Exhibit 99.3
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ASSET PURCHASE AGREEMENT
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BY AND BETWEEN
NORDX/CDT, INC.
AND
BELDEN (CANADA) INC.
AND
BELDEN COMMUNICATIONS COMPANY
TABLE OF CONTENTS
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ARTICLE I INTERPRETATION ........................................................... 1
1.1 Definitions ............................................................... 1
1.2 Other Defined Terms ....................................................... 6
1.3 Schedules and Exhibits .................................................... 7
1.4 Knowledge ................................................................. 9
ARTICLE II PURCHASE AND SALE ....................................................... 9
2.1 Purchase and Sale ......................................................... 9
2.2 Excluded Assets ........................................................... 9
2.3 Instruments of Conveyance ................................................. 10
2.4 Assignment of Contracts, etc. ............................................. 11
2.5 Transfer of Environmental Permits ......................................... 11
2.6 Assumption of Liabilities ................................................. 12
2.7 Accounts Receivable Collection; Post-Closing Amounts Received and Paid .... 13
ARTICLE III PURCHASE PRICE ......................................................... 14
3.1 Purchase Price ............................................................ 14
3.2 Draft Closing Balance Sheet ............................................... 15
3.3 Purchase Price Adjustment ................................................. 17
3.4 Payment and Satisfaction of the Purchase Price ............................ 17
3.5 Tax Elections / Allocation of Purchase Price .............................. 17
3.6 Transfer Taxes ............................................................ 18
3.7 Goods and Services Tax Election ........................................... 18
3.8 Accounts Receivable and Pre-Paid Expenses Elections ....................... 18
3.9 Inventory Resale Certificates ............................................. 18
3.10 Certain Inventory ........................................................ 18
ARTICLE IV REPRESENTATIONS AND WARRANTIES .......................................... 19
4.1 Representations and Warranties of Vendor .................................. 19
4.2 Representations and Warranties of Purchaser ............................... 28
ARTICLE V COVENANTS OF THE PARTIES ................................................. 29
5.1 Joint Covenants ........................................................... 29
ARTICLE VI COVENANTS OF VENDOR ..................................................... 29
6.1 Conduct of Business ....................................................... 29
6.2 Notification .............................................................. 30
6.3 Access .................................................................... 31
(i)
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6.4 Closing .................................................... 31
6.5 Non-Competition ............................................ 32
6.6 Confidentiality ............................................ 33
6.7 Portfolio Exception ........................................ 34
6.8 Environmental .............................................. 34
6.9 Other Matters .............................................. 34
6.10 Severance Reimbursement .................................... 35
ARTICLE VII COVENANTS OF PURCHASER .................................... 35
7.1 Closing .................................................... 35
7.2 Notification. .............................................. 36
ARTICLE VIII EMPLOYEES ................................................ 36
8.1 Employees .................................................. 36
8.2 Indemnity for Employee Claims .............................. 36
8.3 Release from Restrictive Covenants ......................... 37
8.4 No Third Party Beneficiaries ............................... 37
8.5 Access to Employees ........................................ 37
8.6 Non-Solicitation of Employees .............................. 37
8.7 Additional Understandings .................................. 38
ARTICLE IX CONDITIONS OF CLOSING ...................................... 38
9.1 Conditions for the Benefit of Purchaser .................... 38
9.2 Conditions for the Benefit of Vendor ....................... 39
9.3 Effects of Termination ..................................... 40
ARTICLE X INDEMNIFICATION ............................................. 40
10.1 Indemnification by Vendor .................................. 40
10.2 Indemnification by Purchaser ............................... 41
10.3 Obligation to Reimburse; Limitations ....................... 41
10.4 Notification ............................................... 42
10.5 Defense of Third Party Claim ............................... 42
10.6 No Compromise .............................................. 42
10.7 Failure to Defend .......................................... 43
10.8 Time Limitations ........................................... 43
10.9 Limitation on Indemnification .............................. 43
10.10 Survival of Indemnification ................................ 44
10.11 Sole Remedies .............................................. 44
ARTICLE XI CLOSING .................................................... 44
11.1 Date, Time and Place of Closing ............................ 44
(ii)
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ARTICLE XII POST-CLOSING COVENANTS ................................... 45
12.1 Books and Records ......................................... 45
12.2 Access to Employees ....................................... 45
ARTICLE XIII DISPUTES ................................................ 46
13.1 Disputes .................................................. 46
ARTICLE XIV MISCELLANEOUS ............................................ 46
14.1 Risk of Loss .............................................. 46
14.2 Announcements ............................................. 47
14.3 Further Assurances ........................................ 47
14.4 Successors in Interest .................................... 47
14.5 Joint and Several Obligations ............................. 47
14.6 Notices ................................................... 50
14.7 Expenses .................................................. 51
14.8 Counterparts .............................................. 51
14.9 Severability .............................................. 52
14.10 Governing Law ............................................. 52
14.11 Entire Agreement .......................................... 52
14.12 Inconsistency ............................................. 52
14.13 Gender .................................................... 52
14.14 Currency .................................................. 52
14.15 Headings .................................................. 52
14.16 Amendment ................................................. 52
14.17 Waiver .................................................... 53
14.18 Set Off ................................................... 53
14.19 Supply Agreement .......................................... 53
(iii)
ASSET PURCHASE AGREEMENT
AGREEMENT made the 22nd day of October, 2002,
BY AND AMONG: NORDX/CDT, INC., a corporation incorporated under the
Laws of Canada with its registered office at 0000 xxxx.
xxx Xxxxxxx, Xxxxxx-Xxxxxx, Xxxxxx, Xxxxxx, X0X 0X0,
herein acting and represented by Xxxxxxx Xxxxx,
("Vendor");
AND: XXXXXX (CANADA) INC. ("Belden Canada"), a corporation
incorporated under the Laws of Ontario with its
registered office at Xxxxx 0000, Xxxxxxxx Xxxxx Xxxx,
Xxxxxxx, Xxxxxxx X0X 0X0, herein acting and represented
by Xxxxx Xxxxxxxxxx
AND: BELDEN COMMUNICATIONS COMPANY ("Belden Communications"),
a corporation incorporated under the Laws of Delaware
with its registered office at CSC The United States
Corporation, 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxxxxxx 00000, herein acting and
represented by Xxxxx Xxxxxxxxxx,
(collectively, the "Purchaser");
THIS AGREEMENT WITNESSETH THAT, in consideration of the mutual covenants herein
contained, it is agreed by and between the Parties as follows:
ARTICLE I
INTERPRETATION
1.1 Definitions
Where used herein or in any amendments hereto or in any communication
required or permitted to be given hereunder, the following terms shall have the
following meanings, respectively, unless the context otherwise requires:
(a) "Accounts Payable" shall mean all accounts payable (excluding Employee
Payables), trade payables and other amounts owed to creditors of Vendor or
the U.S. Affiliate with respect to the Business at Closing.
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(b) "Accounts Receivable" shall mean all accounts receivable, trade accounts,
notes receivable, book debts and other debts due or accruing due to Vendor
or the U.S. Affiliate with respect to the Business at Closing.
(c) "Affiliate" shall have the meaning ascribed thereto in the Canada Business
Corporations Act.
(d) "Agreement" shall mean this Asset Purchase Agreement and all instruments
supplemental hereto or in amendment or confirmation hereof; "herein",
"hereof", "hereto", "hereunder" and similar expressions mean and refer to
this Agreement and not to any particular Article, Section or other
subdivision; "Article", "Section" or other subdivision of this Agreement
means and refers to the specified Article, Section or other subdivision of
this Agreement.
(e) "Books and Records" shall mean all books, records, files and documentation
(in whatever medium and wherever situated) of Vendor and the U.S. Affiliate
which pertain to the Business; for greater certainty, the phrase "Books and
Records" shall include, without limitation, all statements, budgets, books,
ledgers, records, financial records, accounting records, consents,
approvals, authorizations, written Contracts, Employee files, retiree
files, insurance policies, documentation, evidence or indication of
ownership of Vendor or the U.S. Affiliate in and to any Purchased Assets,
all records and correspondence which pertain to the Licenses, but shall not
include books, records, files and documentation of Vendor or the U.S.
Affiliate which pertain exclusively to (i) the Excluded Assets or
businesses of Vendor or the U.S. Affiliate (other than the Business), (ii)
any Tax returns or Tax records and files of Vendor or the U.S. Affiliate,
or (iii) any books, records, files and documents of Vendor or the U.S.
Affiliate where applicable Law prohibits their transfer. In the event any
of the Books and Records pertain to both the Business, on the one hand, and
the Excluded Assets or businesses of Vendor or the U.S. Affiliate other
than the Business, on the other hand, or if Vendor or the U.S. Affiliate is
required by Law to keep originals of any such books and records, then the
phrase "Books and Records" shall mean copies thereof with all information
not related to the Business deleted.
(f) "Business" shall mean the business of the NORCOM/CDT division of Vendor as
presently conducted from and on the Kingston Property and the Memphis
Property consisting of the manufacturing, sale and distribution of the
products currently manufactured at the facility located on the Kingston
Property. For greater certainty, the term "Business" shall exclude the
manufacturing, sale or distribution of coaxial cables manufactured at
Vendor's facility located in Pointe-Claire, Quebec and any activity or
operation not currently being conducted at the Kingston Property.
(g) "Closing" shall mean the completion of the purchase and sale of the
Purchased Assets contemplated hereunder and the payment to Vendor of the
Purchase Price required to be paid pursuant to Section 3.1.
(h) "Contracts" shall mean all contracts, agreements, indentures, instruments,
commitments and orders made by or in favour of Vendor or the U.S. Affiliate
relating primarily to the Business, other than those related to the
Excluded Assets.
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(i) "Employee Payables" shall mean all amounts payable to Employees or for the
benefit of Employees, including all accrued wages, salary, severance,
accrued vacation, termination and pay in lieu of notice obligations for
Employees as of the Closing Date arising from events occurring prior to the
Closing Date, except for (i) those extraordinary bonuses based on the sale
of the Business described at sub-part C)(i) of Schedule 4.1(w)(v), and (ii)
any liabilities or amounts payable relating to or arising under any Benefit
Plans (including any pension or post-retirement plan or arrangement of
Vendor, its Affiliates (including the U.S. Affiliate) or their predecessors
(including Nortel).
(j) "Employees" shall mean all of the unionized and non-unionized employees of
Vendor and the U.S. Affiliate employed exclusively in the Business which,
for greater certainty, shall include part-time employees and employees on
short-term disability, workers compensation, sick leave, maternity leave,
or leave of absence or laid-off employees on the Closing Date but shall
exclude (i) employees on long-term disability, (ii) employees on short-term
disability as of the Closing Date who become entitled to receive long-term
disability within twelve (12) months after the Closing Date, (iii) U.S.
employees of the Business, and (iv) anyone employed by an employer other
than the Vendor on the Closing Date. A list of Employees as of October 21,
2002 is set forth in Part A of Schedule 4.1(w)(i). The U.S. sales employees
of the Business excluded from the definition of Employees are listed in
Part B of Schedule 4.1(w)(i).
(k) "Environmental Laws" shall mean applicable Laws relating to hazardous
substances, pollution or protection of the environment, including Laws
relating to: (i) on-site or off-site contamination; (ii) chemical
substances or products; (iii) releases of any hazardous substances into the
environment; and (iv) the manufacture, processing, distribution, use,
treatment, storage, transport, packaging, labeling, sale, recycling,
disposal, destruction, incineration, burial or handling of hazardous
substances.
(l) "Environmental Permits" shall mean all permits, authorizations,
certificates, registrations and any other approvals held by Vendor pursuant
to any Environmental Laws and relating to the operation of the Business.
