agreement;
"Suzhou Purchase Agreement" means the inventory purchase agreement dated
the date hereof between Celestica Suzhou Technology Ltd., Celestica
Parent, Dynamo Acquisition Corp. and the Purchaser;
"Subsidiary" means, with respect to any Person, any corporation, company
or other similar business entity of which more than fifty per cent (50%)
of the outstanding shares or other equity interests (in the case of
Persons other than corporations) having ordinary
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voting power to elect a majority of the board of directors or the
equivalent thereof of such corporation, company or similar business entity
(irrespective of whether at the time shares of any other class or classes
of the shares of such corporation, company or similar business entity
shall or might have voting power upon the occurrence of any contingency)
is at the time directly or indirectly owned by such Person, by such Person
and one or more other Subsidiaries of such Person, or by one or more other
Subsidiaries of such Person;
"Tax Returns" means all returns, reports, declarations, elections,
notices, filings, information returns and statements filed or required to
be filed in respect of Taxes under all applicable Laws;
"Taxes" means all federal, provincial, state, local and foreign taxes,
governmental premiums and fees, levies and duties, including, but not
limited to income tax, profits tax, corporation tax, sales and use tax,
payroll tax, worker's compensation levy, capital tax, stamp duty, real and
personal property tax, land transfer tax, customs or excise duty, excise
tax, value added tax on goods sold or services rendered, franchise taxes,
escheats taxes, sales tax, harmonized sales tax, surtax, withholding tax,
employer health tax, payroll tax, education, social security and
employment insurance charges, health insurance and government pension plan
premiums or contributions and any interest, fines, additions to tax and
penalties thereon whether disputed or not;
"Third Party Claim" has the meaning set out in Section 8.4;
"Time of Closing" means the time at which the Closing occurs, which is
proposed to be 10:00 a.m. (Toronto time) on the Closing Date;
"Transferred Employees" has the meaning set out in Section 5.10;
"U.S. Drop-Down" means the contribution of assets and assumption of
liabilities pursuant to the U.S. Drop-Down Agreement; and
"U.S. Drop-Down Agreement" means the agreement to be entered into between
the Vendor and the Company, substantially in the form attached as Schedule
1.1(b).
1.2 Currency.
Unless otherwise indicated, all dollar amounts referred to in this
Agreement are expressed in the lawful currency of the United States of America.
1.3 Sections and Headings.
The division of this Agreement into sections and the insertion of
headings are for convenience of reference only and shall not affect the
interpretation of this Agreement. Unless otherwise indicated, any reference in
this Agreement to a section, subsection, clause or a Schedule refers to the
specified section, subsection or clause of or Schedule to this Agreement.
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1.4 Number, Gender and Persons.
In this Agreement, words importing the singular number only shall
include the plural and vice versa, words importing gender shall include all
genders and words importing persons shall include individuals, corporations,
partnerships, associations, trusts, unincorporated organizations, governmental
bodies and other legal or business entities.
1.5 Accounting Principles.
Any reference in this Agreement to generally accepted accounting
principles refers to generally accepted accounting principles as approved from
time to time by the Canadian Institute of Chartered Accountants or any successor
institute.
1.6 Knowledge.
For the purposes of this Agreement, the knowledge of the Vendor or
the Company, with respect to any matter, shall mean the actual knowledge of
Xxxxx Xxxxxxx, Xxxx Xxxxxxx and Xxxxxx Xxxxxxxxxxxx, and the knowledge that such
individuals reasonably ought to have, with respect to such matter, after making
all reasonable inquiries in respect thereof.
1.7 Entire Agreement.
This Agreement, together with the Purchase Price Adjustment
Agreement, constitutes the entire agreement between the parties with respect to
the subject matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions, whether written or oral. There are no conditions,
covenants, agreements, representations, warranties or other provisions, express
or implied, collateral, statutory or otherwise, relating to the subject matter
hereof except as herein provided.
1.8 Time of Essence.
Time shall be of the essence of this Agreement.
1.9 Applicable Law.
This Agreement shall be construed, interpreted and enforced in
accordance with, and the respective rights and obligations of the parties shall
be governed by, the laws of the State of New York without regard to conflicts of
law principles, and each party hereby irrevocably and unconditionally submits to
the non-exclusive jurisdiction of the federal District Court for the Southern
District of New York and, if such court does not accept jurisdiction, of the
courts of the State of New York sitting in the Borough of Manhattan in The City
of New York, and all courts competent to hear appeals therefrom.
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1.10 Severability.
If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid, illegal or unenforceable in any respect,
such determination shall not impair or affect the validity, legality or
enforceability of the remaining provisions hereof, and each provision is hereby
declared to be separate, severable and distinct.
1.11 Successors and Assigns.
This Agreement shall enure to the benefit of and shall be binding on
and enforceable by the parties and, where the context so permits, their
respective successors and permitted assigns. No party may assign any of its
rights or obligations hereunder, without the prior written consent of the other
parties, provided that the Purchaser shall have the right to assign its rights
hereunder to any of its Affiliates. No such assignment shall, however, relieve
the Purchaser of any of its obligations hereunder. The Vendor may, with the
prior written consent of the Purchaser (which consent shall not be unreasonably
withheld), at any time prior to the Time of Closing, sell, assign or otherwise
transfer the Purchased Interests and assign its rights and obligations under
this Agreement to any Affiliate of the Vendor, provided that notwithstanding any
such assignment and assumption the Vendor shall remain liable for all its
obligations hereunder (other than the obligation to sell the Purchased Interests
to the Purchaser). Each of the parties acknowledges that there are no third
party beneficiaries of this Agreement.
1.12 Calculation of Time.
Unless otherwise specified, time periods within or following which
any payment is to be made or act is to be done shall be calculated by excluding
the day on which the period commences and including the day on which the period
ends. When the last day of any such time period is not a Business Day, such time
period shall be extended to the next Business Day following the day on which it
would otherwise end.
1.13 Amendment and Waivers.
No amendment or waiver of any provision of this Agreement shall be
binding on any party unless consented to in writing by such party. No waiver of
any provision of this Agreement shall constitute a waiver of any other
provision, nor shall any waiver constitute a continuing waiver unless otherwise
expressly provided.
1.14 Schedules.
The following Schedules are attached to and form part of this
Agreement:
Schedule 1.1(a) Financial Information
Schedule 1.1(b) U.S. Drop-Down Agreement
Schedule 2.3 Purchase Price Allocation
Schedule 3.1(k)(i) Permitted Encumbrances
Schedule 3.1(k)(ii) Excluded Assets
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Schedule 3.1(l) Leased Real Property
Schedule 3.1(n)(i) Intellectual Property
Schedule 3.1(n)(iii) Notice of Claims
Schedule 3.1(n)(v) Rights in Intellectual Property
Schedule 3.1(n)(vi) Exceptions
Schedule 3.1(q) Agreements and Commitments
Schedule 3.1(r) Licences
Schedule 3.1(s) Consents and Approvals
Schedule 3.1(u) Changes
Schedule 3.1(v) Leased Property
Schedule 3.1(w) Fixed Assets
Schedule 3.1(z) Accounts Receivable
Schedule 3.1(aa) Employees
Schedule 3.1(bb) Benefit Plans
Schedule 3.1(cc) Non-Arm's Length Contracts
Schedule 3.1(dd) Bank Accounts
Schedule 3.1(gg) Environmental
Schedule 3.1(hh) Product Compliance and Warranty Claims
Schedule 3.1(jj) Litigation
Schedule 3.1(ll) Taxes
Schedule 3.1(mm) Customers and Suppliers
Schedule 5.3(d) Contractual Consents
Schedule 6.1(j) Form of Agreement to Manufacture
Schedule 6.1(h)(i) Form of Corporate Non-Competition and
Non-Solicitation Agreement
Schedule 6.1(h)(ii) Form of Individual Non-Competition and
Non-Solicitation Agreement
Schedule 6.1(k) Form of Transition Services Agreement
Schedule 6.1(l)(i) Form of U.S. Employee Services Agreement
Schedule 6.1(l)(ii) Form of Canadian Employee Services Agreement
Schedule 6.1(m) Form of Shanghai Occupancy Agreement
ARTICLE 2
PURCHASE AND SALE
2.1 Purchase and Sale of Purchased Interests.
Subject to the terms and conditions hereof, the Vendor covenants and
agrees to sell, assign and transfer the Purchased Interests to the Purchaser,
and the Purchaser covenants and agrees to purchase the Purchased Interests from
the Vendor, effective at the Effective Time.
2.2 Purchase Price.
The purchase price payable by the Purchaser to the Vendor in respect
of the Purchased Interests (the "Purchase Price") shall be $23,459,496, as such
amount may be adjusted pursuant to the Purchase Price Adjustment Agreement. At
the Time of Closing, the Purchaser
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shall pay $23,459,496 on account of the Purchase Price to the Vendor (or as the
Vendor may direct) by wire transfer of immediately available funds in accordance
with instructions delivered by the Vendor to the Purchaser not less than two
Business Days prior to the Closing Date, or in such manner as the Vendor may in
writing direct not less than two Business Days prior to the Closing Date.
2.3 Allocation of Purchase Price.
The Purchase Price (together with such other amounts as may be
required for Tax purposes) shall be allocated as set forth in Schedule 2.3.
2.4 Withholding Taxes.
The Purchaser shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement such amounts as the
Purchaser is required to deduct and withhold under the Code, or any provision of
state, local, or foreign Tax law after giving effect to any applicable income
tax treaty. The Purchaser shall use reasonable efforts to notify Vendor of any
such withholding tax obligation at least two Business Days prior to the Closing
Date; provided, however, that the Purchaser shall be entitled to make such
withholding in any event. Purchaser shall remit any amount so withheld to the
relevant Governmental Entity no later than the earlier of (i) the applicable due
date and (ii) 10 Business Days after the date of payment to the Purchaser in
respect of which the withholding was made. The Purchaser shall timely furnish to
the Vendor the original or a certified copy of a receipt evidencing the
remittance. To the extent that amounts are so withheld, such withheld amounts
shall be treated for all purposes hereto as having been paid to the Vendor.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE VENDOR
3.1 Representations and Warranties of the Vendor.
The Vendor represents and warrants to the Purchaser as follows and
acknowledges that the Purchaser is relying on such representations and
warranties in connection with its purchase of the Purchased Interests,
regardless of any independent investigation made by the Purchaser:
(a) Existence and Capacity. The Vendor is a corporation duly
incorporated, validly existing and in good standing under the laws
of the State of Delaware and has the corporate power to enter into
this Agreement and to perform its obligations hereunder;
(b) Authorization. This Agreement has been duly authorized, executed and
delivered by the Vendor and is a legal, valid and binding obligation
of the Vendor, enforceable against the Vendor by the Purchaser in
accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency and other
-14-
laws affecting the rights of creditors generally and except that
equitable remedies may be granted only in the discretion of a court
of competent jurisdiction;
(c) No Other Agreements to Purchase. No Person other than the Purchaser
has any written or oral agreement or option or any right or
privilege (whether by law, pre-emptive or contractual) capable of
becoming an agreement or option for the purchase or acquisition from
the Vendor of any of the Purchased Interests or any of the assets to
be contributed to the Company pursuant to the U.S. Drop-Down
Agreement other than sales of products in the ordinary course of
business;
(d) Ownership of Purchased Interests. The Vendor is the beneficial owner
of record of the Purchased Interests, with good and marketable title
thereto, free and clear of all Encumbrances and, without limiting
the generality of the foregoing, none of the Purchased Interests is
subject to any voting trust, proxy, shareholder agreement, or voting
agreement (other than the limited liability company agreement of the
Company);
(e) No Violation. The execution and delivery of this Agreement by the
Vendor and Celestica Parent and the consummation by the Vendor of
the transaction of purchase and sale of the Purchased Interests
herein provided for do not result in the violation by the Vendor or
Celestica Parent of, or constitute a default under or conflict with:
(i) any provision of the constating documents or by-laws or
resolutions of the board of directors (or any committee
thereof) or shareholders of the Vendor or Celestica Parent;
(ii) any judgement, decree, order or award of any court,
governmental body or arbitrator having jurisdiction over the
Vendor or Celestica Parent; or
(iii) any law, statute, ordinance, regulation or rule applicable to
the Vendor or Celestica Parent;
(f) Organization of the Company. The Company is validly existing under
the laws of Delaware and has the limited liability company power to
own or lease its property and to carry on the portion of the
Business conducted by the Vendor as now being conducted by the
Vendor. The Company is duly registered, qualified, licensed or
domesticated to do business in each jurisdiction in which the nature
of the Business or the property and assets owned or leased by it
makes such qualification necessary, except to the extent that
failure to be so registered or qualified would not reasonably be
expected to have a material adverse effect on the business,
financial condition or results of operations of the Company (a
"Material Adverse Effect");
-15-
(g) Authorized and Issued Interests. The Vendor owns all of the
outstanding interests in the Company and on the Closing Date, the
Purchased Interests shall constitute all of the issued and
outstanding ownership interests in the Company;
(h) No Options. No Person has any agreement or option or any right or
privilege (whether by law, pre-emptive or contractual) capable of
becoming an agreement, including convertible securities, warrants or
convertible obligations of any nature, for the purchase,
subscription, allotment or issuance of interests in the Company;
(i) Subsidiaries. The Company does not own or have any agreements of any
nature to acquire, directly or indirectly, any shares in the capital
of or other equity or proprietary interests in any Person, and the
Company does not have any agreements to acquire any other business
operations;
(j) No Violation by the Company. The execution and delivery of this
Agreement by the Vendor and the consummation by the Vendor of the
transaction of purchase and sale of the Purchased Interests herein
provided for do not result in the violation of, or constitute a
default under or conflict with or cause the acceleration of any
obligations of the Company under:
(i) any Material Contract;
(ii) any provision of the limited liability agreement of the
Company or consents of the members or managers of the Company;
(iii) any judgment, decree, order or award of any court,
governmental body or arbitrator having jurisdiction over the
Company; or
(iv) any law, statute, ordinance, regulation or rule applicable to
the Company,
except, in the case of section (i), where such violation, default,
conflict or acceleration would not reasonably be expected to have a
Material Adverse Effect;
(k) Title to Personal and Other Property and Sufficiency of Assets.
(i) All of the property and assets owned by the Company
immediately after the U.S. Drop-Down and immediately prior to
the Closing will be owned beneficially by the Company with a
good and marketable title thereto, free and clear of all
Encumbrances, other than Permitted Encumbrances; and
(ii) the property and assets that will, immediately after the
Drop-Downs, be owned by the Purchased Entities or of which the
Purchased Entities will, immediately after the Drop-Downs and
on the Closing, have the use in connection with the operation
of the Business, together with the Shanghai Assets, the Suzhou
Assets, the Asian Assets and the assets identified in Schedule
3.1(k)(ii), constitute all of the property and assets
necessary to
-16-
operate the Business in substantially the same manner as it is
operated by the Power Vendors on the date of this Agreement,
and includes all property and assets that were used either
exclusively or primarily in the operation of the Business
prior to the Closing;
(l) Leased Real Property. Schedule 3.1(l) sets forth the address of all
real property leased by the Vendor in its conduct of the Business
(the "Leased Real Property"). All buildings, structures,
improvements and appurtenances situated on the Leased Real Property
are adequate and suitable for the purposes for which they are
currently being used by the Vendor. None of such buildings,
structures, improvements or appurtenances (or any equipment
therein), nor the operation or maintenance thereof, violates any
restrictive covenant or any provision of any Law or encroaches on
any property owned by others, except where such violation or
encroachment would not reasonably be expected to have a Material
Adverse Effect. To the Vendor's knowledge, no portion of or interest
in any such buildings, structures, improvements or appurtenances (or
any equipment therein) is subject to any building or use
restrictions (public or otherwise) that would prevent the
continuation of their present use and operation by the Company in
the conduct of the Business. The Vendor is not a party to any lease
or agreement in the nature of a lease in respect of any real
property from which it conducts the Business, whether as lessor or
lessee, other than the sub-lease (the "Sublease") described in
Schedule 3.1(l) relating to the Leased Real Property, which will be
assigned to the Company. As of the date hereof:
(i) the Sublease is in full force and effect, and neither the
Vendor nor the Company nor, to the Vendor's knowledge, the
sublessor thereunder (the "Sublessor") has defaulted under or
committed a breach of any of the terms of the Sublease, except
where such default or breach would not reasonably be expected
to have a Material Adverse Effect, nor, to the Vendor's
knowledge, has an event of any other kind occurred which would
permit the Sublessor to terminate the Sublease;
(ii) except as set forth in the recitals hereto, the Sublease has
not been modified or assigned;
(iii) the rent reserved under the Sublease and all other amounts due
are duly paid up to the date hereof to the extent determined
and owing;
(iv) no rent or other amounts payable under the Sublease have been
prepaid other than pursuant to the terms of the Sublease; and
(v) the Vendor, at the time of assignment of the Sublease to the
Company, will have good right, full power and absolute
authority to assign the Sublease in the manner provided
herein, subject to the Sublessor's consent
-17-
to such assignment and the consent of the lessor from whom the
Sublessor leases the Leased Real Property, which shall have
been duly obtained;
(m) Owned Real Property. The Company is not the beneficial or registered
owner of and has not agreed to acquire any real property or any
interest in any real property;
(n) Intellectual Property.
(i) Attached hereto as Part 1 of Schedule 3.1(n)(i) is a complete
and accurate list of all registered or pending trade-marks,
trade-xxxx applications, trade names, business names, patents,
patent applications, registered copyrights, service marks,
brand names, domain names, url's and registered industrial
designs owned by the Vendor and used by it in the conduct of
the Business all of which will be transferred to the Company
pursuant to the U.S. Drop-Down Agreement (collectively, the
"Owned Intellectual Property"), including registration numbers
and dates in respect of any registrations or applications for
registration thereof. Attached as Part 2 of Schedule 3.1(n)(i)
is a complete list of all trade-marks, patents, copyrights and
software licensed to the Vendor, its Affiliates or the Company
for use in carrying on the Business (collectively, the
"Licensed Intellectual Property" and, together with the Owned
Intellectual Property, the "Intellectual Property");
(ii) to the knowledge of the Vendor, there has been no infringement
or violation of the Company's or the Vendor's right in and to
the Owned Intellectual Property;
(iii) except as set out in Schedule 3.1(n)(iii), neither the Company
nor the Vendor has received written notice of any claim within
the 48 months immediately preceding the date hereof that the
use of the Owned Intellectual Property infringes or breaches
any industrial or intellectual property rights of any other
Person;
(iv) there are no interferences or other contested inter parties
proceedings either pending or, to the knowledge of the Company
and the Vendor, threatened, in any domestic or foreign patent
office in which the Vendor or the Company has filed an
application for registration of any patent included in Owned
Intellectual Property (an "Owned Patent"), or before any court
or administrative tribunal, relating to any pending
application with respect to any of the Owned Intellectual
Property. Each Owned Patent has been maintained and renewed by
the Vendor or the Company in all material respects in
accordance with all applicable provisions of law and
administrative regulations in all jurisdictions in which such
Owned Patent is registered;
-18-
(v) except as set forth in Schedule 3.1(n)(v) and except in
relation to the Licensed Intellectual Property, neither the
Company nor the Vendor has any obligation to compensate any
Person for the use of any of the Intellectual Property, nor
has the Company or the Vendor granted to any Person any
licence, option or other rights to use any of the Intellectual
Property in any manner, whether requiring the payment of
royalties or not;
(vi) except as set out in Schedule 3.1(n)(vi), immediately after
the U.S. Drop-Down the Company will own or have a valid right
to use the Intellectual Property; and
(vii) the Intellectual Property, together with the "Intellectual
Property" as defined in the Canadian Purchase Agreement,
consists of all of the Intellectual Property necessary for the
Purchased Entities to conduct the Business in all material
respects as presently conducted by the Vendor and Celestica
International Inc.
(o) Insurance. The Company has all of its property and assets insured
against loss or damage by all insurable hazards or risks on a
replacement cost basis and such insurance coverage will be continued
in full force and effect to and including the Time of Closing. The
Company is not in default with respect to any of the provisions
contained in any such insurance policy and has not failed to give
any notice or present any claim under any such insurance policy in a
due and timely fashion, except where such default would not, either
individually or collectively with other such defaults, reasonably be
expected to have a Material Adverse Effect;
(p) No Expropriation. No property or asset of the Company has been taken
or expropriated by any federal, provincial, state, municipal or
other authority nor has any notice or proceeding in respect thereof
been given or commenced;
(q) Material Contracts. Part 1 of Schedule 3.1(q) is a true and complete
list of all Material Contracts. Except as set out in Part 2 of
Schedule 3.1(q), all such Material Contracts are in good standing
and in full force and effect, and the Company is not in breach, and
there exists no condition, event or act which, with the giving of
notice or lapse of time or both, would constitute a breach by the
Company of any covenants, conditions or obligations contained
therein, except where such breach would not be reasonably expected
to have a Material Adverse Effect. The Company is not a party to or
bound by any Contract, the terms of which prevent the Company from
conducting the portion of the Business conducted by the Vendor as it
is currently conducted by the Vendor;
(r) Compliance with Laws; Licenses. Each of the Vendor and the Company
has complied in all material respects with the Laws that are
applicable to it and, in the case of the Vendor, to the conduct or
operation of the Business and to the
-19-
ownership or use by it of any of its properties owned or used by it
in its conduct of the Business. Schedule 3.1(r) sets out a complete
and accurate list of all material governmental and regulatory
licenses, permits, approvals, consents, certificates, registrations
and authorizations (the "Licenses") held by or granted to the Vendor
in the conduct the Business. Such Licenses collectively constitute
all of the Licenses that will be necessary to permit the Company to
lawfully conduct the portion of the Business conducted by the Vendor
in the manner in which the Vendor conducts such portion of the
Business, and to permit the Company to own and use the properties to
be transferred to it under the U.S. Drop-Down Agreement in the
manner in which the Vendor currently owns and uses such properties
in its conduct of the portion of the Business conducted by it. All
such Licenses are in good standing and the Company is not in default
or breach of any Licence in any material respect;
(s) Consents and Approvals. There is no requirement to make any filing
with, give any notice to or to obtain any licence, permit,
certificate, registration, authorization, consent or approval of,
any governmental or regulatory authority as a condition to the
lawful consummation by the Vendor of the transaction of purchase and
sale of the Purchased Interests contemplated by this Agreement
except for the filings, notifications, licenses, permits,
certificates, registrations, consents and approvals described in
Schedule 3.1(s) or which relate solely to the identity of the
Purchaser or the nature of any business carried on by the Purchaser
in respect of which no representation or warranty is provided
herein. There is no requirement under any Material Contract listed
in Schedule 3.1(q) to give any notice to, or to obtain the consent
or approval of, any party to such Material Contract relating to the
consummation of the transactions contemplated by this Agreement
except for the notifications, consents and approvals described in
Schedule 3.1(s);
(t) Financial Information.