(m) "Equipment" shall mean (i) all machinery, spare parts, equipment
(including, without limitation, reels), support fixtures and support units
for equipment (including, without limitation, filtering systems, compound
systems, silos, air compressors and steam generators), tools, computers,
furniture, trade fixtures, furnishings and office equipment (including,
without limitation, word processing, accounting, communication and
reproduction equipment) owned or used by Vendor or the U.S. Affiliate
located in, on or about or normally located in, on or about the Kingston
Property or the Memphis Property used primarily in connection with the
Business, or any such items located anywhere else provided they have been
used primarily in connection with the Business anytime during the past six
months, and (ii) all assignable warranties of any Person covering all or
any part of such items.
(n) "Escrow Agent" shall mean the entity designated as such as set out in the
Escrow Agreement;
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(o) "Escrow Agreement" shall mean an agreement by and among the Escrow Agent,
Purchaser and Vendor substantially in the form of Exhibit H dated as of the
date hereof;
(p) "Financial Statements" shall mean the unaudited, internally prepared
balance sheet of Vendor with respect to the Business for the period ending
April 30, 2002 and the accompanying statement of income, retained earnings
and changes in financial position for the period of August 1, 2001 to April
30, 2002.
(q) "GAAP" shall mean, at any time, accounting principles generally accepted in
Canada, including those in the handbook of the Canadian Institute of
Chartered Accountants at the relevant time applied on a consistent basis.
(r) "Governmental Authority" shall mean any multinational, federal, provincial,
state, municipal, local or other governmental or public department, central
bank, court, commission, board, bureau, agency or instrumentality, domestic
or foreign, any subdivision or authority of any of the foregoing, or any
quasi-governmental or private body exercising any regulatory, expropriation
or taxing authority under or for the account of any of the above.
(s) "Holdback" shall mean the terms set forth in Exhibit "I".
(t) "Intellectual Property Rights" shall mean all patents, patent applications,
patent disclosures, together with all reissues, continuations,
continuations-in-part, revisions, extensions and reexaminations thereof and
inventions (whether or not patentable and whether or not reduced to
practice) and all improvements thereto; all registered and unregistered
statutory and common law copyrights and copyrightable works and computer
software and related documentation; all registered and unregistered
trademarks, trade names, service marks, logos and all the goodwill
associated therewith; all registrations, applications and renewals for any
of the foregoing; all license agreements and sublicense agreements to and
from third parties relating to any of the foregoing; all trade secrets,
inventions, technology, confidential information, know-how, formulae,
manufacturing and production processes and technical and computer data
related thereto; and all copies and tangible embodiments of the foregoing
(in whatever form); in each case that relate primarily to the Business.
(u) "Interim Trademark License Agreement" shall mean an agreement between the
Parties substantially in the form of Exhibit "C".
(v) "Inventory" shall mean all raw materials, work-in-progress, finished goods
and other materials and supplies and maintenance items, in each case
whether on hand, in transit, warehoused or wherever situated, of Vendor or
the U.S. Affiliate manufactured or produced by or for the Business.
(w) "Kingston Lease" shall mean a lease agreement between the Parties in
respect of the Kingston Property, substantially in the form of Exhibit "A".
(x) "Kingston Property" shall mean the land and premises more particularly
legally described in Schedule 1.1(x) and all buildings and structures
thereon or forming part
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thereof and all fixtures supporting the building thereon, such as heating,
ventilating, and air conditioning equipment, piping, conduits, lighting
fixtures and lighting equipment, cafeteria equipment, loading dock
bumpers, loading dock equipment and loading dock facilities, and floor
coverings affixed to the floor.
(y) "Laws" shall mean (i) all laws, statutes, codes, ordinances, orders,
decrees, rules, regulations and municipal by-laws, and (ii) all judgments,
orders, writs, injunctions, decisions, rulings, decrees, and awards of any
Governmental Authority, which in each of the above cases binds or affects
the Party or Person referred to in the context in which such word is used.
(z) "Licenses" shall mean all permits, licenses, certificates of compliance,
consents, approvals and authorizations of, or registrations with, any
Governmental Authority, pertaining primarily to the Business, other than
Environmental Permits.
(aa) "Lien" shall mean any mortgage, charge, pledge, hypothec, lien (statutory
or otherwise), security interest, security granted under the Bank Act
(Canada), easement, conditional sale contract, ownership or title
retention agreement and other encumbrance or right of any nature
whatsoever or however arising that in substance secures payment or
performance of an obligation.
(bb) "Memphis Property" shall mean the land and premises listed and described
in Schedule 1.1(bb) by reference to their municipal address, owned by the
U.S. Affiliate.
(cc) "Non-Transferable Licenses" shall mean those Licenses which are not, by
their terms or pursuant to Law, transferable to Purchaser; a list of such
material Licenses is set forth at Schedule 1.1(cc).
(dd) "Nortel" shall mean (i) Nortel Networks Corporation and its subsidiaries
(whether direct or indirect) and (ii) the predecessors of any of the
foregoing.
(ee) "Parties" shall mean Vendor and Purchaser; and "Party" shall mean either
one of them as the context may require.
(ff) "Patent License Agreement" shall mean an agreement between the Parties
substantially in the form of Exhibit "D".
(gg) "Pension and Benefits Agreement" shall mean an agreement between the
Parties substantially in the form of Exhibit "E".
(hh) "Permitted Liens" shall mean:
(i) minor imperfections in title, if any, not material in amount and
which, individually or in the aggregate, do not materially interfere
with or affect the conduct of the Business or the use or value of the
Purchased Assets;
(ii) unregistered Liens for xxxxxxx'x compensation assessments and similar
obligations not delinquent;
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(iii) unregistered Liens in favour of any lessor or licensor for rent or
royalties to become due or for other obligations or acts, the
performance of which is required under leases, subleases or licenses
after the Closing, so long as the payment of such rent, royalties or
the performance of such other obligation or act is not delinquent;
(iv) unregistered Liens of any Employees for salaries or wages earned but
not yet payable; and
(v) unregistered Liens of unpaid vendors of personal property in each
case arising in the ordinary course of business for charges which
are not delinquent or payable.
(ii) "Person" shall mean an individual, corporation, company, cooperative,
partnership, trust, unincorporated association, entity with juridical
personality or Governmental Authority and pronouns which refer to a Person
shall have a similarly extended meaning.
(jj) "Pre-Paid Expenses" shall mean all expenses of the Business which have
been paid for by Vendor or the U.S. Affiliate in advance of the period for
which the related goods and services have been delivered or performed.
(kk) "Reference Balance Sheet" shall mean the balance sheet of the Business at
April 30, 2002 (as adjusted by the Parties), a copy of which is attached
hereto as Schedule 1.1(kk).
(ll) "Rolling Stock" shall mean (i) all automobiles, trucks, trailers, material
handling equipment and other rolling stock owned or used by Vendor or the
U.S. Affiliate primarily in connection with the Business, and (ii) all
assignable warranties of any Person covering all or any part of the
aforesaid Rolling Stock.
(mm) [Reserved]
(nn) "Taxes" or "Tax" shall mean all taxes, including, without limitation,
taxes relating to income, withholding, real property, social service,
corporation, capital, value added, sales, franchise, excise, profits,
gross receipts, customs duties, stamp, transfer, water, business and good
and services.
(oo) "Transition Service Agreement" shall mean an agreement between the
Parties, substantially in the form of Exhibit "G".
(pp) "U.S. Affiliate" shall mean Nordx/CDT Corporation, a corporation
incorporated pursuant to the laws of Delaware.
1.2 Other Defined Terms
In addition to the defined terms in Section 1.1, each of the following
terms shall have the meaning ascribed thereto in the corresponding Sections:
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Term Section
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Accountant ................................. 3.2(e)
Adjustment Date ............................ 3.3
Assumed Liabilities ........................ 2.6
Benefit Plans .............................. 4.1(p)
Cash Purchase Price ........................ 3.1
CCRA ....................................... 3.7
Closing Date ............................... 11.1
Dispute .................................... 13.1
Draft Closing Balance Sheet ................ 3.2
Escrow Agent ............................... 1.1(n)
Excluded Assets ............................ 2.2
Retained Liabilities ....................... 2.6
Final Closing Date Balance Sheet ........... 3.2
GST ........................................ 3.7
Indemnified Party .......................... 10.3
Indemnifying Party ......................... 10.3
Interest Rate .............................. 3.3
Losses ..................................... 10.1
Material Contracts ......................... 4.1(n)
Purchase Price ............................. 3.1
Purchased Assets ........................... 2.1
Purchaser .................................. Preamble
Purchaser's Indemnified Group .............. 10.1
Purchaser's Notice ......................... 3.2(c)
Rights ..................................... 2.4
STD ........................................ 4.1(w)(viii)
Tangible Assets ............................ 4.1(j)
Third Party Claim .......................... 10.5
Time of Closing ............................ 11.1
Uncollected Receivables .................... 2.7
Vendor ..................................... Preamble
Vendor's Indemnified Group ................. 10.2
Vendor's Notice ............................ 3.2(d)
WCB ........................................ 4.1(w)(xi)
1.3 Schedules and Exhibits
The following is a list of the Schedules and Exhibits attached hereto
and incorporated herein by reference:
Sub-part C)(i), Schedule 4.1(w)(v) - Extraordinary Bonuses
Schedule 4.1(w)(i) PartA - Employees
Schedule 4.1(w)(i) Part B - U.S. employees
Schedule 4.1(w)(i) Part C - Certain U.S. Employees
Schedule 1.1(x) - Kingston Property
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Schedule 1.1(bb) - Memphis Property
Schedule 1.1(cc) - Non-Transferable Licenses
Schedule 1.1(kk) - Reference Balance Sheet
Schedule 1.4 - Knowledge
Schedule 2.2(n) - Excluded Assets
Schedule 2.6 - Product warranty, rebate and return policies
and Environmental Reports
Schedule 3.2 - Special Accounting Procedures for Inventory
Schedule 3.5 - Allocation of Purchase Price
Schedule 3.10 - Identified Cables
Schedule 4.1(d)(ii) - Consents under Contracts
Schedule 4.1(d)(iii) - Consents under Licenses
Schedule 4.1(h) - US Equipment
Schedule 4.1(k) - Location of Consignment Inventory
Schedule 4.1(l) - Intellectual Property
Schedule 4.1(m) - Outstanding Litigation
Schedule 4.1(n) - Material Contracts and No Default under
Contracts
Schedule 4.1(p) - Benefit Plans
Schedule 4.1(q) - Environmental Matters
Schedule 4.1 (r) - Compliance with Laws
Schedule 4.1(s) - Unusual Transactions
Schedule 4.1(t) - Commitments
Schedule 4.1(v) - Warranties
Schedule 4.1(w) - Employee Matters
Schedule 4.1(x) - Bonuses
Schedule 4.1(y) - Inventory
Schedule 4.1(z) - Corporate Assistance
Schedule 6.5 - Restricted Products
Schedule 8.1 - Form of Letter of Employment
Schedule 14.19 - Terms of Supply Agreement
Exhibit "A" - Form of Kingston Lease
Exhibit "B" - [Reserved]
Exhibit "C" - Form of Interim Trademark License Agreement
Exhibit "D" - Form of Patent License Agreement
Exhibit "E" - Form of Pension and Benefits Agreement
Exhibit "F" - [Reserved]
Exhibit "G" - Form of Transition Services Agreement
Exhibit "H" - Form of Escrow Agreement
Exhibit "I" - Form of Holdback
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1.4 Knowledge
Whenever any fact or matter is stated to be to the knowledge of Vendor,
or any similar reference, such reference shall mean the knowledge, after
reasonable investigation, of the Persons listed in Schedule 1.4.
ARTICLE II
PURCHASE AND SALE
2.1 Purchase and Sale
Upon and subject to the terms and conditions hereof, Vendor shall sell,
assign, convey and transfer (or cause the U.S. Affiliate to sell, assign, convey
and transfer, as the case may be) to Purchaser, and Purchaser shall purchase and
acquire from Vendor (or the U.S. Affiliate, as the case may be), at the Time of
Closing on the Closing Date and for the Purchase Price, all of the property and
assets relating primarily to the Business of every kind and description and
wheresoever situate, other than the Excluded Assets, including, without
limitation, all of Vendor's (or the U.S. Affiliate's, as the case may be) right,
title and interest in the following assets (collectively, the "Purchased
Assets"):
(a) the Books and Records;
(b) the Contracts;
(c) the Equipment;
(d) the Intellectual Property Rights, to the extent assignable pursuant to
Section 2.4;
(e) the Inventory;
(f) the Licenses (other than the Non-Transferable Licenses);
(g) the Pre-Paid Expenses;
(h) the Accounts Receivable;
(i) the Rolling Stock; and
(j) the goodwill of the Business.
2.2 Excluded Assets
The term Purchased Assets does not include the following (collectively,
the "Excluded Assets"):
(a) all cash on hand, bank balances, moneys in the possession of banks and
other depositaries, term or time deposits, guaranteed investment
certificates, treasury bills,
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other securities and other similar cash or cash-equivalent items (other
than the Pre-Paid Expenses referred to in Section 2.1 and "xxxxx cash");
(b) all insurance policies of Vendor or the U.S. Affiliate associated with the
Business and any proceeds therefrom;
(c) all Tax refunds and Tax credits receivable by Vendor or the U.S.
Affiliate, except as provided in the Final Closing Date Balance Sheet;
(d) the minute books, corporate records and Tax returns, records and files of
Vendor or the U.S. Affiliate;
(e) the names "Norcom", "Nordx", "CDT", "Cable Design Technologies" or
variations or combinations thereof and any marks or logos associated
therewith;
(f) the Environmental Permits, subject to Section 2.5 below;
(g) any Accounts Receivable from Vendor or Affiliates of Vendor;
(h) product approvals or certifications that are not used primarily in the
Business;
(i) any patents, trade marks, trade names, service marks, copyrights,
industrial designs, trade secrets, inventions, know-how, manuals,
technology, software and other intellectual property not included in the
Intellectual Property Rights;
(j) any rights, claims or causes of action of Vendor or the U.S. Affiliate
against third parties relating to the assets, properties, business or
operations of the Business arising out of or relating to transactions
occurring on or prior to the Closing Date to the extent such right, claim
or cause of action does not relate to an Assumed Liability or an Account
Receivable;
(k) all other assets, properties, interests and rights of Vendor, any
Affiliate of Vendor or the U.S. Affiliate not used or held for use
primarily or exclusively in the operation or conduct of the Business or
relating primarily or exclusively to the Business;
(l) the Kingston Property;
(m) the Memphis Property; and
(n) those assets set forth in Schedule 2.2(n).
2.3 Instruments of Conveyance
In order to effectuate more fully and completely the sale, assignment,
conveyance and transfer of the Purchased Assets pursuant to the terms and
conditions hereof, Vendor shall deliver to Purchaser, at Vendor's expense, such
bills of sale, assignments and instruments of conveyance as requested by
Purchaser, acting reasonably, to permit the assignment, transfer and conveyance
from Vendor or the U.S. Affiliate, as the case may be, to Purchaser and the
acquisition by Purchaser from Vendor or the U.S. Affiliate, as the case may be,
of all right, title
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and interest of Vendor or the U.S. Affiliate, as the case may be, in, to and
under the Purchased Assets, the whole with effect as at the Time of Closing on
the Closing Date. With respect to the Purchaser, Belden Communications Company
shall acquire all Equipment, Rolling Stock and Intellectual Property Rights;
Belden (Canada) Inc. shall acquire all other Purchased Assets. In accordance
with Section 2.6, Belden Canada will assume the Assumed Liabilities.
2.4 Assignment of Contracts, etc.
Prior to the Closing, Vendor shall use commercially reasonable efforts to
obtain all required third party consents necessary for the sale, assignment,
transfer and conveyance by Vendor to Purchaser of any Contracts (other than
Benefit Plans), Licenses (other than Non-Transferable Licenses) and Intellectual
Property Rights (collectively, the "Rights"). Other than for the Rights listed
on Schedule 1.1(cc), to Vendor's knowledge, all Rights necessary for the
operation of the Business will be transferred at Closing. Purchaser shall
cooperate reasonably with Vendor in obtaining such consents including, without
limitation, possible written assumptions thereof by Purchaser, provided such
assumptions are consistent with Section 2.6.
Vendor shall use reasonable commercial efforts to provide or cause to be
provided to the Purchaser the benefits of any Rights which have not been
assigned or transferred as at Closing and (x) the Vendor shall promptly pay the
Purchaser when received all monies received by the Vendor or its Affiliates with
respect to any such Right and (y) the Purchaser shall (to the extent it receives
the benefits of such Right) perform and discharge on behalf of the Vendor all of
the Vendor's obligations with respect to such Right that arise after the Closing
and do not arise from Vendor's or the U.S. Affiliate's default, violation of
Law, tort, infringement, or breach of warranty.
Purchaser shall use commercially reasonable efforts to obtain the
re-issuance of Non-Transferable Licenses required by Purchaser to continue the
conduct of the Business with the Purchased Assets. Vendor shall reasonably
co-operate with Purchaser in its efforts to procure the re-issuance of any such
Non-Transferable Licenses.
Subject to the provisions of this Article II, Purchaser acknowledges and
agrees that Vendor has no obligation to cause existing suppliers and service
providers to the Business to continue the existing relationship or to provide
Purchaser the terms and conditions provided to Vendor. Purchaser shall be
responsible for the negotiation of its own terms and conditions with such
suppliers and service providers.
2.5 Transfer of Environmental Permits
The transfer, issuance or re-issuance, as the case may be, of any
Environmental Permits related to the Business will be the sole responsibility of
Purchaser. Vendor shall cooperate reasonably in the process of such transfers,
issuances or re-issuances, as the case may be, of Environmental Permits to
Purchaser. The transfer, issuance and re-issuance fees incurred in connection
with the transfer, issuance or re-issuance, as the case may be, of the
Environmental Permits, shall be shared equally by the Parties.
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2.6 Assumption of Liabilities
Subject to the completion of the transaction of sale, assignment, transfer
and purchase contemplated hereunder, but with effect from the Closing Date,
Purchaser hereby agrees to assume, discharge, satisfy, perform and fulfill in a
timely manner, strictly in accordance with their terms, all of the following
liabilities and obligations of Vendor and the U.S. Affiliate in connection with
the Business (collectively, the "Assumed Liabilities"):
(a) the Accounts Payable (other than Accounts Payable to Vendor or any
Affiliate of Vendor) to the extent accrued on the Final Closing Date
Balance Sheet and the liabilities set forth on the Final Closing Date
Balance Sheet under the heading "other liabilities" to the extent accrued
thereon;
(b) all obligations which will accrue after the Closing under the Contracts,
Environmental Permits and Licenses assigned or transferred to Purchaser in
accordance with the terms hereof, other than liabilities that relate to or
result from a default, breach of warranty, violation of law, tort or
infringement by Vendor or the U.S. Affiliate, or their predecessors;
(c) all liabilities and obligations arising from sales of the products
manufactured by Vendor or the U.S. Affiliate (whether such sales occurred
prior to or after the Closing Date) in the ordinary course of business
relating to, and to the extent of, the following: (i) product warranty
claims in accordance with Vendor's warranty policy described on Schedule
2.6, excluding any liability for personal injury, property damage, or
consequential damages, (ii) products returns pursuant to any stock
balancing program in accordance with Vendor's product returns policy
described on Schedule 2.6, and (iii) rebates pursuant to any marketing or
promotion program in accordance with Vendor's rebate policy described on
Schedule 2.6; and
(d) the Employee Payables to the extent set out in the Final Closing Date
Balance Sheet.
Purchaser does not hereby assume nor agree to assume any liabilities or
obligations of Vendor, the U.S. Affiliate or otherwise whatsoever other than the
Assumed Liabilities as set forth above including, without limitation, the
following liabilities and obligations ("Retained Liabilities"):
(i) all liabilities or obligations for Taxes accrued or incurred by
Vendor or its Affiliates or relating to any period before the
Closing in respect of the Purchased Assets or the Business, except
to the extent of any accrual for Taxes on the Final Closing Balance
Sheet;
(ii) all liabilities or obligations of Vendor or its Affiliates for debt
for borrowed money;
(iii) all liabilities or obligations relating to or arising out of the
Excluded Assets;
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(iv) all liabilities or obligations of Vendor or its Affiliates
relating to the execution, delivery and consummation of this
Agreement and the transactions contemplated hereby;
(v) all liabilities or obligations of Vendor or any Affiliate for
property damage or personal injury to the extent arising out of
or relating to any period prior to Closing;
(vi) all liabilities or obligations of Vendor or any Affiliate
relating to or arising out of the infringement of the
Intellectual Property Rights of any Person by Vendor or its
Affiliates;
(vii) except to the extent included in the Assumed Liabilities
pursuant to Section 2.6(d), all liabilities or obligations
relating to or arising from or in connection with Employees
relating to the period on or prior to the Closing (however,
liabilities and obligations regarding the Benefit Plans are
governed by sub-part (viii) below);
(viii) all liabilities or obligations arising or accruing on, before
or after Closing relating to or arising under any Benefit Plans
(including pension, retirement and post-retirement plans); and
(ix) all liabilities or obligations arising, accruing or relating to
any occurrence on or before Closing under: any Environmental
Law; the Nortel Environmental Access Agreement; or in respect
of former employees or retirees; and all other liabilities or
obligations arising, accruing or relating to any occurrence on
or before the Closing of Vendor, its Affiliates, or their
predecessors or otherwise relating to the Business not assumed
by the Purchaser under this Agreement as an Assumed Liability.
For clarity, the Parties acknowledge and agree that (i) any
matter described in the environmental reports listed in the
"Environmental Report" Section on Schedule 2.6 shall not constitute an
Assumed Liability but shall be a Retained Liability and (ii) should
Vendor assert that the Purchaser is responsible for a violation of a
Environmental Law in connection with and during the term of its lease of
the Kingston Property pursuant to the Kingston Lease, the Vendor shall
have the burden of proving that neither the alleged violation of an
Environmental Law, nor the condition that gave rise the alleged
violation, occurred or existed on or before the Closing.
2.7 Accounts Receivable Collection; Post-Closing Amounts Received and Paid
For a period of ninety (90) days after the Closing Date, Vendor shall
use commercially reasonable efforts to collect all Accounts Receivable, provided
that Vendor shall have no obligation to institute suit or retain a collection
agency to collect any Accounts Receivable and further provided that Vendor shall
not compromise any Accounts Receivable without the Purchaser's prior consent;
provided that in the event of Accounts Receivable that include
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obligations owed with respect to the Business and to Vendor's or the U.S.
Affiliate's businesses other than the Business, Vendor shall continue to use
commercially reasonable efforts to collect such Accounts Receivable in
accordance with the provisions of this Section 2.7 following such ninety (90)
day period.
Payments on Accounts Receivable received from a debtor following the
Closing Date shall be imputed firstly to the oldest Accounts Receivable from
such debtor and then to the next oldest uncollected Accounts Receivable from
such debtor, unless a debtor has made known a dispute related to such Accounts
Receivable or otherwise specified in writing an application of such payments.
All cash collected on or after the Closing Date from Accounts
Receivable relating to the Business as conducted prior to or after the Closing
Date (other than in relation to the Excluded Assets) shall belong to, and if
received by Vendor, shall be received for the benefit and the account of,
Purchaser and Vendor shall, on a weekly basis, transfer and remit to Purchaser
all such amounts received by or paid to Vendor on or after the Closing Date. All
Accounts Payable and amounts paid relating to the Business as conducted prior to
the Closing Date that constitute an Assumed Liability or a liability of
Purchaser relating to periods on or after the Closing Date, paid by Vendor in
error on or after the Closing Date, shall be for the account of Purchaser and
Purchaser shall, on a weekly basis, reimburse Vendor for any such amounts paid
by Vendor.