(i) The Financial Information has been prepared in accordance with
internal accounting principles historically used in the
Business, which are in accordance with generally accepted
accounting principles, using the financial information
contained in, and the format of, the internal management
financial reports used by the current management of the
Business in the conduct of the Business. The Financial
Information accurately sets forth the results of the
operations of the Business throughout the periods covered
thereby, subject to adjustment for the PIP; and
(ii) except for the Assumed Liabilities, the Company does not have,
and will not have on the Closing Date any other liabilities;
and
-20-
(iii) prior to the Effective Time under the U.S. Drop-Down Agreement
the Company will not have had any liabilities or obligations
and will not have owned or held any property or assets or any
interests therein of any nature or kind whatsoever, and will
not have carried on any business;
(u) Absence of Changes. Except as disclosed in Schedule 3.1(u), during
the period after August 20, 2004 to the date of this Agreement, no
material adverse change has occurred in any of the assets, business,
financial condition or results of operation of the Business;
(v) Leases of Personal Property. Schedule 3.1(v) sets forth a true and
complete list in all material respects of the leases, licenses and
agreements relating to personal property and fixtures leased by or
licensed to the Vendor in the conduct by the Vendor of the Business
which leases or licenses will be assigned or sublicensed to the
Company;
(w) Fixed Assets. Schedule 3.1(w) lists, in all material respects, all
of the tangible assets, machinery, equipment, vehicles, furniture,
office equipment, computer hardware and software that will be owned
by the Company immediately after the U.S. Drop-Down and wherever
situate;
(x) Condition of Assets. All the property and assets listed in Schedules
3.1(v) and 3.1(w) are in operating condition, having regard to the
use and age thereof, except only for reasonable wear and tear;
(y) Inventories. Except as disclosed in Schedule 3.1(u), the raw
materials, work-in-process and finished goods inventories owned by
the Vendor and used by it in the conduct by it of the portion of the
Business carried on by it which are to be contributed to the Company
pursuant to the U.S. Drop-Down Agreement are of a quality and
quantity that is useable or saleable in the ordinary course of the
Business, are fit for the purposes for which they are intended
(except to the extent, if any, written down to net realizable value
on the Financial Information and are carried on the books of the
Vendor (and will be reflected on the Audited Closing Date Statement
for the transaction of purchase and sale contemplated hereunder) at
the lower of cost and net realizable value. Such inventories are
labelled and stored in compliance in all material respects with
applicable federal, provincial and local laws, ordinances, and
governmental rules and regulations;
(z) Accounts Receivable and Prepaid Expenses. Schedule 3.1(z) sets forth
a detailed list of the Accounts Receivable as at September 15, 2004,
which list was true and correct as of such date. The Accounts
Receivable set out in Schedule 3.1(z) are bona fide, good and
legally enforceable. Except as set out in Schedule 3.1(z), the
Vendor does not have any prepaid expenses relating to its conduct of
the Business as at September 15, 2004. All accounts receivable of
the Vendor relating to the portion of the Business conducted by the
Vendor immediately prior
-21-
to the Effective Time will be contributed to the Company pursuant to
the U.S. Drop-Down Agreement;
(aa) Employment Matters.
(i) Schedule 3.1(aa) contains a complete and accurate list of all
employees of the Vendor whose employment will be transferred
to and assumed by the Company pursuant to the U.S. Drop-Down
Agreement (the "Employees"), their respective positions,
current salaries, bonuses, sales incentives and other
remunerations with the Vendor, and all stock options, dates of
last salary increases, and dates of hire with the Vendor. For
greater certainty, none of the Leave Employees will be
included among the Employees;
(ii) except as disclosed in Schedule 3.1(aa) and except for written
offer letters which do not (i) specify a fixed or minimum
period of employment, or (ii) contain any provisions regarding
notice of dismissal or payment in lieu thereof, the Company is
not currently a party to any written agreements with any
Employees; and
(iii) except as disclosed in Schedule 3.1(aa), there are no
outstanding, pending, or, to the Vendor's knowledge,
threatened, actions, claims, complaints, demands, orders,
prosecutions or suits against the Company or the Vendor or any
of their respective directors or officers in respect of the
employment of the Employees in the conduct by the Vendor of
the portion of the Business conducted by it, pursuant to or
under any applicable rules, regulations, orders or laws
relating to employment;
(bb) Pension and Benefit Matters.
(i) Set forth on Schedule 3.1(bb)(i) is a complete list of (i) all
"employee benefit plans" as defined in Section 3(3) of ERISA,
sponsored by the Company or the Vendor or to which the Company
is required to contribute, covering any present or former
officers or employees of the Company, and (ii) all other
fringe benefit plans and any other employee benefit
arrangements or payroll practices (whether or not employee
benefit plans), deferred compensation, bonus plans and
employment agreements (whether written or oral) to which the
Company or the Vendor is a party in respect of any present or
former officers or employees of the Company, or with respect
to which the Company is required to make payments, transfers
or contributions or have any liability (collectively
hereinafter referred to as the "Benefit Plans");
(ii) the Vendor has made available to the Purchaser true and
complete copies, as applicable, of (i) the plan documents and
all amendments thereto and summary plan descriptions and
subsequent summaries of material modifications, and (ii) all
related trust or custodial agreements,
-22-
administrative and similar agreements, and insurance contracts
or other funding agreements which relate to such Benefit
Plans;
(iii) neither the Company nor the Vendor in the operation of the
Business nor any other organization which is a member of a
controlled group of organizations within the meaning of Code
Sections 414(b), (c), (m) or (o) of which the Company is a
member ("Controlled Group Member"), contribute to or has
contributed to or sponsors or maintains or has sponsored or
maintained any "employee pension benefit plan" as defined in
Section 3(2) of ERISA which is subject to Title IV of ERISA or
any multiemployer plan as defined in Section 3(37) of ERISA;
(iv) there has been no material violation by the Company or the
Vendor in the operation of the Business of the continuation
coverage requirements of group health plans as set forth in
COBRA with respect to any Benefit Plan to which such
continuation coverage requirements apply. There has been no
material violation by the Company or the Vendor in the
operation of the Business of the health insurance obligations
(sometimes referred to as "HIPAA") imposed by Section 9801 of
the Code and Part 7 of Subtitle B of Title I of ERISA with
respect to any Benefit Plan which is a "group health plan" (as
defined in Section 5000(b)(1) of the Code and Section 706 of
ERISA) to which such insurance obligations apply (including
the requirement that certificates of creditable coverage be
provided to certain employees and their dependents);
(v) except as set forth on Schedule 3.1(bb), other than such
continuation of benefit coverage under group health plans as
is required by COBRA, the cost of which is fully paid by the
former employee or his or her dependent, neither the Company
nor any Controlled Group Member maintains retiree life or
retiree health plans;
(vi) except as set forth in Schedule 3.1(bb), neither the Company
nor any Controlled Group Member is bound by any collective
bargaining agreement or any other agreement or legally binding
arrangement to maintain, with respect to any employee of the
Company, any Benefit Plan described in Section 3.1(bb)(i); and
(vii) all capitalized terms herein used in this Section 3.1(bb) and
that are otherwise not defined herein, shall have the same
definitions as set forth in Section 3 of ERISA;
(cc) Contracts with Non-Arm's Length Persons. Except as set forth in
Schedule 3.1(cc), there are no existing contracts or arrangements to
which the Company will, immediately following the U.S. Drop-Down, be
a party or by which the Company will be bound in which the Vendor,
any director or officer of the
-23-
Company or any other Person not dealing at arm's length with the
Vendor, the Company or any director or officer of the Company, has
an interest, whether directly or indirectly, including, without
limitation, arrangements for the payment of management or consulting
fees of any kind whatsoever;
(dd) Bank Accounts, etc. Schedule 3.1(dd) sets forth the name of each
bank or other depository at which the Company will, immediately
after the U.S. Drop-Down, maintain any bank account, trust account
or safety deposit box and the names of all Persons authorized to
draw thereon or who have authorized access thereto;
(ee) Absence of Guarantees. The Company has not given or agreed to give,
or will, immediately following the U.S. Drop-Down, be a party to or
bound by, any guarantee of indebtedness, indemnity, bond or
suretyship or other obligations of another Person or Persons or any
other commitment by which the Company is or will be, or is or will
be contingently, responsible for such indebtedness or other
obligations except as specifically provided for or referred to in
this Agreement or in any schedule hereto;
(ff) Corporate Records. The minute books of the Company contain, and will
contain at the Closing Date, accurate and complete minutes of all
meetings and resolutions of its members and managers held since the
date of its incorporation. All resolutions of the Company were duly
passed and all meetings of the Company were duly held, and the
Company's register of members and interests is, and will at the
Closing Date be, complete and accurate and shall reflect all
transactions contemplated by this Agreement;
(gg) Environmental Matters.
(i) The Company has never conducted the Business at any location
other than at the Leased Real Property. Except as disclosed in
Schedule 3.1(gg) and except as would not reasonably be
expected to have a Material Adverse Effect, the portion of the
Business conducted by the Vendor has been and is being carried
on by the Vendor, and the processes and undertakings of the
Vendor relating to such portion of the Business have been and
are being conducted in all material respects in compliance
with all applicable Environmental Laws and Environmental
Orders. Except as disclosed in Schedule 3.1(gg), to the
Vendor's knowledge there is no fact which would reasonably be
expected to give rise to a notice by a Governmental Authority
to the Company of non-compliance with any Environmental Laws
or Environmental Orders;
(ii) except as disclosed in Schedule 3.1(gg), neither the Vendor
(only in respect of the portion of the Business it conducts)
nor the Company has received or been served with:
(A) an Environmental Order;
-24-
(B) a notice of non-compliance with any Environmental Laws
or Environmental Orders; or
(C) a summons, complaint, or other legal process initiating
a legal action against the Vendor or the Company
relating to an alleged violation of any Environmental
Law;
(iii) except as disclosed in Schedule 3.1(gg), neither the Vendor
nor the Company has caused or permitted the Release of any
Hazardous Substances on or off-site from the Leased Real
Property, and all Hazardous Substances disposed of, treated or
stored by the Vendor in the conduct of the portion of the
Business it conducts have been disposed of, treated and stored
in compliance, in all material respects, with all applicable
Environmental Laws;
(iv) except as disclosed in Schedule 3.1(gg), to the Vendor's
knowledge there are no Hazardous Substance(s) present on, in
or under the Leased Real Property;
(v) the Vendor and the Company have provided to the Purchaser full
and complete copies of (i) all citations, notices of violation
and inspection reports of Governmental Entities, (ii) site
assessment reports generated by third parties or the Vendor,
(iii) all hazardous waste general reports to Governmental
Entities, (iv) chemical lists for chemicals used an stored at
the Real Property, (v) Form R-Toxic Chemical Release Inventory
and (vi) Tier II reports, in each case for the previous three
years to the extent any of the foregoing are in their
respective possession, custody or control and relate to
environmental conditions and environmental compliance of the
portion of the Business conducted by the Vendor from the
Leased Real Property;
(vi) there has never been a conviction of the Company or the Vendor
of an offence for non-compliance with any Environmental Law or
a fine or sentence imposed on the Company or the Vendor, or
settlement of any prosecution by the Company or the Vendor in
respect of any Environmental Law, in each case in connection
with the conduct by the Company or the Vendor of the portion
of the Business conducted by the Vendor;
(vii) neither the Vendor nor the Company has received written notice
that it is a potentially responsible person under CERCLA or
any applicable comparable state Environmental Law with respect
to either:
(A) the Leased Real Property or any other place or places
where the portion of the Business conducted by the
Vendor is or has been conducted by the Vendor; or
-25-
(B) any off-site disposal, recycling or waste treatment
facility to which waste or by-products of the Business
have been sent; and
(viii) neither the Vendor nor the Company has received written
notice that all or any portion of the Leased Real Property or
any other place or places where the portion of the Business
conducted by the Vendor is or has been conducted by the Vendor
is or has been the subject of investigation or other response
actions under CERCLA or is listed on the United States
Environmental Protection Agency's National Priorities List or
on any similar ranking or listing under any comparable state
Environmental Law.