Purchaser may, at any time between six (6) and seven (7) months after
Closing, notify in writing Vendor of its intention to assign to Vendor all or
part of the Accounts Receivable which remained uncollected as at the end of the
six (6) month period following Closing, except for such Accounts Receivable
which remain uncollected as a result of a dispute between the debtor thereof and
the Purchaser ("Uncollected Receivables"). Vendor shall purchase the Uncollected
Receivables from Purchaser, for the face value thereof, within five (5) days of
receipt of Purchaser's notice hereunder, to the extent that such Uncollected
Receivables remain uncollected as at the time of purchase by Vendor. All moneys
collected on account of Uncollected Receivables after the date of purchase of
the Uncollected Receivables by Vendor shall belong to, and if received by
Purchaser shall be received for the benefit and the account of, Vendor and
Purchaser shall transfer and remit to Vendor, on a weekly basis, all moneys so
received by Purchaser.
ARTICLE III
PURCHASE PRICE
3.1 Purchase Price
The aggregate purchase price payable by Purchaser to Vendor for the
Purchased Assets shall be an amount equal to the aggregate of (i) the amount of
Eighteen Million Three Hundred Thousand U.S. Dollars (U.S. $18,300,000) less
Seven Million U.S. Dollars (U.S. $7,000,000), which is the estimated reduction
in net assets from the date of the Reference Balance Sheet through the Closing
Date (the "Estimated Net Asset Adjustment"), totaling an amount of Eleven
Million Three Hundred Thousand U.S. Dollars (U.S. $11,300,000) (collectively,
the "Closing Cash Purchase Price"); (ii) the Holdback Amount as set out in the
Holdback; and (iii) the amount of the Assumed Liabilities assumed in accordance
with Section 2.6, the whole as adjusted pursuant
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to Section 3.3 (collectively, the "Purchase Price"). In accordance with the
preceding sentence, Belden Canada will pay the Closing Cash Purchase Price and
Belden Communications will pay the Holdback Amount. Promptly following the
execution of this Agreement by the Parties, the Purchaser shall transfer the
Closing Cash Purchase Price to the Escrow Agent pursuant to the Escrow
Agreement; the Closing Cash Purchase Price will be disbursed in accordance with
the Escrow Agreement.
3.2 Draft Closing Balance Sheet
(a) Within 60 days after the Closing Date, Vendor shall prepare and deliver
to Purchaser a draft consolidated balance sheet (the "Draft Closing
Balance Sheet") for the Business as of the close of business on the
Closing Date. The Draft Closing Balance Sheet shall be prepared in
accordance with Vendor's normal accounting principles, practices and
procedures which were used in preparing the Reference Balance Sheet,
subject to the provisions of paragraph (b) of this Section 3.2.
Purchaser shall cause the applicable Employees to cooperate with Vendor
in connection with the preparation of the Draft Closing Balance Sheet
and will make the Books and Records available as necessary.
(b) Notwithstanding anything to the contrary in this Section 3.2, the
following specific accounting rules shall be applied in the preparation
of the Draft Closing Balance Sheet and the Final Closing Balance Sheet:
(i) all line items relating to (i) debt for borrowed money, (ii)
Excluded Assets, or (iii) Retained Liabilities shall be
eliminated;
(ii) the amount of Inventories of the Business shall be based on a
review of Vendor's books and records and a physical count of all
Inventories to be taken at or near the close of business on the
Closing Date in accordance with the procedures set forth in
Schedule 3.2. Any shrinkage measured in dollars will reduce (and
any increase will increase) the amount of Inventory set forth on
the Draft Closing Balance Sheet and Final Closing Date Balance
Sheet;
(iii) the reserve for slow moving, excess or obsolete Inventory on the
Draft Closing Balance Sheet and the Final Closing Date Balance
Sheet shall be determined using the procedures set forth in
Schedule 3.2;
(iv) all intracompany and intercompany transactions will be eliminated;
(v) there shall be no adjustments or reserves for doubtful Accounts
Receivables;
(vi) the amount of "capitalized variances" (which does not include
copper variances) shall not exceed the total of such items in the
Reference Balance Sheet; and
(vii) the parties acknowledge that no fixed asset register exists for
the Business and, as a result, no specific review of fixed assets
will be conducted; instead, fixed assets will be based on those
reflected in the Reference Balance Sheet, adjusted only for new or
disposed of assets (consistent with Vendor's prior practices) for
purposes
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of adjusting the Reference Balance Sheet to the Final Closing
Date Balance Sheet, and no effect shall be given to changes in
depreciation.
(c) Purchaser will have sixty (60) days following receipt of the Draft
Closing Balance Sheet from Vendor to dispute any matter in the Draft
Closing Balance Sheet. If Purchaser believes adjustments are necessary
to the Draft Closing Balance Sheet, Purchaser shall notify Vendor in
writing of its proposed adjustments, including the amount, nature and
basis for such adjustments ("Purchaser's Notice"). If no Purchaser's
Notice is given within the said sixty (60) day period, the Draft Closing
Balance Sheet as prepared by Vendor shall be final and binding on the
Parties.
(d) Vendor shall have twenty (20) days following receipt of Purchaser's
Notice to review the proposed adjustments to the Draft Closing Balance
Sheet. Within such twenty (20) day period, Vendor shall notify in
writing Purchaser of Vendor's position with respect to each of
Purchaser's proposed adjustments ("Vendor's Notice"). If no Vendors'
Notice is given within the twenty (20) day period, the Draft Closing
Balance Sheet prepared by Vendor as adjusted by Purchaser's Notice shall
be final and binding on the Parties.
(e) The Parties shall in good faith attempt to amicably resolve any dispute
as to any matter which remain unresolved as to the Draft Closing Balance
Sheet; if within thirty (30) days following the date of delivery of
Vendor's Notice, the Parties cannot resolve their differences, Purchaser
and Vendor shall jointly engage the Toronto office of
PricewaterhouseCoopers, if such party declines the engagement, the
Toronto office of such other accounting firm or office as the parties
mutually agree (the "Accountant") to resolve any such differences. The
Accountant shall be furnished with copies of the Draft Closing Balance
Sheet, Vendor's Notice and Purchaser's Notice and any other explanatory
materials any Party may wish to provide (as long as a Party delivers a
copy of any such materials to the other Party concurrently with their
delivery to the Accountant). The Accountant's review shall be limited to
those accounting issues in dispute as set forth in the Purchaser's
Notice and Vendor's Notice.
(f) Within forty-five (45) days from the date of its engagement, the
Accountant shall furnish the Parties with its written determination
regarding each unresolved adjustment of the Draft Closing Balance Sheet
submitted to the Accountant.
(g) At the request of any Party, the Accountant may, at any time during the
said forty-five (45) day review period, conduct in Xxxxxxx, Xxxxxxx, a
hearing to afford the Parties an opportunity to explain their respective
position on the disputed items. The Accountant, in reaching a decision,
shall provide a written explanation of its conclusions to each Party,
and its determination shall be conclusive and binding on each Party. The
Parties agree to submit to the jurisdiction of any court of competent
subject matter jurisdiction for the enforcement of such award or
decision. The fees and expenses of the Accountant shall be borne equally
by Vendor and Purchaser.
(h) Each Party will grant the other Party and the Accountant reasonable
access to the records of the Business and any work papers, including
auditor work papers, prepared with respect to the Draft Closing Balance
Sheet for the purposes of this Section 3.2.
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The "Final Closing Date Balance Sheet" shall mean the Draft Closing Balance
Sheet once final and binding on the Parties pursuant to the provisions of this
Section 3.2.
3.3 Purchase Price Adjustment
The Purchase Price will be adjusted as follows:
(i) If the net book value of the Business on the Final Closing Date
Balance Sheet (as adjusted to reflect the Estimated Net Asset
Adjustment) exceeds the net book value of the Business on the
Reference Balance Sheet, Purchaser will pay to Vendor an amount
equal to such excess (plus interest thereon at the rate of the
Thirteen-Week U.S. Treasury Xxxx Rate per annum ("Interest Rate")
from the Closing Date) by wire transfer or delivery of other
immediately available funds within three (3) business days after
the date ("Adjustment Date") on which the Final Closing Date
Balance Sheet becomes final and binding on the Parties.
(ii) If the net book value of the Business on the Final Closing Date
Balance Sheet (as adjusted to reflect the Estimated Net Asset
Adjustment) is less than the net book value of the Business on the
Reference Balance Sheet, Vendor shall pay to Purchaser an amount
equal to such deficiency (plus interest thereon at the Interest
Rate from the Closing Date) by wire transfer or delivery of other
immediately available funds within three (3) business days after
the Adjustment Date.
3.4 Payment and Satisfaction of the Purchase Price
On Closing, Purchaser shall assume the Assumed Liabilities and shall
direct the Escrow Agent to pay the amount of the Closing Cash Purchase Price by
way of wire transfer of immediately available funds to an account designated in
writing by Vendor not less than five (5) days prior to Closing.
3.5 Tax Elections / Allocation of Purchase Price
The Parties shall agree to allocate the Purchase Price among the
Purchased Assets as set forth in Schedule 3.5. The allocation of the Purchase
Price shall be final and binding upon the Parties for all purposes, including,
without limitation, the filing of all Tax or other returns and the preparation
of all financial statements and other documents and records.
The Parties shall make jointly the necessary elections and execute and
file, within the prescribed delays, the prescribed election forms and any other
documents required to give effect to the foregoing and shall also prepare and
file all of their respective Tax returns in a manner consistent with such
elections.
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3.6 Transfer Taxes
Purchaser shall be liable and shall pay all registration fees, license
fees or other like charges (other than sales Taxes) properly payable upon and in
connection with the sale, assignment, conveyance and transfer of the Purchased
Assets from Vendor to Purchaser hereunder; Purchaser shall be liable for, and
shall remit to Vendor for remittance to the appropriate Governmental Authority,
all sales Taxes properly payable upon and in connection with such sale,
assignment, conveyance and transfer.
3.7 Goods and Services Tax Election
Vendor and Purchaser shall jointly execute an election under Section 167
of the Excise Tax Act (Canada) in the form prescribed for such purposes in order
to minimize (or eliminate) any Goods and Services Tax ("GST"). Purchaser will
file the election form referred to above with the Canada Customs and Revenue
Agency ("CCRA") within the delay prescribed by the Excise Tax Act (Canada).
Notwithstanding such election, in the event it is determined by CCRA
that there is a liability of Purchaser to pay, or of Vendor to collect and
remit, the GST on all or part of the Purchased Assets, such GST shall be
forthwith paid by Purchaser to CCRA, or to Vendor, as the case may be, and
Purchaser shall indemnify and save Vendor harmless with respect to any such GST,
as well as any interest and penalties relating thereto. The obligation of
indemnification set forth in this Section 3.7 shall survive the completion of
the transactions contemplated in this Agreement and, notwithstanding any other
provision of this Agreement, shall be of unlimited duration.
3.8 Accounts Receivable and Pre-Paid Expenses Elections
Purchaser and Vendor agree to elect jointly in the prescribed form under
Sections 22 and 20(24)of the Income Tax Act (Canada) respectively as to the sale
of the Accounts Receivable and of the Pre-Paid Expenses and to designate in such
elections an amount equal to the portion of the Purchase Price allocated to
Accounts Receivable and to Pre-Paid Expenses pursuant to Section 3.5.
3.9 Inventory Resale Certificates
At Closing, Purchaser shall execute and deliver to Vendor purchase
exemption certificates for all Inventory sold to the Purchaser pursuant to the
terms of this Agreement.