The representations and warranties in this Section 3.1(gg) are the
only representations and warranties of the Vendor with respect to
environmental matters including, without limitation, with respect to
Environmental Laws, Hazardous Substances, Environmental Orders or
Environmental Permits, and all other representations and warranties
of the Vendor in this Agreement shall be interpreted in a manner
consistent with such limitations.
(hh) Product Compliance and Warranties. Except as set forth in Schedule
3.1(hh) and Schedule 3.1(u), in the last 12 months no product
warranty, product defect or similar claim in an amount in excess of
$100,000 has been made against the Company or the Vendor or against
any of the other Power Vendors with respect to any Power Products
sold by the Vendor or any of the other Power Vendors in the course
of conducting the Business;
(ii) Books and Records. The books and records of the Company accurately
set out and disclose the financial position of the Company as at the
date of such books and records;
(jj) Litigation. Except as described in Schedule 3.1(jj), there are no
actions, suits or proceedings (whether or not purportedly on behalf
of the Company or the Vendor or any of the other Power Vendors)
pending or, to the Vendor's knowledge, threatened against or
affecting the Company or the Vendor or any of the other Power
Vendors (to the extent resulting from the conduct of the Business),
at law or in equity or before or by any federal, provincial, state,
municipal or other governmental department, court, commission,
board, bureau, agency or instrumentality, domestic or foreign, or by
or before an arbitrator or arbitration board;
(kk) Collective Agreements. Neither the Company nor the Vendor (with
respect to the conduct of the portion of the Business conducted by
it) has entered into any Contracts with any labor union or employee
association. To the Vendor's knowledge, there are not any current
attempts to organize or establish any labor union or employee
association with respect to any Employees, nor is there any
certification of any such union with regard to a bargaining unit;
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(ll) Taxes.
(i) Except as provided in Schedule 3.1(ll), the Company has not
been required to file, and has not filed, any Tax Returns for
the period from its formation to the Time of Closing;
(ii) since the date of formation of the Company to the Time of
Closing, there shall not have been due and payable by the
Company to any Governmental Entity any payment, instalment or
remittance of Taxes;
(iii) there are no outstanding waivers or agreements to extend the
statutory period of limitations applicable to the assessment
of any Taxes or deficiencies against the Company;
(iv) neither the Company nor the Vendor has received any written
notice that any claim has been made by a foreign Governmental
Entity that the Company is subject to taxation by that
jurisdiction;
(v) the Company is not a party to or member of any joint venture,
partnership, limited liability company, or other arrangement
or contract which could be treated as a partnership for Tax
purposes;
(vi) there are no liens for Taxes on the assets used by the Vendor
in connection with its conduct of the portion of the Business
conducted by it, other than liens for personal property Taxes
not yet due and payable;
(vii) the Company is not a party to any Tax sharing agreement or
similar arrangement;
(viii) except as provided in Schedule 3.1(ll), the Company is and
has been a disregarded entity for federal Tax purposes within
the meaning of Treasury Regulation Section 301.7701-2(c) 2(i),
and for all applicable state and local Tax purposes, from the
date of its formation through and including the Time of
Closing; and
(ix) no portion of the Purchase Price, and none of the liabilities
of the Company, if satisfied, would constitute "parachute
payments" within the meaning of Section 280G of the Code;
(mm) Customers and Suppliers. Except as set out in Schedule 3.1(mm),
neither the Company nor the Vendor has received written notice from
any current customer or supplier of the Business, threatening to
cancel or otherwise terminate such customer's or supplier's
relationship with the Company or the Vendor (with respect to the
Vendor's conduct of the Business), nor does the Vendor have
knowledge of any such threat;
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(nn) Absence of Certain Business Practices. Neither the Company nor the
Vendor in the conduct of the Business has, directly or indirectly,
within the past five years given or agreed to give any material
contribution, gift or similar benefit to or for the private use of
or at the direction of any customer, client, supplier, governmental
employee or other Person who is or would be in a position to help or
hinder the Business (or assist the Company or the Vendor, as the
case may be, with any actual or proposed transaction relating to the
Business) which would subject the Company to any damage or penalty
under any applicable Law;
(oo) Dividends. The Company has never, directly or indirectly, declared
or paid any distributions on its interests and the Company has not
directly or indirectly redeemed, purchased or otherwise acquired any
of its outstanding interests of any class or agreed to do so; and
(pp) Full Disclosure. None of the foregoing representations and
statements of fact contains any untrue statement of a material fact
or omits to state any material fact necessary to make any such
statement or representation not misleading.
Between the date of this Agreement and the Closing Date, the Purchaser
shall promptly notify the Vendor in writing if it becomes aware (a) that
any representation or warranty of the Vendor is incorrect or inaccurate,
or (b) of the occurrence after the date of this Agreement of any fact or
condition that would be reasonably likely to result in any representation
or warranty of the Vendor being incorrect or inaccurate had such
representation or warranty been made as of the time of the occurrence of,
or the Purchaser's discovery of, such fact or condition. No knowledge of
the Purchaser shall, however, be implied solely as a result of the due
diligence investigations undertaken by or on behalf of the Purchaser or
its Affiliates prior to Closing.
3.2 Survival of Representations and Warranties of the Vendor.
The representations and warranties of the Vendor contained in this
Agreement and any agreement, instrument, certificate or other document executed
or delivered pursuant hereto shall survive the closing of the transactions
contemplated hereby until March 31, 2006 unless a bona fide notice of a claim
shall have been made in writing before such date, in which case the
representation and warranty to which such notice applies shall survive in
respect of that claim until the final determination or settlement of the claim
and, notwithstanding such closing nor any investigation made by or on behalf of
the Purchaser, shall continue in full force and effect for the benefit of the
Purchaser during such period, except that:
(a) the representations and warranties set out in Section 3.1(ll) shall
survive for a period of ninety days after the expiration of applicable statutes
of limitation (after giving effect to any extensions or waivers) unless a bona
fide notice of a claim shall have been made in writing before such date, in
which case the representation and warranty to which such notice applies shall
survive in respect of that claim until the final determination or settlement of
the claim and, notwithstanding such closing nor any investigation made by or on
behalf of the
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Purchaser, shall continue in full force and effect for the benefit of the
Purchaser during such period;
(b) the representations and warranties set out in Section 3.1(gg) shall
survive and continue in full force and effect for a period of five years
following the Closing Date unless a bona fide notice of a claim shall have been
made in writing before such date, in which case the representation and warranty
to which such notice applies shall survive in respect of that claim until the
final determination or settlement of the claim and, notwithstanding such closing
nor any investigation made by or on behalf of the Purchaser, shall continue in
full force and effect for the benefit of the Purchaser during such period;
(c) the representations and warranties set out in Sections 3.1(a), 3.1(b)
and 3.1(c), the first sentence of Sections 3.1(f) and 3.1(g), and Section
3.1(k)(i) (and the corresponding representations and warranties set out in the
certificates delivered on behalf of the Vendor pursuant to Section 6.1(a)) shall
survive and continue in full force and effect without limitation of time; and
(d) a claim for any breach of any of the representations and warranties
contained in this Agreement or in any agreement, instrument, certificate or
other document executed or delivered pursuant hereto involving fraud or
fraudulent misrepresentation may be made at any time following the Closing Date,
subject only to applicable limitation periods imposed by law.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
4.1 Representations and Warranties.
The Purchaser represents and warrants to the Vendor as follows and
acknowledges and confirms that the Vendor is relying on such representations and
warranties in connection with the sale by the Vendor of the Purchased Interests:
(a) Existence and Capacity. The Purchaser is a corporation duly
incorporated, validly existing and in good standing under the laws
of Delaware and it has the corporate power to enter into this
Agreement and perform its obligations hereunder;
(b) Financial Ability. The Purchaser has the financial means to satisfy
its obligation under Section 2.2 to pay the Purchase Price to the
Vendor, and the performance of such obligation is not subject to any
requirement for the Purchaser or its Affiliates to provide any
notice, obtain any consent or approval or meet any financial or
other test;
(c) Authorization. This Agreement has been duly authorized, executed and
delivered by the Purchaser and is a legal, valid and binding
obligation of the Purchaser, enforceable against the Purchaser by
the Vendor in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency and other
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laws affecting the enforcement of rights of creditors generally and
except that equitable remedies may only be granted in the discretion
of a court of competent jurisdiction;
(d) No Violation. The execution and delivery of this Agreement by the
Purchaser and the consummation by the Purchaser of the transaction
of the purchase and sale of the Purchased Interests provided for
herein do not result in the violation by the Purchaser of, or
constitute a default under or conflict with: (i) any provision of
the constating documents or by-laws or resolutions of the board of
directors (or any committee thereof) or shareholders of the
Purchaser; (ii) any judgment, decree, order or award of any court,
governmental body or arbitrator having jurisdiction over the
Purchaser; or (iii) any law, statute, ordinance, regulation or rule
applicable to the Purchaser, except where such violation, default or
conflict would not prevent or prohibit consummation by the Purchaser
of the transactions provided for herein; and
(e) Consents and Approvals. There is no requirement for the Purchaser to
make any filing with, give any notice to or obtain any licence,
permit, certificate, registration, authorization, consent or
approval of, any governmental or regulatory authority as a condition
to the lawful consummation by the Purchaser of the transaction of
purchase and sale of the Purchased Interests contemplated by this
Agreement.
4.2 Survival of Representations and Warranties of the Purchaser.
The representations and warranties of the Purchaser contained in
this Agreement and any agreement, instrument, certificate or other document
executed or delivered pursuant hereto shall survive the closing of the
transactions contemplated hereby for a period of one year after the Closing Date
unless a bona fide notice of a claim shall have been made in writing before the
expiry of that period, in which case the representation and warranty to which
such notice applies shall survive in respect of that claim until the final
determination or settlement of the claim, and, notwithstanding such closing nor
any investigation made by or on behalf of the Vendor, shall continue in full
force and effect for the benefit of the Vendor during such period, except that:
(a) the representations and warranties set out in Sections 4.1(a) and
4.1(c) (and the corresponding representations and warranties set out
in the certificates delivered on behalf of the Purchaser pursuant to
Section 6.2(b) shall survive and continue in full force and effect
without limitation of time; and
(b) a claim for any breach of any of the representations and warranties
contained in this Agreement or in any agreement, instrument,
certificate or other document executed or delivered pursuant hereto
involving fraud or fraudulent misrepresentation may be made at any
time following the Closing Date, subject only to applicable
limitation periods imposed by law.
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ARTICLE 5
COVENANTS
5.1 Access to the Company.
From the date hereof until the Time of Closing, the Vendor shall
make available to the Purchaser and its authorized representatives all title
documents, Contracts, financial statements, minute books, share certificate
books, share registers, plans, reports, licences, orders, permits, books of
account, accounting records, constating documents and all other documents,
information and data of the Company and the Vendor with respect to its portion
of the Business. The Vendor shall cause the Company to afford the Purchaser and
its authorized representatives reasonable access during normal business hours to
the Business and the senior management of the Company and the property, assets,
records and documents of the Company and the Vendor with respect to its portion
of the Business, which access will not include any right to conduct any invasive
investigation or to disrupt the Business and shall be conducted in accordance
with any reasonable requirements of the Vendor and the Company.
5.2 Delivery of Books and Records.
At the Time of Closing the Vendor shall deliver to the Purchaser all
of the books and records of the Company. Following the Time of Closing, the
Vendor shall permit the Purchaser to have access (including without limitation
by electronic means) to the books and records of the Vendor relating to the
Business. Each of the Purchaser and the Vendor agrees that it will preserve the
books and records so delivered to it (or retained by it, as the case may be) for
a period of six years from the Closing Date, or for such longer period as is
required by any applicable law, and will permit the other or its authorized
representatives reasonable access thereto in connection with the affairs of the
other relating to its matters. If, at any time during the three-month period
prior to the expiration of the applicable period referred to in the preceding
sentence, the Purchaser or Vendor, as the case may be, (in either case, the
"notifying party") provides written notice to the other that the notifying party
wishes to make a copy of or repossess all or part of the books and records, or
the notifying party, at any time and from time to time, provides written notice
to the other that the notifying party wishes to make a copy of all or part of
such books and records, the other party will provide the notifying party with an
opportunity to make such copies of such books and records within a reasonable
period of time or repossess such books and records within 30 days following the
expiration of the applicable period referred to in the preceding sentence, as
the case may be.
5.3 Conduct Prior to Closing.
Without in any way limiting any other obligations of the Vendor
hereunder, during the period from the date hereof to the Time of Closing:
(a) Conduct Business in the Ordinary Course. The Vendor shall use
reasonable commercial efforts to conduct the portion of the Business
conducted by it in the ordinary and normal course of business
consistent with past practice (other than changes to the conduct of
business arising out of the implementation of the PIP),
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and to prevent the Company, without the prior written consent of the
Purchaser, from entering into any transaction or refrain from doing
any action which, if effected before the date of this Agreement,
would constitute a breach of any representation, warranty, covenant
or other obligation of the Vendor contained herein. Without limiting
the generality of the foregoing, and except in connection with the
implementation of the PIP, the Vendor shall not make any material
changes to the terms of employment of any of the Employees or grant
salary increases other than in the ordinary course, consistent with
past practices in the Business, or to terminate any of the
Employees' employment other than for just cause, in each case unless
requested by the Purchaser in writing to do so;
(b) Continue Insurance. The Vendor shall use reasonable commercial
efforts to continue to maintain in full force and effect all
policies of insurance or renewals thereof related to its conduct of
the Business now in effect, shall take out, at the expense of the
Purchaser, such additional insurance as may be reasonably requested
by the Purchaser and shall give all notices and present all claims
under all policies of insurance in a due and timely fashion;
(c) Regulatory Consents. The Vendor shall use reasonable commercial
efforts to obtain, at or prior to the Time of Closing, from all
appropriate federal, provincial, state, municipal or other
governmental or regulatory bodies, the licences, permits, consents,
approvals, certificates, registrations and authorizations described
in Schedule 3.1(s);
(d) Contractual Consents. The Vendor shall use reasonable commercial
efforts to give or obtain the notices, consents and approvals
described in Schedule 5.3(d);
(e) Preserve Goodwill. The Vendor shall use reasonable commercial
efforts (i) to preserve intact the portion of the Business it
conducts and its property, assets, operations and affairs relating
to such portion of the Business and to cause the portion of the
Business conducted by it to be carried on as currently conducted,
and (ii) to preserve for the Purchaser the goodwill of suppliers,
customers and others having business relations with the portion of
the Business that the Vendor conducts; and
(f) Corporate Action. The Vendor shall use reasonable commercial efforts
to take and cause the Company to take all necessary corporate
action, steps and proceedings to complete the transfer of the
Purchased Interests to the Purchaser and to cause all necessary
meetings of directors and shareholders of the Vendor and the Company
to be held for such purpose.
5.4 Delivery of Documents.
Upon Closing, the Vendor shall deliver to the Purchaser all
necessary transfers, assignments and other documentation reasonably required to
transfer the Purchased Interests to the Purchaser with a good and marketable
title, free and clear of all Encumbrances.
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5.5 Employee Plans.
Subject to the completion of the purchase and sale of the Purchased
Interests pursuant to this Agreement, effective as of the Effective Time, the
Employees shall cease participation in the Employee Plans. The Purchaser agrees
that it will, or will cause the Company to, establish plans for the Employees in
respect of their employment by the Company from and after the Effective Time.
5.6 Use of Name.
The Purchaser agrees that it shall as soon as practicable after the
Time of Closing and in any event no later than March 22, 2005, cause the Company
to cease any use of the name "Celestica" or any logos, trade-marks or
derivatives thereof (other than the letters "CPS" which the Purchaser and its
Affiliates shall be entitled to use without limitation by Celestica Parent or
any of its Subsidiaries) in the style or manner in which it represents itself or
conducts its business, including without limitation in the labelling or
packaging of products and goods sold by the Company, and on its letterhead,
invoices and other stationery; provided that the Purchaser shall, or shall cause
the Company to, notify the Company's component vendors within 45 days of the
Closing Date to cease branding product components with the "Celestica" name, or
any logos, trade-marks or derivatives thereof (other than the letters "CPS"
which the Purchaser and its Affiliates shall be entitled to use without
limitation by Celestica Parent or any of its Subsidiaries).
5.7 Tax Matters.
(a) The Purchaser shall cause to be prepared and filed on a timely basis,
all Tax Returns of the Company for periods ending after the Closing Date. The
Vendor and the Purchaser shall cooperate fully with each other and make
available to each other in a timely fashion such data and other information as
may reasonably be required for the preparation of any Tax Return of the Company
for a period ending on, prior to, or including the Closing Date and shall
preserve such data and other information until the expiration of any applicable
limitation period under any applicable Law with respect to Taxes.
(b) From the date hereof, the Vendor will not and, until the Time of
Closing, the Company shall not make any election in respect of Taxes that could
reasonably be expected to affect the Purchaser's or the Company's liability for
Taxes for any period commencing after the Effective Time without the consent of
the Purchaser.
(c) (i) Subject to Section 5.7(c)(ii), any documentary, sales, use,
stamp or other similar Taxes and recording and filing fees
(including any penalties and interest) incurred in connection
with the transactions contemplated by this Agreement shall be
borne and paid by the Purchaser.
(ii) Notwithstanding Section 5.7(c)(i), any GST (together with
penalties and interest thereon, if any) arising as a
consequence of the transfer to the Company of those
"Transferred Assets" (as defined in the U.S. Drop-
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Down Agreement) physically located in Canada, in respect of
which the Company is to timely deliver to Celestica
International Inc. the "drop-shipment certificate" under
subsection 179(2) of the ETA, as contemplated in Section 2.5
of the U.S. Drop-Down Agreement, shall be borne and paid as to
50% by the Vendor and 50% by the Purchaser.
(d) The Vendor, the Company and the Purchaser agree that neither of them
will comply with the provisions of any so-called bulk transfer or bulk sales
laws of any jurisdiction in connection with the transactions contemplated by
this Agreement.
(e) All amounts paid pursuant to this Agreement by one party to another
party (other than interest payments, if any) shall be treated by such parties
for tax purposes as an adjustment to the Purchase Price to the extent permitted
by law.
(f) Neither the Vendor nor the Purchaser shall file any Tax Return or take
any position with any Governmental Entity that is inconsistent with the
allocation of the Purchase Price (and such other amounts as may be required for
Tax purposes) set forth in Schedule 2.3 (as such allocation may be adjusted
pursuant to the Purchase Price Adjustment Agreement) or that treats the
transaction contemplated by this Agreement in a manner inconsistent with the
terms of this Agreement unless otherwise required by a Final Determination;
provided, however, that such Final Determination shall not in any manner bind
the other party. The Vendor and the Purchaser agree to cooperate with the other
in preparing Form 8594 for filing by each and to furnish the other with a copy
of such Form prepared in draft form within a reasonable period before its filing
due date.
(g) The Purchaser and the Vendor agree to use the standard procedure set
forth in Revenue Procedure 96-60, as revised and superseded by Revenue Procedure
2004-53, with respect to wage reporting.
(h) The Vendor and the Purchaser agree, and agree to cause their
respective Affiliates, to treat the Purchaser's purchase of the Purchased
Interests as a taxable purchase and sale of assets for federal and applicable
state and local Tax purposes and agree, and agree to cause their respective
Affiliates, to take no position inconsistent with such treatment on any Tax
Return, in any proceeding with any Governmental Entity or otherwise unless
otherwise required by a Final Determination; provided, however, that such Final
Determination shall not in any manner bind the other party.
(i) The Vendor shall deliver to the Purchaser a non-foreign affidavit
dated as of the Closing Date, in form and substance required under the Treasury
Regulations issued pursuant to Section 1445 of the Code, stating that the Vendor
is not a "foreign person" as defined in Section 1445 of the Code.
(j) All real property taxes, personal property taxes and similar
obligations levied with respect to the assets of the Company for a taxable
period which includes (but does not end on) the Closing Date (collectively, the
"Apportioned Obligations"), excluding any Taxes covered by Section 5.7(c) of
this Agreement, shall be apportioned between the Vendor and the Purchaser as
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of the Closing Date based on the number of days of such taxable period included
in the taxable period ending on and including the Closing Date (the "Pre-Closing
Tax Period") and the number of days of such taxable period included in the
taxable period beginning the day after the Closing Date (the "Post-Closing Tax
Period"). The Vendor shall be liable for the proportionate amount of such taxes
that is attributable to the Pre-Closing Tax Period. Within 90 days after the
Closing Date, the Vendor and the Purchaser shall present a statement to the
other setting forth the amount of reimbursement to which each is entitled under
this Section together with such supporting evidence as is reasonably necessary
to calculate the proration amount. The proration amount shall be paid by the
party owing it to the other within 10 days after delivery of such statement.