3.10 Certain Inventory
Schedule 3.10 lists certain Inventory that constitutes part of the
Purchased Assets ("Identified Cables"). If Purchaser sells any of the Identified
Cables within one year after the Closing Date, Purchaser will pay Vendor 75% of
the lesser of (i) the Adjusted Standard Value of the item (as noted in Schedule
3.10) or (ii) the sales price Purchaser receives for the item. If Purchaser
sells any Identified Cables during the second year after the Closing Date,
Purchaser will pay Vendor 40% of the lesser of (i) the Adjusted Standard Value
of the item or (ii) the sales price Purchaser received for the item. Purchaser
will use reasonable commercial efforts to sell
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such inventory in the ordinary course of business. Purchaser will have no
obligation to Vendor for any sale or other disposition of any Identified Cables
that occurs two years after the Closing Date. Vendor will reimburse Purchaser
the transportation cost Purchaser incurs in moving any of the Identified Cable
to another facility used by Purchaser or its Affiliates during the two-year
period after the Closing; provided that Vendor may decline to pay for such
shipping, in which case Purchaser will either (i) scrap such Inventory with
Purchaser keeping the scrap proceeds (in such event this Section 3.10 shall end)
or (ii) pay for such shipping itself (in such event this Section 3.10 shall
continue until two years after the Closing Date). However, if sub-part (ii) of
the preceding sentence applies, any amounts payable to Vendor in the first or
second years shall be reduced by the transportation costs Purchaser incurs in
moving the Identified Cables. Purchaser will provide Vendor with fifteen (15)
days prior notice of its intent to move any Identified Cables and the cost of
such move.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Vendor
Vendor represents and warrants to Purchaser as follows as of the date
of this Agreement and as of the Closing Date and acknowledges that Purchaser is
relying upon such representations and warranties in connection with the purchase
by Purchaser of the Purchased Assets and that Purchaser would not have entered
into this Agreement without such representations and warranties:
(a) Due Incorporation. Each of the Vendor and the U. S. Affiliate:
(i) is duly amalgamated, existing and in good standing under the Laws
of Canada and Delaware, respectively; and
(ii) has all necessary corporate power and authority to own, lease and
operate the Purchased Assets and to conduct the Business as and
in the places where such Purchased Assets are now owned, leased
or operated or such Business is now conducted.
(b) Due Authorization. The Vendor has the necessary corporate power and
authority to execute this Agreement and to perform its obligations
hereunder. The execution of this Agreement by the Vendor and its
performance of its obligations hereunder have been duly authorized by
all necessary action on its part. Such execution and performance by
Vendor does not require any action or consent of, any registration
with, or notification to, any Person, or any action or consent under
any Laws to which Vendor or the U.S. Affiliate is subject, other than
consents under Contracts as set forth in Schedule 4.1(d)(ii) and
consents required to be obtained from Governmental Authorities for the
transfer or reissuance of the Licenses (other than Non-Transferable
Licenses) to Purchaser as set forth in Schedule 4.1(d)(iii). Because
the U.S. Affiliate is not a signatory to this Agreement, Vendor shall
cause the U.S. Affiliate to take all necessary action in order to
complete and perform all of the transactions contemplated by this
Agreement (or any ancillary agreement referred to in this Agreement).
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(c) Enforceability. This Agreement will constitute upon execution a legal,
valid and binding obligation of Vendor enforceable against it in
accordance with its terms subject to applicable bankruptcy, insolvency,
reorganization and similar Laws affecting the enforcement of creditors
rights generally and the discretion that a court may exercise in the
granting of equitable remedies such as specific performance and
injunction.
(d) No Conflict. The execution of this Agreement, the consummation of the
transactions contemplated herein and the performance by the Vendor of
its obligations hereunder do not:
(i) violate, contravene or breach, or constitute a default under,
the constating instruments or by-laws of Vendor and U.S.
Affiliate;
(ii) except as disclosed in Schedule 4.1(d)(ii) with respect to the
consummation of the transactions contemplated by this Agreement,
result in the breach or violation of, or conflict with, or allow
any other Person to exercise any rights under, any Contracts;
(iii) except as disclosed in Schedule 4.1(d)(iii) with respect to the
consummation of the transactions contemplated by this Agreement,
result in a breach of, or cause the termination or revocation
of, any License (other than Non-Transferable Licenses);
(iv) result in, or require the creation of any Lien upon any of the
Purchased Assets or the Business; or
(v) violate, contravene or breach any Laws.
(e) No Options. There is no agreement (other than this Agreement) which
grants to any Person the right to purchase or otherwise acquire any
Purchased Assets.
(f) Books and Records. The Books and Records have been maintained in
accordance with sound business practices and fairly and accurately
present in all material respects (i) the financial position of the
Business, and (ii) all transactions of the Business, for the periods
therein indicated.
(g) Financial Statements. The Financial Statements are management extracts
prepared in good faith based on Vendor's financial Books and Records
which Books and Records have been prepared in accordance with GAAP
consistently applied and fairly present in all material respects the
net assets of the Business at the date specified and the revenues,
expenses and direct costs for the Business for the periods specified,
provided that accruals for certain pension and post-retirement
obligations referenced in the Towers Xxxxxx reports dated July 8, 2002
(copies of which have been submitted to Purchaser) are not reflected in
the Financial Statements.
(h) Title to Property. Vendor and the U.S. Affiliate are together the owner
of, and shall at Closing transfer to Purchaser good and valid title to,
all of the Purchased Assets free and
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clear of any and all Liens other than Permitted Liens. Schedule 4.1(h)
is a list of the Equipment included in the Purchased Assets owned by
the US Affiliate.
(i) Accounts Receivable. All Accounts Receivable are actual and bona fide
accounts receivable of Vendor or the U.S. Affiliate resulting from the
ordinary conduct of the Business. No representation or warranty is
given by Vendor hereunder as to the collectibility of the Accounts
Receivable, subject to the agreement of the Parties relating generally
to Accounts Receivable set forth at Section 2.7.
(j) Condition of Assets. All of the Inventory, Equipment and Rolling Stock
(the "Tangible Assets") is being sold on an "as is - where is" basis.
Purchaser acknowledges and agrees that there is no representation,
warranty or condition, whether contractual or legal, either express or
implied by Vendor or construed by Purchaser, as to the condition or
quality of such Tangible Assets (other than the representation given at
Section 4.1(h) and other than in respect of the Inventory which is,
subject to reserves as set forth in the Reference Balance Sheet and on
the Final Closing Balance Sheet, good and saleable in the ordinary
course of business, provided that this representation and warranty
shall only relate to quantity not to demand for the Inventory or market
conditions). It is understood that the Purchaser shall have no claim
for any breach of the preceding sentence with respect to inventory to
the extent that the Purchaser's claim was addressed by any adjustment
of inventory in connection with preparing the Final Closing Date
Balance Sheet pursuant to Article 2. The Tangible Assets, material to
the Business, are in working condition, subject to ordinary wear and
tear.
The Purchased Assets include all assets that are used or held
for use by Vendor or the U.S. Affiliate primarily in the
operation or conduct of the Business, and are sufficient for
the continuing manufacturing operations of the Business
immediately following the Closing in substantially the same
manner as currently conducted as and from the Kingston
Property and the Memphis Property. In the event this Section
is breached because Vendor has in good faith failed to
identify and transfer any assets or properties, such breach
shall be deemed cured if Vendor promptly transfers such
properties or assets (or substantially equivalent property or
assets) to Purchaser at no additional cost to Purchaser.
During the past twelve (12) months, neither Vendor nor U.S.
Affiliate has transferred any material assets out of the
Kingston Property or Memphis Property other than those
transfers and sales of Inventory and sales of obsolete or
surplus Equipment to third parties in the ordinary course.
(k) Location; Place of Business. Vendor and the U.S. Affiliate do not hold,
directly or indirectly, any of the Purchased Assets anywhere other than
at the Kingston Property and the Memphis Property, except for Inventory
in transit, Inventory on consignment with third parties and Rolling
Stock used in the transportation of Inventory in transit. Schedule
4.1(k) lists the locations of any Inventory on consignment.
(l) Intellectual Property Rights. Schedule 4.1(l) sets forth a list of all
pending patent applications and registered patents, trademark
registrations and applications and copyright registrations and
applications forming part of the Purchased Assets. Schedule 4.1(l) sets
forth all intellectual property license agreements, nondisclosure
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agreements and other written agreements with respect to any
Intellectual Property Rights forming part of the Purchased Assets,
entered into by Vendor or its Affiliates which are material to the
operations of the Business. Except as set forth in Schedule 4.1(l), to
the knowledge of Vendor, Vendor is not, in connection with the
Business, operating under any obligation to pay royalties under any
license for intellectual property or technical information agreement
relating to the Business nor is Vendor committed to enter into any such
obligation. Except as set forth in Schedule 4.1(l), neither Vendor nor
any of its Affiliates have licensed any Intellectual Property Rights of
the Business to any third party other than trademark licenses entered
into in the ordinary course in connection with ordinary marketing
activity; such licenses will automatically terminate should the Vendor
cease selling to such customers and upon the customer exhausting the
inventory of Vendor's products. Except as set forth in Schedule 4.1(l),
to the knowledge of the Vendor, none of the products manufactured or
sold by the Business or any of the processes used in the Business,
infringes or misappropriates the intellectual property rights of any
Person. Except as set forth on Schedule 4.1(l), no action, suit or
claim by any third party contesting the validity, enforceability,
ownership or use of any Intellectual Property Rights of the Business
has been made in the past three (3) years, is currently outstanding or,
to knowledge of the Vendor, has been threatened in writing.
(m) Litigation. Except as disclosed in Schedule 4.1(m), there are (i) no
actions, claims, investigations, arbitrations and other proceedings
pending, or to the knowledge of Vendor, threatened against, with
respect to, or affecting in any manner, Vendor or any of its Affiliates
in connection with the Business or the Purchased Assets and which, if
found against Vendor or any of its Affiliates, would have or could
reasonably be expected to have a material adverse effect on Vendor, the
Business, its results or financial condition, (including its
relationship with Xxxx Canada) or the Purchased Assets (a "Material
Adverse Effect"); (ii) no outstanding judgments, orders decrees, writs,
injunctions, decisions, rulings or awards against, with respect to, or
in any manner affecting the Business or any of the Purchased Assets
which would have or could reasonably be expected to have a Material
Adverse Effect.
(n) Material Contracts. Schedule 4.1(n) sets forth (a) all contracts and
other agreements of the Business to which the Vendor is a party, the
performance of which (i) involve obligations of the Vendor in excess of
U.S. $25,000 (excluding current ordinary course purchase orders) or
(ii) involve obligations of the Vendor in any one year in excess of
U.S. $100,000 or (iii) involve purchase orders in respect of which the
customer has paid a deposit or made a pre-payment (other than those
reflected on the Final Closing Balance Sheet) and (b) a list of
outstanding purchase orders and sales orders committing the Business
for a term in excess of three (3) months (collectively, the "Material
Contracts"). Except as set forth in Schedule 4.1(n), to the knowledge
of the Vendor, (a) no third party is in breach of any Material Contract
or has repudiated any provision of any Material Contract and (b) no
event, condition or occurrence has occurred which with notice, lapse of
time or both would constitute a breach or default or permit
termination, modification or acceleration of any Material Contract,
except where any such breach, default, modification, termination or
acceleration would not have (or could not reasonably be expected to
have), individually or in the aggregate, a Material Adverse Effect.
Except as
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set forth in Schedule 4.1(n), the Vendor has not received any written
notice of any cancellation or intention to cancel or not to renew or
extend any Material Contract with (a) any customer which individually
or together with other customers related to it, accounted for more than
five percent (5%) of the aggregate gross sales of the Business for the
fiscal year ending on July 31, 2001 or (b) any supplier which accounted
for more than five percent (5%) of the aggregate supplies or equipment
purchased for the Business for the fiscal year ending July 31, 2002.
(o) Licenses. To its knowledge, Vendor has, and is in full compliance with
and entitled to all of the benefits under, all Licenses (other than
Non-Transferable Licenses) other than Licenses providing for license
fees not exceeding U.S. $10,000 individually or U.S. $50,000 in the
aggregate in any one year. Vendor has not received written notice of
any event, inquiry, investigation or proceeding threatening the
validity of any such Licenses (other than the Non-Transferable
Licenses).
To the knowledge of Vendor, no fact, condition or circumstance has
occurred to create, and the execution of this Agreement and its
performance shall not create, any right to terminate, cancel, modify,
amend, revoke or expire any License (other than the Non-Transferable
Licenses), except that Vendor will seek from the appropriate
Governmental Authorities consents to transfer or reissue the Licenses
(other than the Non-Transferable Licenses) to Purchaser in accordance
with Section2.4.