Thereafter, the Vendor shall notify the Purchaser upon receipt of any xxxx for
real or personal property Taxes relating to the assets contributed to the
Company under the U.S. Drop-Down Agreement, part or all of which is attributable
to the Post-Closing Tax Period, and shall promptly deliver such xxxx to the
Purchaser who shall pay the same to the appropriate Governmental Entity,
provided that if such xxxx covers the Pre-Closing Tax Period, the Vendor shall
also remit prior to the due date of assessment to the Purchaser payment for the
proportionate amount of such xxxx that is attributable to the Pre-Closing Tax
Period. If either the Vendor or the Purchaser shall thereafter make a payment
for which it is entitled to reimbursement under this Section, the other party
shall make such reimbursement promptly but in no event later than 30 days after
the presentation of a statement setting forth the amount of reimbursement to
which the presenting party is entitled along with such supporting evidence as is
reasonably necessary to calculate the amount of reimbursement. Any payment
required under this Section and not made within 10 days of delivery of the
statement shall bear interest at the rate per annum determined, from time to
time, under the provisions of Section 6621(a)(2) of the Code for each day until
paid.
(k) Vendor and the Company shall use reasonable commercial efforts to
obtain and furnish to Purchaser applicable Tax clearance certificates, good
standing certificates and other Tax lien waiver certificates as may be required
by law.
5.8 Product Warranty Claims.
After the Closing Date the Vendor shall continue to be responsible
for all Claims made by customers of the Business under the product warranties
provided by the Vendor in respect of products sold by the Vendor in the conduct
of the Business prior to the Effective Time (but not in respect of any products
sold or delivered by the Company after the Effective Time), in each case
accordance with such product warranties.
5.9 Shanghai Employees.
Between the date hereof and the Closing Date, the Vendor shall
assist Datel Electronic Technology (Shanghai) Co., Ltd. in its efforts to employ
the employees of the Business in Shanghai, provided that it shall not be
required to incur any cost or expense in using such efforts.
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5.10 Leave Employees.
The Purchaser shall cause the Company to offer employment to Leave
Employees who present themselves for work with the Company within six months of
the Closing Date (the "Leave Expiry Date"), or for Leave Employees on statutory
leave, within such later period as is prescribed by law, on the same terms and
conditions of employment as are applicable to the Employees who are employed by
the Company (or its successors) at the time of the Leave Employees' respective
return to work, which employment, if accepted, shall be effective upon their
respective return to work (any such Leave Employee who accepts such offer of
employment being herein referred to as a "Transferred Employee"). Until the
earliest to occur of (i) the date on which a Leave Employee becomes a
Transferred Employee and (ii) the Leave Expiry Date, a Leave Employee shall
remain employed by the Vendor and shall continue to receive benefits under the
Vendor's Plans.
5.11 Insurance.
The Vendor shall, from time to time, upon receipt of the written
direction of the Purchaser, make claims under the Vendor's policies of insurance
with respect to product liability claims asserted against the Company in respect
of the manufacture of Power Products by the Vendor prior to the Closing Date,
and, without duplication of any payments made by or on behalf of the Vendor (or
any successors) arising out of a claim for indemnity under Section 8.1(e), upon
receipt by the Vendor of proceeds paid by the insurer under such policies of
insurance, shall pay such proceeds to the Company. Any direction delivered by
the Purchaser pursuant to this Section 5.11 shall set out in reasonable detail
the nature of the claim asserted against the Company.
5.12 Survival of Covenants.
All of the covenants of any of the parties contained in this
Agreement (with the exception of those that, by their terms, are to be fulfilled
on or before Closing) shall survive the Closing indefinitely.
ARTICLE 6
CONDITIONS OF CLOSING
6.1 Conditions of Closing in Favor of the Purchaser.
The sale and purchase of the Purchased Interests is subject to the
following terms and conditions for the exclusive benefit of the Purchaser, to be
fulfilled or performed at or prior to the Time of Closing:
(a) Representations and Warranties. The representations and warranties
of the Vendor contained in Article 3 of this Agreement shall be true
and correct in all material respects at the Time of Closing, with
the same force and effect as if such representations and warranties
were made at and as of such time, except to the extent that such
representations and warranties are made as of a specified date, in
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which case such representations and warranties shall have been true
and correct in all material respects as of the specified date, and a
certificate of a senior officer of the Vendor dated the Closing Date
to that effect shall have been delivered to the Purchaser;
(b) Covenants. All of the terms, covenants and conditions of this
Agreement to be complied with or performed by the Vendor or the
Company at or before the Time of Closing shall have been complied
with or performed in all material respects and a certificate of a
senior officer of each of the Vendor and the Company dated the
Closing Date to that effect shall have been delivered to the
Purchaser;
(c) Regulatory Consents. There shall have been obtained, from all
appropriate federal, state, provincial, municipal or other
governmental or administrative bodies, such licences, permits,
consents, approvals, certificates, registrations and authorizations
as are required to be obtained by the Vendor to permit the change of
ownership of the Purchased Interests contemplated hereby including,
without limitation, those described in Schedule 3.1(s);
(d) Contractual Consents. The Vendor shall have given the notices, and
obtained the consents and approvals required under the Lease dated
March 12, 1985, between Xxxx/Intereal Portland and OECO Corporation
as amended by the First Amended and Restated Sublease dated April 1,
1996, between OECO Corporation and VXI Electronics, Inc. and by the
first amendment to the First Amended and Restated Sublease dated
April 30, 1999, between OECO Corporation and VXI Electronics, Inc.
and by the second amendment to the First Amended and Restated
Sublease dated June 1, 1999, between OECO and VXI Electronics, Inc.
in form and substance satisfactory to the Purchaser, acting
reasonably;
(e) Opinion of Counsel to the Vendor. The Purchaser shall have received
an opinion dated the Closing Date from counsel for the Vendor in
such form and as to such matters as the Purchaser or its counsel may
reasonably request, provided that, insofar as the opinions expressed
in such opinion are based on matters of fact, such opinions may be
based upon certificates of the Vendor, public officials and officers
of the Vendor or the Company and, as to matters involving the laws
of jurisdictions in which such counsel is not qualified to practice,
on opinions of recognized local counsel in such jurisdictions;
(f) No Action or Proceeding. No legal or regulatory action or proceeding
shall be pending or threatened by any person to enjoin, restrict or
prohibit the purchase and sale of the Purchased Interests
contemplated hereby;
(g) Resignation of Directors and Officers. Such directors and officers
of the Company as the Purchaser may designate by notice in writing
given to the Vendor at least three Business Days prior to the
Closing Date shall have resigned in favor of nominees of the
Purchaser effective as of the Time of Closing;
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(h) Non-Competition and Non-Solicitation Agreements.
(i) The Vendor, Celestica Parent and Celestica International Inc.
shall have entered into a non-competition and non-solicitation
agreement with the Purchaser, C&D Power Systems (Canada) ULC,
Dynamo Power Systems (Canada) ULC and the Company in the form
attached as Schedule 6.1(h)(i) hereto;
(ii) each of Xxx Xxxxxx, Xxxx Xxxx, Xx Xxxxxx and Xxx Xx shall have
executed and delivered a non-competition and non-solicitation
agreement substantially in one of the forms attached as
Schedule 6.1(h)(ii) hereto;
(i) Canadian, Asian and Shanghai Purchase Agreements. The transactions
contemplated by the Canadian Purchase Agreement, the Asian Purchase
Agreement and the Shanghai Purchase Agreement shall have been
completed concurrently with the closing of the transactions
contemplated hereby;
(j) Agreement to Manufacture. Celestica Hong Kong Limited shall have
entered into an agreement to manufacture with Dynamo Power System
(USA) LLC and the Purchaser in the form attached as Schedule 6.1(j)
hereto;
(k) Transition Services Agreement. The Vendor shall have entered into a
transition services agreement with the Company and Dynamo Power
Systems (Canada) ULC in the form attached as Schedule 6.1(k) hereto;
(l) Employee Services Agreements. The Vendor and Celestica Parent shall
have entered into an Employee Services Agreement with the Company
and the Purchaser, and Celestica International Inc. and Celestica
Parent shall have entered into an Employee Services Agreement with
Dynamo Power Systems (Canada) ULC and the Purchaser in the forms
attached as Schedules 6.1(l)(i) and 6.1(l)(ii), respectively;
(m) Shanghai Occupancy Agreement. Omni Electronics (Shanghai) Co. Ltd.
shall have entered into an occupancy agreement with Datel Electronic
Technology (Shanghai) Co., Ltd. in the form attached as Schedule
6.1(m) hereto; and
(n) Drop-Downs. The Drop-Downs shall have occurred on the Closing Date.
If any of the conditions contained in this Section 6.1 shall not be
performed or fulfilled at or prior to the Time of Closing to the satisfaction of
the Purchaser, acting reasonably, the Purchaser may, by notice to the Vendor,
terminate this Agreement and the obligations of the Vendor and the Purchaser
under this Agreement other than the obligations contained in Section 9.1 shall
be terminated. If the Purchaser or any of its representatives or agents is
aware, on or prior to the Closing, that a representation or warranty of the
Vendor is incorrect or inaccurate or a covenant or obligation of the Vendor to
be performed on or prior to the Time of Closing is breached or not performed and
the Purchaser proceeds with the Closing, the Purchaser shall be
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deemed to have waived its rights in connection with such representation,
warranty, covenant or obligation to the extent of such incorrectness,
inaccuracy, breach or non-performance.
6.2 Conditions of Closing in Favor of the Vendor.
The purchase and sale of the Purchased Interests is subject to the
following terms and conditions for the exclusive benefit of the Vendor, to be
fulfilled or performed at or prior to the Time of Closing:
(a) Payment of Purchase Price. The Purchaser shall have paid the
Purchase Price to the Vendor in accordance with the provisions of
Section 2.2;
(b) Representations and Warranties. The representations and warranties
of the Purchaser contained in Article 4 of this Agreement shall be
true and correct in all material respects at the Time of Closing,
with the same force and effect as if such representations and
warranties were made at and as of such time, except to the extent
that such representations and warranties are made as of a specified
date, in which case such representations and warranties shall have
been true and correct in all material respects as of the specified
date, and a certificate of a senior officer of the Purchaser dated
the Closing Date to that effect shall have been delivered to the
Vendor;
(c) Covenants. All of the terms, covenants and conditions of this
Agreement to be complied with or performed by the Purchaser at or
before the Time of Closing shall have been complied with or
performed in all material respects and a certificate of a senior
officer of the Purchaser dated the Closing Date to that effect shall
have been delivered to the Vendor;
(d) Regulatory Consents. There shall have been obtained, from all
appropriate federal, provincial, municipal or other governmental or
administrative bodies, such licences, permits, consents, approvals,
certificates, registrations and authorizations as are required by
law to be obtained by the Purchaser to permit the change of
ownership of the Purchased Interests contemplated hereby including
those described in Schedule 3.1(s), in each case in form and
substance satisfactory to the Vendor, acting reasonably;
(e) No Action or Proceeding. No legal or regulatory action or proceeding
shall be pending or threatened by any person to enjoin, restrict or
prohibit the purchase and sale of the Purchased Interests
contemplated hereby;
(f) Agreement to Manufacture. The Company shall have entered into an
agreement to manufacture with Celestica Hong Kong Limited in the
form attached as Schedule 6.1(j) hereto;
(g) Canadian, Asian and Shanghai Purchase Agreements. The transactions
contemplated by the Canadian Purchase Agreement, the Asian Purchase
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Agreement and the Shanghai Purchase Agreement shall have been
completed concurrently with the closing of the transactions
contemplated hereby;
(h) Non-Competition and Non-Solicitation Agreement. The Purchaser, C&D
Power Systems (Canada) ULC, Dynamo Power Systems (Canada) ULC and
the Company shall have entered into a non-competition and
non-solicitation agreement with the Vendor, Celestica Parent and
Celestica International Inc. in the form attached as Schedule
6.1(h)(i) hereto;
(i) Shanghai Occupancy Agreement. Datel Electronic Technology (Shanghai)
Co., Ltd. shall have entered into an occupancy agreement with Omni
Electronics (Shanghai) Co. Ltd., in the form attached as Schedule
6.1(m) hereto; and
(j) Suzhou Payments. Concurrently with the closing of the transactions
contemplated hereby, Dynamo Acquisition Corp. shall have paid all
amounts due and payable by it on the Closing Date pursuant to the
Suzhou Purchase Agreement.
If any of the conditions contained in this Section 6.2 shall not be
performed or fulfilled at or prior to the Time of Closing to the satisfaction of
the Vendor, acting reasonably, the Vendor may, by notice to the Purchaser,
terminate this Agreement and the obligations of the Vendor and the Purchaser
under this Agreement other than the obligations contained in Article 9 shall be
terminated. If the Vendor or any of its representatives or agents are aware, on
or prior to the Closing, that a representation or warranty of the Purchaser is
incorrect or inaccurate or a covenant or obligation of the Purchaser to be
performed on or prior to the Time of Closing is breached or not performed and
the Vendor proceed with the Closing, the Vendor shall be deemed to have waived
its rights in connection with such representation, warranty, covenant or
obligation to the extent of such incorrectness, inaccuracy, breach or
non-performance.
ARTICLE 7
CLOSING ARRANGEMENTS
7.1 Place of Closing.
The Closing shall take place at the Time of Closing at the offices
of Davies Xxxx Xxxxxxxx & Xxxxxxxx LLP, Suite 4400, 0 Xxxxx Xxxxxxxx Xxxxx,
Xxxxxxx, Xxxxxxx X0X 0X0.
7.2 Transfer.
At the Time of Closing, upon fulfilment of all the conditions set
out in Article 6 which have not been waived in writing by the Purchaser or the
Vendor, as appropriate, the Vendor shall deliver to the Purchaser certificates
respecting all the Purchased Interests duly endorsed in blank for transfer and
will cause transfers of such shares to be duly and regularly recorded in the
name of the Purchaser, or its nominee(s), subject to all other terms and
conditions hereof being complied with, and the Purchase Price shall be paid and
satisfied in the manner provided in Section 2.2.
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7.3 Further Assurances.
Each party to this Agreement covenants and agrees that, from time to
time subsequent to the Closing Date, it will, at the request and expense of the
requesting party, execute and deliver all such documents, including, without
limitation, all such additional conveyances, transfers, consents and other
assurances and do all such other acts and things as any other party hereto,
acting reasonably, may from time to time request be executed or done in order to
better evidence or perfect or effectuate any provision of this Agreement or of
any agreement or other document executed pursuant to this Agreement or any of
the respective obligations intended to be created hereby or thereby.
ARTICLE 8
INDEMNIFICATION
8.1 Indemnification by the Vendor.
Subject to the limitations contained in Section 8.9, and without
duplication of any indemnities granted under Section 8.2 or by Celestica
International Inc. under the Canadian Purchase Agreement, by Celestica
Electronics (Shanghai) Co. Ltd. under the Shanghai Purchase Agreement, by
Celestica Suzhou Technology Ltd. under the Suzhou Purchase Agreement, or by the
Vendor, Celestica International Inc. or Celestica (Thailand) Limited, under the
Asian Purchase Agreement, the Vendor agrees to indemnify and save harmless the
Purchaser from and against all Losses suffered or incurred by the Purchaser or
any of its Affiliates (including, without limitation, the Company (as long as it
remains an Affiliate of the Purchaser) from and after the Closing) as a result
of:
(a) any breach by the Vendor of any representation or warranty of the
Vendor contained in Article 3 of this Agreement or in any agreement,
certificate or other document delivered by the Vendor pursuant
hereto (provided that the Vendor shall not be required to indemnify
or save harmless the Purchaser in respect of any breach of any such
representation or warranty unless the Purchaser shall have provided
notice to the Vendor in accordance with Section 8.4 on or prior to
the expiration of the applicable time period related to such
representation and warranty as set out in Section 3.2);
(b) any breach or non-performance by the Vendor of any covenant to be
performed by it which is contained in this Agreement or in any
agreement, certificate or other document delivered by the Vendor
pursuant hereto;
(c) any non-compliance with Environmental Laws as a result of the
conduct of the portion of the Business conducted by the Vendor at
the Leased Real Property or at any other place or places where the
portion of the Business conducted by the Vendor has been conducted
by it on or prior to the Closing Date (provided that the Vendor
shall not be required to indemnify or save harmless the Purchaser
under this Section 8.1(c) unless the Purchaser shall have provided
notice to the Vendor in accordance with Section 8.4 on or prior to
the fifth anniversary of the
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Closing Date or, to the extent that the claim under this Section
8.1(c) relates to liability under CERCLA, on or prior to the date
which is seven years and six months from the Closing Date);
(d) the Release of any Hazardous Substances (i) on or before the date of
Closing on or off-site from the Leased Real Property, or (ii) from
any other locations (including any place or places where the portion
of the Business conducted by the Vendor was formerly conducted by
it) where the Vendor (in relation to the portion of the Business it
conducts only), the Company, a transporter for the Vendor (in
relation to the portion of the Business it conducts only) or the
Company, or any other Person for whose conduct the Vendor (in
relation to the portion of the Business it conducts only) or the
Company is responsible, has caused or permitted Hazardous Substances
to come to be located, whether as a result of the Vendor (in
relation to the portion of the Business it conducts only) or the
Company arranging for the disposal or treatment of such Hazardous
Substances, or otherwise (provided that the Vendor shall not be
required to indemnify or save harmless the Purchaser under this
Section 8.1(d) unless the Purchaser shall have provided notice to
the Vendor in accordance with Section 8.4 on or prior to the fifth
anniversary of the Closing Date or, to the extent that the claim
under this Section 8.1(d) relates to liability under CERCLA, on or
prior to the date which is seven years and six months from the
Closing Date);
(e) claims relating to the design, manufacture or sale of products by
the Vendor or its Affiliates in conducting the Business prior to the
Effective Time;
(f) any Excluded Liabilities (provided that the Vendor shall not be
required to indemnify or save harmless the Purchaser under this
Section 8.1(f) unless the Purchaser shall have provided notice to
the Vendor in accordance with Section 8.4 on or prior to March 31,
2006); and
(g) claims by any of the Employees or Leave Employees relating to
entitlement to retiree medical benefits under the Celestica Employee
Welfare Benefits Plan maintained by the Vendor.
8.2 Tax Indemnification.
Without duplication of any indemnities granted by the Vendor under
Section 8.1, otherwise granted under this Section 8.2 or granted by Celestica
International Inc. under the Canadian Purchase Agreement, by Celestica
Electronics (Shanghai) Co. Ltd. under the Shanghai Purchase Agreement, by
Celestica Suzhou Technology Ltd. under the Suzhou Purchase Agreement or by the
Vendor, Celestica International Inc. or Celestica (Thailand) Limited under the
Asian Purchase Agreement, the Vendor agrees to indemnify and save harmless the
Purchaser from and against all Losses suffered or incurred by the Purchaser or
any of its Affiliates (including, without limitation, the Company (as long as it
remains an Affiliate of the Purchaser) from and after the Closing) that are
attributable to:
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(a) any Taxes of the Company (including, for greater certainty, any
withholding or similar Taxes which the Company is required to pay or
remit on behalf of another Person) arising or accruing in respect of
any period (or partial period) ending on or before the Time of
Closing other than Taxes arising in the ordinary course of the
conduct of the Business from the time at which the US Drop Down
occurs to the Time of Closing;
(b) any withholding or similar Taxes imposed on the Purchaser, the
Company or any of their respective Affiliates, that are attributable
to the Purchaser's acquisition of the Purchased Interests and the
execution of the non-competition agreement referred to in Section
6.1(h)(i);
(c) any Tax liability other than an Assumed Liability of any member of
the Celestica Group which may be imposed on the Purchaser or the
Company or any of their respective Affiliates, as a transferee or
successor, by contract, or otherwise (including any Tax liability in
respect of which any member of the Celestica Group became liable at
any time up to and including the Time of Closing as transferee or
successor, by contract or otherwise);
(d) any Taxes attributable to any non-compliance by the Vendor or
Purchaser contemplated by Section 5.7(d) or the failure to obtain
any certificates or other documents referred to in Section 5.7(k);
and
(e) any breach of any representation set out in Section 3.1(ll) or any
covenant of the Vendor or the Company with respect to Taxes set
forth in Section 5.7 or Section 9.6.
8.3 Indemnification by the Purchaser.
The Purchaser agrees to indemnify and save harmless the Vendor from
and against all Losses suffered or incurred by the Vendor or any of its
Affiliates as a result of:
(a) any breach by the Purchaser of any representation or warranty of the
Purchaser contained in Article 4 of this Agreement or of any
agreement, certificate or other document delivered by the Purchaser
pursuant hereto (provided that the Purchaser shall not be required
to indemnify or save harmless the Vendor in respect of any breach of
any such representation or warranty unless the Purchaser shall have
provided notice to the Vendor in accordance with Section 8.4 within
the applicable survival period in respect of such representation and
warranty, as set forth in Section 4.2);
(b) any breach or non-performance by the Purchaser of any covenant to be
performed by it which is contained in this Agreement or in any
agreement, certificate or other document delivered by the Purchaser
pursuant hereto;
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(c) the operation of the Business after the Effective Time, including,
without limitation, (i) all claims relating to the design,
manufacture or sale of products by the Company or its Affiliates
after the Effective Time; and (ii) all environmental liabilities
which are attributable to the period after the Effective Time;
(d) any claim by a Leave Employee for severance or termination pay and
other related payments with respect to a Leave Employee who does not
accept the Purchaser's offer of employment when made in accordance
with Section 5.10 hereof on the grounds that the terms and
conditions of the employment offered were not equivalent to the
terms and conditions of employment for such Leave Employee on the
day immediately preceding the Closing Date; and
(e) the use by the Company of the name "Celestica" or any logo,
trade-xxxx or derivative thereof after the Effective Time.
8.4 Notice of Claim.
In the event that a party (the "Indemnified Party") shall become
aware of any claim, proceeding or other matter (a "Claim") in respect of which
another party (the "Indemnifying Party") agreed to indemnify the Indemnified
Party pursuant to this Agreement, the Indemnified Party shall promptly give
written notice thereof to the Indemnifying Party. Such notice shall specify
whether the Claim arises as a result of a claim by a person against the
Indemnified Party (a "Third Party Claim") or whether the Claim does not so arise
(a "Direct Claim"), and shall also specify with reasonable particularity (to the
extent that the information is available) the factual basis for the Claim and
the amount of the Claim, if known.