(p) Benefit Plans. Except as set forth in Schedule 4.1(p), Vendor, in
connection with the Business, is not a party to any pension,
retirement, post-retirement, bonus, profit sharing, incentive, stock
purchase, stock option, stock appreciation, severance,
change-of-control, savings, thrift, insurance, medical,
hospitalization, disability, death or other similar plan, program, or
practice providing director, officer or employee benefits (all of such
plans, programs or practices of Vendor, whether or not so scheduled,
collectively being the "Benefit Plans"). Vendor has made available to
Purchaser full, true and complete copies of each Benefit Plan.
With respect to each Benefit Plan, the Vendor has, to its knowledge,
complied in all material respect with all applicable Laws governing
such Benefit Plans and each Benefit Plan has at all times been properly
administered in all material respects in accordance with its terms.
Except as set forth in Schedule 4.1(p), there are no material defaults
or violations by Vendor in connection with the Business of any
obligation required to be performed by it in connection with any
Benefit Plan. There are no actions, claims, investigations, lawsuits,
arbitrations or other proceedings which are pending or, to the
knowledge of Vendor, threatened with respect to the Benefit Plans
(other than routine claims for benefits or in respect of Benefit Plans
administered by a union or other entity unrelated to Vendor not
exceeding in the aggregate CDN $75,000) against Vendor in connection
with the Business, the funding agent or the fund of such Benefit Plan.
(q) Environmental Matters. Except as set forth in Schedule 4.1(q), to the
knowledge of Vendor, Vendor and the U.S Affiliate have at all times
conducted, and are continuing to conduct, the Business in material
compliance with all Environmental Laws, and the conduct thereof is not
in material violation of any Environmental Laws. Except as set forth in
Schedule 4.1(q), to the knowledge of Vendor, Vendor and the U.S
Affiliate have
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obtained all material Environmental Permits which are required under
Environmental Laws for the conduct of the Business and the Business has
been operated in material compliance with all such Environmental
Permits; all such Environmental Permits are valid, in full force and
effect.
Except as disclosed at Schedule 4.1(q), to the knowledge of
Vendor, for a period of three (3) years prior to the date
hereof, no material written notice, citation, summons or order
has been issued, no material written complaint has been filed,
no material written penalty has been assessed and no material
environmental investigation or review has been commenced by
any Governmental Authority with respect to (i) any alleged
material violation pursuant to any Environmental Laws in the
conduct of the Business; or (ii) any material alleged failure
to have any applicable Environmental Permits required under
any Environmental Laws in connection with the conduct of the
Business; or (iii) any material alleged violation to comply
with any Environmental Permits
(r) Compliance with Laws. The Vendor has complied with all Laws applicable
to the Business or the Purchased Assets, except where the failure to so
comply would not have (and could not reasonably be expected to have) a
Material Adverse Effect. Except as set forth in Schedule 4.1(r), Vendor
holds all permits and licenses from government entities which are
necessary to operate the Business as presently conducted.
(s) No Unusual Transactions. Except as set forth in Schedule 4.1(s), since
April 30, 2002, Vendor and the U.S. Affiliate have conducted the
Business in the ordinary course on a basis consistent with past
practice and, without limiting the generality of the foregoing, have
not:
(i) ceased to operate the properties of the Business and to carry on
the Business as heretofore carried on nor has Vendor or the U.S
Affiliate in connection with the Business failed to maintain all
of its properties, rights and assets consistently with past
practices;
(ii) made any material change in the rate or form of compensation or
remuneration payable or to become payable to any of the
Employees, other than in the ordinary course of the Business
consistent with past practices;
(iii) granted to any customer of the Business any special allowance or
discount, or materially changed its pricing, credit or payment
policies, except changes to remain competitive with pricing or
terms of competitors of the Business;
(iv) suffered any loss, destruction or damage of the Purchased Assets
in excess of $75,000, individually or in the aggregate, in
connection with the Business whether or not covered by
insurance;
(v) suffered any material cessation or interruption of services in
connection with the Business;
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(vi) materially modified or changed the business organization of the
Business or its relationship with its suppliers, customers and
others having business relations with it in connection with the
Business;
(vii) authorized, agreed or otherwise committed to any of the
foregoing;
(viii) has not sold, leased, transferred or otherwise disposed of any
properties or assets relating to the Business other than for
fair consideration in the ordinary course of business consistent
with past practice;
(ix) has not made any loan to, or entered into any other transaction
with, any of its Employees;
(x) has not, in connection with the Business, entered into any
collective bargaining agreement, written or oral, or modified
the terms of any existing such agreement, nor has it adopted,
amended, or terminated any Benefit Plan; or
(xi) has not delayed the payment of Accounts Payable for more than 15
days from the due date, other than those being disputed in good
faith.
(t) Commitments. Except as set forth in Schedule 4.1(t), the Vendor does not
have in connection with the Business any outstanding purchase
commitment, any payment obligation for capital expenditures or any lease
commitment in excess of CDN $20,000, individually or in the aggregate.
(u) Insurance. The Purchased Assets are adequately insured under umbrella
insurance policies of Affiliates of Vendor, which policies are in full
force and effect.
(v) Product Warranty. Schedule 4.1(v) sets forth all warranty claims made in
respect to all products sold by the Business during the two (2) years
preceding the Closing Date which had a remedy other than the replacement
of immaterial amounts of wire or cable products.
(w) Employee Relations.
(i) Schedule 4.1(w)(i) is an accurate and complete list of Employees
in the Business as of October 21, 2002, setting forth: (a) the
position and salary/rate of pay currently paid to each Employee;
(b) the payroll location of each Employee; (c) in respect of
union Employees, the bargaining unit and seniority date; and in
respect of non-union Employees, the service date; and (d) where
applicable, in respect of union Employees, whether the Employee
is on a recall list.
(ii) Schedule 4.1(w)(ii) is a complete and accurate list of all
collective bargaining agreements to which the Vendor is a party
in connection with the Business.
(iii) Except as set forth in Schedule 4.1(w)(iii), there has not been
for a period of eighteen (18) months prior to the date hereof,
nor is there existent or threatened any strike, slowdown,
picketing, work stoppage or labour dispute (including
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applications for certification, voluntary recognition or
proceedings before a labour relations tribunal) in connection
with the Business.
(iv) Except as set forth in Schedule 4.1(w)(iv), Vendor has, to its
knowledge, complied in all material respects with all collective
bargaining agreements relating to the Business. Apart from the
grievances listed in Schedule 4.1(w)(iv)(1) attached hereto, the
Vendor has not received written notice of any grievances having
been filed under such collective bargaining agreements during
the past eighteen (18) months.
(v) Except as set forth in Schedule 4.1(w)(v), Vendor has, to its
knowledge, complied in all material respects with its contracts
of employment with non-union Employees. Except as set forth in
Schedule 4.1(w)(v), the Vendor has not received written notice
of any claim relating to employment matters made by any
non-union Employee. Except as set forth in sub-part C)(2)
Schedule 4.1(w)(v), there are no Employees who are entitled to a
specified notice of termination or fixed term of employment or
who cannot be dismissed upon such notice as is required by Law
subject to severance described in sub-part C)(2) of Schedule
4.1(w)(v).
(vi) Except as set forth in Schedule 4.1(w)(vi), to its knowledge,
Vendor is, in connection with the Business, in compliance in all
material respects with all labour and employment Laws.
(vii) Except as set forth in Schedule 4.1(w)(vii), Vendor has not been
given a written resignation by any non-unionized Employee in the
period of six (6) months prior to the date hereof.
(viii) Schedule 4.1(w)(viii) lists all Employees currently in receipt
of (i) long-term disability ("LTD") benefits; and (ii)
short-term disability ("STD") benefits; and (iii) workers'
compensation benefits.
(ix) Except as set forth in Schedule 4.1(w)(ix), attached hereto,
there are no Employees currently on pregnancy or parental leave,
or any other leave of absence.
(x) Except as set forth in Schedule 4.1(w)(x), to the knowledge of
the Vendor, there are no changes contemplated by Vendor in
Employees' wages, benefits or other remuneration, save and
except for changes, commitments and agreements that may from
time to time be made in the ordinary course of business, or as
made by Vendor pursuant to the collective bargaining agreements
set out in Schedule 4.1(w)(ii).
(xi) Except as set forth in Schedule 4.1(w)(xi)(i) there are no
outstanding assessments, penalties, fines, levies, charges,
surcharges or other amounts due or owing to the Workers'
Compensation Board of Ontario ("WCB"),in respect of the Business
or the Employees; (ii) Vendor has no knowledge of any audit of
the Business currently being performed by the WCB and (iii)
there are no workers'
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compensation appeals pending before the WCB or any similar body
involving the Business and any Employee.
(xii) Except as set forth in Schedule 4.1(w)(iii), Schedule
4.1(w)(iv), Schedule 4.1(w)(v) or Schedule 4.1(w)(xii), there
are no outstanding written complaints, actions, suits, claims,
governmental investigations or other legal administrative
proceedings by or with respect to the Employees of the Business
nor is Vendor aware of any written expression of intent by any
Employee, collective bargaining agent or governmental agency to
bring any such complaint, action, suit or claim.
(x) Vendors Policies: Bonuses. Schedule 4.1(x) lists the bonuses and cash
incentives (other than immaterial performance bonuses, i.e., less than
$500 individually or $10,000 in the aggregate) paid to Employees during
the past two (2) fiscal years of the Business. All material written
documents setting forth Vendor's policies concerning severance,
termination and employee benefits in connection with the Business have
been delivered or made available to Purchaser; or where such policies
are not in writing, a written summary of such policies is set forth on
Schedule 4.1(x) part B.
(y) Inventory. Except as set forth on Schedule 4.1(y), the inventory of the
Business as at April 30, 2002 was, and the inventory of the Business on
the date hereof has been, and on the Closing Date will have been,
manufactured or acquired in the ordinary course of business. Such
inventory has been valued on the balance sheet included in the Financial
Statements and on the Reference Balance Sheet on a basis consistent with
the prior twelve (12) months (with the only adjustment for carrying
value for copper price movements).
(z) Corporate Assistance. Schedule 4.1(z) describes all of the material
services and support currently provided by Vendor to the Business.
(aa) Resident. Vendor is not a non-resident of Canada for the purposes of the
Income Tax Act (Canada).
(bb) Sales Tax Registrations. Vendor is a registrant within the meaning of
Part IX of the Excise Tax Act (Canada) and its registration number is as
follows:
Federal - 890760457
(cc) No Broker. Other than UBS Warburg LLC, none of Vendor or any of its
directors, officers, employees or agents has employed or incurred any
liability to any broker, finder or agent for any brokerage fees,
finder's fees, commissions or other amounts with respect to this
Agreement or any of the transactions contemplated hereby.
(dd) Tax Matters. Except as set forth on Schedule 4.1(z), Vendor has complied
in all material respects with all Tax Laws with respect to the Business.
Vendor is registered for purposes of the GST/PST Legislation and
represents that the Purchased Assets form a business that it carried on
prior to the Closing.
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(ee) No Other Representation. The representations and warranties of Vendor
contained in this Section 4.1 and in any certificate or other document
delivered or given in connection with the Closing pursuant to this
Agreement are the only representations and warranties made by Vendor or
any of its Affiliates in connection with the transactions contemplated
herein and, for greater certainty and without limiting the generality of
the foregoing, no other representation, warranty or condition, whether
contractual or legal, either express or implied by Vendor or any of its
Affiliates, officers, directors, employees, agents, brokers, investment
bankers or other representatives or advisors or construed by Purchaser,
is made in connection with, arising out of or relating to the
transactions contemplated by this Agreement or the due diligence
investigations of Purchaser in connection therewith. The representations
and warranties set forth herein are limited solely to the operations of
the Business at the Kingston Property and Memphis Property as currently
conducted.