If, through the fault of the Indemnified Party, the Indemnifying
Party does not receive notice of any Claim in time to contest effectively the
determination of any liability susceptible of being contested, the Indemnifying
Party shall be entitled to set off against the amount claimed by the Indemnified
Party the amount of any Losses incurred by the Indemnifying Party resulting from
the Indemnified Party's failure to give such notice on a timely basis.
8.5 Direct Claims.
With respect to any Direct Claim, following receipt of notice from
the Indemnified Party of the Claim, the Indemnifying Party shall have 60 days to
make such investigation of the Claim as is considered necessary or desirable.
For the purpose of such investigation, the Indemnified Party shall make
available to the Indemnifying Party the information relied upon by the
Indemnified Party to substantiate the Claim, together with all such other
information as the Indemnifying Party may reasonably request. If both parties
agree at or prior to the expiration of such 60-day period (or any mutually
agreed upon extension thereof) to the validity and amount of such Claim, the
Indemnifying Party shall immediately pay to the Indemnified Party the full
agreed upon amount of the Claim, failing which the matter shall be referred to
binding arbitration in such manner as the parties may agree or shall be
determined by a court of competent jurisdiction.
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8.6 Third Party Claims.
With respect to any Third Party Claim, the Indemnifying Party shall
have the right, at its expense, to participate in or assume control of the
negotiation, settlement or defence of the Claim and, in such event, the
Indemnifying Party shall reimburse the Indemnified Party for all the Indemnified
Party's out-of-pocket expenses as a result of such participation or assumption.
If the Indemnifying Party elects to assume such control, the Indemnified Party
shall have the right to participate in the negotiation, settlement or defence of
such Third Party Claim and to retain counsel to act on its behalf, provided that
the fees and disbursements of such counsel shall be paid by the Indemnified
Party unless the Indemnifying Party consents to the retention of such counsel or
unless the named parties to any action or proceeding include both the
Indemnifying Party and the Indemnified Party and the representation of both the
Indemnifying Party and the Indemnified Party by the same counsel would be
inappropriate due to the actual or potential differing interests between them
(such as the availability of different defences). If the Indemnifying Party,
having elected to assume such control, thereafter fails to defend the Third
Party Claim within a reasonable time, the Indemnified Party shall be entitled to
assume such control, and the Indemnifying Party shall be bound by the results
obtained by the Indemnified Party with respect to such Third Party Claim.
8.7 Settlement of Third Party Claims.
If the Indemnifying Party fails to assume control of the defence of
any Third Party Claim, the Indemnified Party shall have the exclusive right to
contest, settle or pay the amount claimed. Whether or not the Indemnifying Party
assumes control of the negotiation, settlement or defence of any Third Party
Claim, the Indemnifying Party shall not settle any Third Party Claim without the
written consent of the Indemnified Party, which consent shall not be
unreasonably withheld or delayed; provided, however, that the liability of the
Indemnifying Party shall be limited to the proposed settlement amount if any
such consent is not obtained for any reason.
8.8 Co-operation.
The Indemnified Party and the Indemnifying Party shall co-operate
fully with each other with respect to Third Party Claims, and shall keep each
other fully advised with respect thereto (including supplying copies of all
relevant documentation promptly as it becomes available).
8.9 Monetary Limit on Indemnification.
(a) No Claim shall be made by any Indemnified Party in respect of Losses
suffered or incurred by it pursuant to:
(i) Section 8.1(a) (other than arising from a breach or inaccuracy
of any of the representations and warranties contained in
Sections 3.1(d), 3.1(k)(i), 3.1(gg) or 3.1(ll);
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(ii) Section 8.1(b) (other than in respect of a failure by the
Vendor to comply with any of its covenants contained in
Section 5.8, or to sell the Purchased Interests to the
Purchaser as provided herein except where permitted to do so
in this Agreement);
(iii) Section 8.1(f);
(iv) Section 8.3(a); or
(v) Section 8.3(b) (other than in respect of a failure by the
Purchaser to purchase the Purchased Interests from the Vendor
as provided herein except where permitted to do so in this
Agreement),
until the aggregate of all Losses suffered or incurred by such Indemnified Party
in respect of all matters which could be the subject of Claims under the
foregoing Sections and by indemnified parties that are its Affiliates under the
comparable indemnification provisions of the Other Purchase Agreements, exceeds
$500,000, in which case the Indemnifying Party's liability to indemnify the
Indemnified Party shall commence from the first dollar of Losses in excess of
$250,000 (except for a Claim made by an Indemnified Party in respect of Losses
suffered or incurred by it pursuant to Section 8.1(f), in which case the
Indemnifying Party's liability to indemnify the Indemnified Party shall commence
from the first dollar of Losses).
(b) An Indemnifying Party shall have no liability to indemnify an
Indemnified Party for any Losses pursuant to:
(i) Section 8.1(a) (other than arising from a breach or inaccuracy
of any of the representations and warranties contained in
Sections 3.1(d), 3.1(k)(i) or 3.1(ll);
(ii) Section 8.1(b) (other than in respect of a failure by the
Vendor to comply with any of its covenants contained in
Section 5.8, or to sell the Purchased Interests to the
Purchaser as provided herein except where permitted to do so
in this Agreement);
(iii) Section 8.1(c);
(iv) Section 8.1(d);
(v) Section 8.1(e);
(vi) Section 8.1(f);
(vii) Section 8.3(a); or
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(viii) Section 8.3(b) (other than in respect of a failure by the
Purchaser to purchase the Purchased Interests from the Vendor
as provided herein except where permitted to do so in this
Agreement),
after the aggregate of all successful Claims for Losses made by such Indemnified
Party under the foregoing Sections and by it and the indemnified parties that
are its Affiliates under the comparable indemnification provisions of the Other
Purchase Agreements exceeds $10,000,000.
8.10 Exclusivity.
The provisions of this Article 8 shall apply to any Claim for breach
of any covenant, representation, warranty or other provision of this Agreement
or any agreement, certificate or other document delivered pursuant hereto (other
than a claim for specific performance or injunctive relief) with the intent that
all such Claims shall be subject to the limitations and other provisions
contained in this Article 8.
ARTICLE 9
GENERAL
9.1 Confidentiality of Information.
In the event that the transactions contemplated herein are not
consummated for any reason, the Purchaser covenants and agrees that, except as
otherwise authorized by the Vendor, neither the Purchaser nor its
representatives, agents or employees will disclose to third parties, directly or
indirectly, any confidential information or confidential data relating to the
Company or the Business discovered by the Purchaser or its representatives as a
result of the Vendor or the Company making available to the Purchaser and its
representatives the information requested by them in connection with the
transactions contemplated herein.
9.2 Notices.
(a) Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be deemed to have been duly
given upon receipt if (i) delivered in person, (ii) transmitted by
facsimile or similar means of recorded electronic communication with
receipt confirmed, or (iii) sent by registered mail or courier,
charges prepaid, addressed as follows:
(i) if to the Vendor:
Celestica Corporation
c/o Celestica Inc.
0000 Xxxxxxxx Xxxxxx Xxxx
Xxxxxxx, XX X0X 0X0
Attention: Senior Vice-President and Chief Legal Officer
Facsimile No.: 416.448.2817
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and a copy to:
Attention: Senior Vice-President, Corporate Development
Facsimile No.: 416.448.5444
(ii) if to the Purchaser:
C&D Technologies, Inc.
0000 Xxxxx Xxxxxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Vice-President, General Counsel
Facsimile No.: 000-000-0000
with a copy to:
Attention: Vice-President, Corporate Development
Facsimile No.: 000-000-0000
(b) Any party may at any time change its address for service from time
to time by giving notice to the other parties in accordance with
this Section 9.2.
9.3 Commissions, etc.
The Vendor agrees to indemnify and save harmless the Purchaser from
and against all Losses suffered or incurred by the Purchaser in respect of any
commission or other remuneration payable to any broker, agent or other
intermediary who is acknowledged by the Vendor to act or have acted for or on
behalf of the Vendor or any of its Affiliates in connection with the
transactions contemplated hereby, and the Purchaser agrees to indemnify and save
harmless the Vendor from and against all Losses suffered or incurred by the
Vendor in respect of any commission or other remuneration payable to any broker,
agent or other intermediary who is acknowledged by the Purchaser to act or have
acted for the Purchaser or any of its Affiliates in connection with the
transactions contemplated hereby.
9.4 Consultation and Public Announcements.
The Purchaser shall consult with the Vendor, and the Vendor shall
consult with the Purchaser, before issuing any press release or making any other
public announcement with respect to this Agreement or the transactions
contemplated hereby and, except as required by any applicable law or regulatory
requirement, neither the Vendor nor the Purchaser shall issue any such press
release or make any such public announcement without the prior written consent
of the Purchaser or the Vendor, as the case may be.
9.5 Disclosure.
Prior to any public announcement of the transaction contemplated
hereby pursuant to Section 9.4, no party shall disclose this Agreement or any
aspect of such transaction
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except to its board of directors and, in the case of the Vendor, to the board of
directors of its parent corporation, Celestica Inc., or any committee thereof,
and on a "need to know" basis (i) to its senior management, (ii) to its legal,
accounting, financial or other professional advisors who are assisting it in
connection with the transaction, and (iii) as may otherwise be required by any
applicable law or any regulatory authority having jurisdiction or any stock
exchange on which the shares of such party or of an Affiliate of such party are
listed.
9.6 Celestica Parent Guarantee.
(a) Celestica Parent hereby irrevocably and unconditionally guarantees to
the Purchaser, jointly and severally with the Vendor, the performance by the
Vendor of its obligations under this Agreement, including, without limitation,
the indemnification obligations of the Vendor contained in Article 8. The
Purchaser shall not be required to give any notice to, or make any demand on,
the Vendor or to proceed against the Vendor's assets prior to requiring the
performance by Celestica Parent of the obligations guaranteed under this Section
9.6. Celestica Parent agrees that its obligations under this Section 9.6 will
not be discharged except by complete performance of all obligations of the
Vendor set forth in this Agreement.
(b) Celestica Parent hereby agrees, in furtherance of the foregoing and
not in limitation of any other right which the Purchaser may have against
Celestica Parent by virtue hereof, that upon the failure of the Vendor to pay or
perform any of its obligations when and as the same shall become due hereunder,
Celestica Parent will, upon demand, pay, perform or cause to be paid or
performed all obligations then due as aforesaid.
9.7 Counterparts.
This Agreement may be executed by facsimile transmission and in any
number of counterparts, each of which shall constitute an original and all of
which taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF this Agreement has been executed by the parties.
CELESTICA CORPORATION
by /s/ Xxxxx Xxxx
--------------------------------
Name: Xxxxx Xxxx
Title: Authorized Signatory
C&D TECHNOLOGIES, INC.
by /s/ Xxxxxxx X. Xxxxxxx, Xx.
--------------------------------
Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Vice President and CFO
CELESTICA INC.
by /s/ Xxxxx Xxxx
--------------------------------
Name: Xxxxx Xxxx
Title: Senior Vice-President
Corporate Development