4.2 Representations and Warranties of Purchaser
Purchaser represents and warrants to Vendor as follows as of the date
of this Agreement and as of the Closing and acknowledges that Vendor is relying
upon such representations and warranties in connection with the sale by Vendor
of the Purchased Assets and that Vendor would not have entered into this
Agreement without such representations and warranties:
(a) Due Incorporation. Purchaser is duly incorporated, validly existing and
in good standing under the Laws of its jurisdiction of incorporation and
has the necessary corporate power to own or lease its properties and to
carry on its business as such business is presently conducted.
(b) Due Authorization. Purchaser has the necessary corporate power and
authority to execute this Agreement and to perform its obligations
hereunder. The execution of this Agreement by Purchaser and the
performance by Purchaser of its obligations hereunder have been duly
authorized by all necessary corporate action on its part. Such execution
and performance by Purchaser do not require any action or consent of,
any registration with, or notification to, any Person, or any action or
consent under any Laws to which Purchaser is subject.
(c) Enforceability. This Agreement constitutes a legal, valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance
with its terms, subject to applicable bankruptcy, insolvency,
reorganization, arrangement and similar Laws affecting the enforcement
of creditors rights generally and the discretion that a court may
exercise in the granting of equitable remedies such as specific
performance and injunction.
(d) No Conflict. The execution of this Agreement, the consummation of the
transactions contemplated herein, the performance by Purchaser of its
obligations hereunder and the compliance by Purchaser with this
Agreement do not violate, contravene or breach, or constitute a default
under, the constating instruments or by-laws of Purchaser, or any
contracts or instruments to which Purchaser is a party.
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(e) Sales Tax Registrations. Xxxxxx Canada is a registrant within the
meaning of Part IX of the Excise Tax Act (Canada) and its registration
number is as follows:
Federal - 891301988RT0001
(f) No Broker. Neither Purchaser nor any of its shareholders, directors,
officers, employees or agents has employed or incurred any liability to
any broker, finder or agent for any brokerage fees, finder's fees,
commissions or other amounts with respect to this Agreement or any of
the transactions contemplated hereby.
(g) Sufficient Funds. Purchaser has sufficient funds available to pay the
Closing Cash Purchase Price and the Holdback Amounts and any expenses
incurred by Purchaser in connection with the transactions contemplated
by this Agreement and the borrowing or use of such funds for the
purposes contemplated by this Agreement are not subject to any
restriction or consent from any Person.
ARTICLE V
COVENANTS OF THE PARTIES
5.1 Joint Covenants
(a) General. Each of the Parties will take such further action (including
the execution and delivery of such further instruments and documents) as
any other Party reasonably may request to give full effect to the
provisions of this Agreement, all at the sole cost and expense of the
requesting Party (unless the requesting Party is entitled to
indemnification therefore under Article X below).
(b) Litigation Support. In the event and for so long as any Party is
actively contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim or demand in connection
with (i) transactions contemplated by this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event incident, action, failure to act, or transaction
involving the Business in respect of any period on or prior to the
Closing Date, in each case other than to the extent the Parties are
adverse, the other Party shall cooperate with it and its counsel in the
defense or contest, make available its personnel, and provide such
testimony and access to its books and records as shall be necessary in
connection with such defense or contest, all at the sole cost and
expense of the contesting or defending Party (unless the contesting or
defending Party is entitled to indemnification therefor under Article
X).
ARTICLE VI
COVENANTS OF VENDOR
6.1 Conduct of Business
Vendor shall, and shall cause the U.S. Affiliate to, in connection with
the Business from the date hereof up to the Closing Date, conduct its business
in the ordinary course and in a
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manner consistent with past practices and, without limiting the generality of
the foregoing, neither Vendor nor the U.S. Affiliate shall, without the prior
written consent of Purchaser:
(a) cease to carry on the Business as heretofore carried on or fail to
maintain all of the properties, rights and assets of the Business
consistently with past practices, or fail to do any and all things
reasonably necessary and within its power to retain and preserve the
goodwill of the Business;
(b) sell or otherwise in any way alienate or dispose of any material assets
in connection with the Business, other than for fair consideration in
the ordinary course of the Business;
(c) make any material change in the rate or form of compensation or
remuneration payable to or to become payable to any of the Employees or
in the Benefit Plans, or make or terminate any Benefit Plan, other than
in the ordinary course of the Business consistent with past practice; or
make any transfer of employees to or from the Business;
(d) grant to any customer of the Business, or offer to any prospective
customer of the Business, any special allowance or discount, or
materially change its pricing, credit or payment policies in connection
with the Business, other than in the ordinary course of business
consistent with past practice and except for changes to remain
competitive with pricing or terms of competitors of the Business;
(e) materially modify or change the business organization of the Business or
its relationship with its suppliers, customers and others having
business relations with it in connection with the Business; and
(f) authorize, agree or otherwise commit to any of the foregoing.
In addition, and without limiting the generality of the
foregoing, from the date hereof up to the Closing Date, Vendor
shall, and shall cause the U.S. Affiliate to, in connection with
the Business:
(g) comply with all Laws and duly and punctually file all reports and
returns required to be filed by it pursuant to any Laws or Benefit
Plans;
(h) maintain in full force and effect insurance policies on all of the
properties of the Business providing coverage and amounts of coverage
comparable to the coverage and amounts of coverage provided under its
insurance policies in effect on the date hereof; and
(i) maintain and keep its properties and the Equipment and Rolling Stock in
substantially the same condition and working order that they are in as
at the date hereof, except for ordinary wear and tear.
6.2 Notification
From the date hereof up to the Closing Date, Vendor will promptly
notify Purchaser in writing if Vendor becomes aware of any fact or condition
that causes or constitutes a breach of any of Vendor's representations and
warranties as of the date of this Agreement. During the
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same period, Vendor will promptly notify Purchaser in writing of the occurrence
of any breach of any covenant of Vendor in this Article VI or of the occurrence
of any event that may make the satisfaction of the conditions in Article IX
impossible. From the date hereof up to the Closing, Vendor shall consult with
Purchaser from time to time on material business matters and obtain Purchaser's
consent before undertaking any matter, or entering into any commitment, outside
the ordinary course of business consistent with past practice.
Vendor shall have the right to deliver to Purchaser, at least three (3)
business days prior to the Closing Date (or if the event giving rise to such
disclosure occurs thereafter as promptly as practical after the event and prior
to Closing), updated Schedules to the representations and warranties set forth
in Section 4.1, to reflect any matters which have occurred after the date of
this Agreement, which, if existing on the date of this Agreement, would have
resulted in a disclosure with regard to such representation and warranty. Such
updated Schedules shall state that they are being delivered pursuant to this
Section 6.2. If any such matter (other than with respect to the parts of Section
4 noted below), individually or together with other matters included in such
updated Schedules (other than with respect to the parts of Section 4 noted
below) has or could reasonably be expected to have a Material Adverse Effect,
the Purchaser may terminate this Agreement by written notice to the Vendor prior
to the Closing:
the last sentence of the first paragraph of Section 4.1(j); the last
sentence of Section 4.1(n); Section 4.1(v); Section 4.1(w)(iii); the
last sentence of Section 4.1(w)(iv); Section 4.1(w)(vii); Section
4.1(w)(viii); Section 4.1(w)(ix); Section 4.1(w)(xi) and Section
4.1(w)(xii).
6.3 Access
Vendor shall give to Purchaser and its officers, employees,
accountants, counsel and other representatives reasonable access during Vendor's
normal business hours throughout the period prior to the Closing to Xxxx Xxxxx
and his managers of the Business with respect to Sales and Marketing, Finance
and IT, Human Resources, and Operations and to Vendor's properties, books,
contracts, commitments, reports of examination and records (excluding
confidential portions of personnel and medical records) directly relating to the
Business or the Purchased Assets (but excluding the Excluded Assets and subject
to any limitations that are reasonably required to preserve any applicable
attorney-client privilege or third party confidentiality obligations). Vendor
shall use commercially reasonable efforts to assist Purchaser in making such
investigation and shall cause its counsel, accountants, consultants and other
non-employee representatives to be reasonably available to Purchaser for such
purposes; it being understood that Purchaser shall reimburse Vendor promptly for
all reasonable and necessary out-of-pocket costs and expenses incurred by Vendor
in complying with any such request by or on behalf of Purchaser.
6.4 Closing
If each condition set forth at Section 9.2 is (i) performed or complied
with, or (ii) waived by Vendor and if the Agreement is not terminated in
accordance with Section 9.1, Vendor shall on the Closing Date at the place of
Closing:
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(a) take all actions required to permit the Purchased Assets to be duly and
validly transferred to, and registered in the name of, Purchaser;
(b) execute and deliver to Purchaser a certificate to the effect that each
of Vendor's representations and warranties in this Agreement is true
and correct in all material respects (or with respect to any
representation or warranty that is qualified by "material" or "Material
Adverse Effect", is true and correct in all respects) as of the Closing
Date as if made on the Closing Date and that Vendor has complied with
each of its covenants in this Agreement. The representations and
warranties of Vendor made as of the Closing Date in Vendor's
certificate shall be deemed made as of the Closing Date with the same
effect as the representations and warranties made by Vendor herein;
(c) deliver to Purchaser certified copies of resolutions of the board of
directors of Vendor and the U.S. Affiliate (in form and substance
satisfactory to Purchaser's legal counsel, acting reasonably)
authorizing and approving the sale, assignment and transfer of the
Purchased Assets from Vendor and the U.S. Affiliate to Purchaser;
(d) execute and deliver to Purchaser the Kingston Lease in the form of
Exhibit "A";
(e) [Reserved];
(f) execute and deliver to Purchaser the Interim Trademark License
Agreement substantially in the form of Exhibit "C";
(g) execute and deliver to Purchaser the Patent License Agreement
substantially in the form of Exhibit "D";
(h) execute and deliver to Purchaser the Pension and Benefits Agreement in
the form of Exhibit "E"; and
(i) [Reserved];
(j) execute and deliver to Purchaser the Transition Services Agreement in
the form of Exhibit "G".
6.5 Non-Competition
From the Closing Date and for a period of four (4) years thereafter,
Vendor shall not (nor shall Vendor cause or permit any of its Affiliates to), on
its own behalf or on behalf of or in connection with any Person, directly or
indirectly, in any capacity whatsoever, by and through any Person or otherwise,
manufacture or sell any of the products listed in Part I of Schedule 6.5
("Outside Plant Products") in the United States or Canada, subject to the
exceptions set forth in such Schedule.
From the Closing Date and for a period of two years and six month
thereafter, Vendor shall not (nor shall Vendor cause or permit any of its
Affiliates to), on its own behalf or on behalf of or in connection with any
Person, directly or indirectly, in any capacity whatsoever, by and through any
Person or otherwise, manufacture or sell any of the products listed in Part II
of
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Schedule 6.5 ("Central Office Products") in Canada, subject to the exceptions
set forth in such Schedule.
Nothing in this Section shall prevent Vendor from acquiring, directly
or indirectly, shares in or the assets of any company the ownership of which
violates the provisions of the preceding two paragraphs of this Section 6.5
("Competing Business"), if the Vendor shall cease to carry on or have such
interest in the Competing Business or the company carrying on the same within
six months from completion of the relevant acquisition. But the Vendor shall not
be obligated to cease to carry on the Competing Business or to dispose of such
business or such interest within six months as so provided if such Competing
Business or interest therein is acquired by the Vendor as part of a larger
acquisition and the value properly attributable to the Competing Business did
not at the date of acquisition amount to more than 15% of the value of such
larger acquisition taken as a whole. Vendor shall give Purchaser the opportunity
to acquire any Competing Business before offering to sell such business to
another party or parties.
6.6 Confidentiality
Vendor and its Affiliates will treat and hold as such all confidential
information relating to the Business, refrain from using any of such
confidential information except in connection with this Agreement and deliver
promptly to the Purchaser or destroy, at the request of the Purchaser, all
tangible embodiments (and all copies) of such confidential information which are
in its possession. As used in the preceding sentence, "confidential information
relating to the Business" shall mean know-how, trade secrets, customer and
supplier lists, marketing plans and strategies, designs, pricing and cost
information, drawings, technical information and other proprietary information
relating exclusively to the Business but shall not include information that (i)
is publicly known (other than as a result of Vendor's disclosure in violation of
this Agreement), or (ii) is disclosed to Vendor by a third party that is not
under any duty of confidentiality to Purchaser. In the event any Vendor is
requested or required (by oral question or request for information or documents
in any legal proceeding, interrogatory, subpoena, civil investigative demand or
similar process) to disclose any confidential information, the Vendor will
notify the Purchaser promptly of such request or requirement so that the
Purchaser may seek an appropriate protective order or waive compliance with the
provisions of this provision. If, in the absence of a protective order or the
receipt of a waiver under this provision, the Vendor is, on the advice of
counsel, compelled to disclose any confidential information to any tribunal or
else stand liable for contempt, the Vendor may disclose the confidential
information to the tribunal. However, the Vendor shall use its reasonable
efforts to obtain, at reasonable request and expense of the Purchaser, an order
or other assurance that confidential treatment will be accorded to such portion
of the confidential information required to be disclosed as the Purchaser shall
designate. The parties acknowledge that Affiliates of the Vendor manufacture and
sell products of the type other than as described on Schedule 6.5 and that the
provisions of this Section 6.6 shall not limit or restrict the Vendor's
Affiliates' ability to use any information that it may have in connection with
any future manufacture or sale of such products.
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6.7 Portfolio Exception
Vendor shall not be in default under Section 6.5 by virtue of its
holding as passive investor only of not more than five percent (5%) (including
shares held by any Persons acting jointly or in concert with Vendor) of the
issued and outstanding shares of a corporation, the shares of which are listed
on a recognized stock exchange.
6.8 Environmental
Vendor will furnish written evidence reasonably satisfactory to
Purchaser of its filing (a) a NPRI (national Pollutant Release Inventory) for
2001; (b) a 127/01 air emission report; and (c) waste audits and work plans
(also referred to as a "3R" report). Vendor agrees to use its best efforts to
complete such matters within sixty (60) days following the Closing. Vendor will
provide Purchaser with any environmental reports or data that result from
environmental studies either Vendor or Nortel conduct during the period
Purchaser is operating at the Kingston Property. Purchaser shall keep such
information confidential.
6.9 Other Matters
Purchaser shall promptly reimburse Vendor for the severance cost Vendor
incurs in terminating any of the U.S. sales employees identified on Part C of
Schedule 4.1(w)(i) provided that Purchaser's obligation shall not extend to any
severance costs in excess of Vendor's policy for U.S. employees as set out below
(which policy Vendor shall follow in connection with any such terminations):
Annual Salary Severance
------------- ---------
. Less or equal to $40,000 1 week per full year of service
. Greater than $40,000 but 2 weeks per full year of service
Less than $120,000
. Greater than $120,000 3 weeks per full year of service
. Maximum Severance: 26 weeks
. Minimum Severance: 4 Weeks
. Pay unused vacation entitlement
. Maintain medical coverage during severance period at full cost
. Allow use of leased vehicle if assigned
Neither Vendor nor its Affiliates will use the XXXXXX xxxx or any confusingly
similar xxxx without Purchaser's consent. But Purchaser acknowledges that Vendor
will continue to use the "NOR" prefix with other names and Vendor will have the
right to sell its existing supply of coaxial cable, bearing the XXXXXX xxxx.
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6.10 Severance Reimbursement
Upon demand, and provided Purchaser furnishes to Vendor reasonable
information evidencing such payments, Vendor will reimburse Purchaser the cost
of severance Purchaser pays to (i) any Employee who, as of the Closing, is on
short-term disability and (ii) any employee of the Business, who was on
long-term disability as of the Closing and who by operation of law or the
Collective Agreements, returns to work with the Business after the Closing.
ARTICLE VII
COVENANTS OF PURCHASER
7.1 Closing
If each condition set forth at Section 9.1 is (i) performed or complied
with, or (ii) waived by Purchaser, and if this Agreement is not terminated in
accordance with Section 9.2, then Purchaser shall on the Closing Date:
(a) execute and deliver to Vendor a certificate to the effect that each of
Purchaser's representations and warranties in this Agreement is true
and correct in all respects (or with respect to any representation or
warranty that is qualified by "material" or "Material Adverse Effect",
is true and correct in all respects) as of the Closing Date as if made
on the Closing Date and that Purchaser has complied with each of its
covenants in this Agreement. The representations and warranties of
Purchaser made as of the Closing Date in Purchaser's certificate shall
be deemed made as of the Closing Date with the same effect as the
representations and warranties made by Purchaser herein;
(b) execute and deliver to Vendor an assumption agreement in form
reasonably satisfactory to the Parties evidencing the assumption by
Purchaser of the Assumed Liabilities;
(c) execute and deliver to Vendor the Kingston Lease in the form of Exhibit
"A";
(d) [Reserved]
(e) execute and deliver to Vendor the Interim Trademark License Agreement
substantially in the form of Exhibit "C";
(f) execute and deliver to Vendor the Patent License Agreement
substantially in the form of Exhibit "D";
(g) execute and deliver to Vendor the Pension and Benefits Agreement in the
form of Exhibit "E"; and
(h) [Reserved]
(i) execute and deliver to Vendor the Transition Services Agreement
substantially in the form of Exhibit "G".
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7.2 Notification.
From the date hereof up to the Closing Date, Purchaser will promptly
notify Vendor in writing if Purchaser becomes aware of any fact or condition
that causes or constitutes a breach of any of Purchaser's representations and
warranties as of the date of this Agreement. During the same period, Purchaser
will promptly notify Vendor in writing of the occurrence of any breach of any
covenant of Purchaser in this Article VII or of the occurrence of any event that
may make the satisfaction of the conditions in Article IX impossible.
ARTICLE VIII
EMPLOYEES
8.1 Employees
Purchaser shall offer employment, commencing immediately following
Closing, to the Employees who are not bound by either of the collective
bargaining agreements set forth in Schedule 4.1(x)(ii) (the "Collective
Agreements") on the terms and conditions provided for in the form of the offer
letter attached as Schedule 8.1.
At Closing, Purchaser will assume the Collective Agreements with
respect to the obligations thereunder of the Company (as defined in the
Collective Agreements). The Vendor shall remain solely responsible for the
obligations of the Company under the Collective Agreements with respect to any
matter occurring prior to or on Closing and shall indemnify and hold Purchaser
harmless in respect of such matters.
Purchaser shall be solely responsible for the obligations of the
Business under the Collective Agreements with respect to any matter occurring
after the Closing and shall indemnify and hold Vendor harmless in respect of
such matters, except for those matters to the extent that Vendor has indemnified
Purchaser against, or Vendor has assumed or retained responsibility for, in this
Agreement or any other agreements executed in connection herewith.
8.2 Indemnity for Employee Claims
Except for Employee Payables to the extent set out in the Final Closing
Date Balance Sheet, Vendor shall remain solely responsible and shall indemnify
and hold Purchaser harmless against any claim by an Employee relating to or
arising out of the employment of the Employee by Vendor or the U.S. Affiliate
prior to or on Closing including, without limitation any claim for salary,
wages, overtime, vacation pay, pension, retirement, post-retirement, or other
benefits (whether under the Benefit Plans or otherwise). However, Purchaser
(subject to Section 6.10) shall be responsible for severance costs of Employees
who are employed by Purchaser and who are terminated after the Closing to the
extent the severance benefits required by Law or contract do not exceed the
severance guidelines as disclosed in Schedule 4.1(p), with any excess to be paid
by the Vendor. For purposes of severance, the Purchaser will recognize any
Employee's prior service with Vendor or Nortel. The indemnity procedures of
Article X shall apply to the indemnity provisions of this Section 8.2 and
Section 8.1.
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Vendor shall remain solely responsible and shall indemnify and hold
Purchaser harmless against any claims by an Employee who does not accept
employment with Purchaser either on the terms and conditions provided for in the
offer letter attached as Schedule 8.1 or on other terms and conditions
acceptable to Purchaser (which are no less favorable to the Employee than those
set forth on Schedule 8.1).
8.3 Release from Restrictive Covenants
Vendor hereby releases as of the Closing Date all Employees who accept
employment with Purchaser from any covenants in favour of Vendor or the U.S.
Affiliate which would limit each such Employee's services to Purchaser. To the
extent permitted by Law and by contract, Vendor and the U.S. Affiliate will be
deemed to have assigned to Purchaser at Closing the benefit of such
non-competition and non-solicitation covenants. For greater certainty, nothing
herein shall be interpreted as releasing Employees from non-disclosure,
confidentiality or secrecy covenants related to aspects of Vendor's business
(and that of its Affiliates) other than the Business.
8.4 No Third Party Beneficiaries
Subject to Section 8.3, this Agreement and any agreement entered into
pursuant to this Agreement shall not be for the benefit of, or create any right
or cause of action in or on behalf of, any Person (including, without
limitation, any of the Employees) other than the Parties or the parties to such
other agreements, and no Person (including, without limitation, any of the
Employees), other than the Parties or the parties to such other agreements,
shall be entitled to rely on the provisions hereof or of any agreement entered
into pursuant hereto in any action, proceeding, hearing or other forum.
8.5 Access to Employees
Pursuant to Section 6.3, from the date hereof until the Closing Date,
Purchaser, its employees, agents or other representatives, agree to initiate any
contact with any Employees through the Vendor.
8.6 Non-Solicitation of Employees
Vendor and its Affiliates shall not, for a period of twelve (12) months
from the Closing Date, directly or indirectly, in any capacity whatsoever,
employ, offer employment to or solicit the employment or engagement of, or
otherwise entice away from the employment of Purchaser or its Affiliates, any
Employees who accept employment with Purchaser, whether or not such individual
would commit any breach of his contract or terms of employment by reason of his
leaving the employ of Purchaser.
Vendor and its Affiliates shall not be in default under this Section
8.6 by virtue only of (i) recruitment through any advertisement or an employment
agency provided the foregoing is not targeted specifically at such Employees who
accept employment with Purchaser; or (ii) hiring an Employee whose employment
with Purchaser, Purchaser's Affiliates or its successor is terminated by
Purchaser, such Affiliate or its successor after the Closing and who is not then
currently receiving severance from the previous employer (it is understood that
where
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an Employee receives a lump-sum distribution of severance, this prohibition
would apply for the period of his severance entitlement).
8.7 Additional Understandings
Reference is made to the Pension and Benefits Agreement, which concerns
certain Benefit Plans. To the extent of any conflict between the terms and
provisions of this Agreement and the terms and conditions of the Pension and
Benefits Agreement, the Pension and Benefits Agreement shall control.
ARTICLE IX
CONDITIONS OF CLOSING
9.1 Conditions for the Benefit of Purchaser
The purchase of the Purchased Assets in accordance with the terms of this
Agreement is subject to the following conditions, each of which is hereby
declared to be for the exclusive benefit of Purchaser. Each condition is to be
performed or complied with in all respects at or prior to the Closing Date:
(a) Truth of Representations and Warranties of Vendor. The representations and
warranties of Vendor contained in this Agreement or in any Schedule annexed
hereto or in any certificate or other document delivered or given pursuant
to this Agreement (considered individually and collectively), shall have
been true and correct in all material respects as of the date of this
Agreement, and shall be true and correct in all material respects as of the
Closing Date as though made on such date, except that any representation or
warranty qualified by "material" or "Material Adverse Effect" shall be true
and correct in all respects.
(b) Performance of Covenants by Vendor. All of the covenants, obligations and
agreements that Vendor is required to perform or to comply with pursuant to
this Agreement at or prior to the Closing Date (considered individually and
collectively) shall have been performed or complied with in all material
respects at or prior to the Closing Date.
(c) Governmental Approvals. There shall have been obtained from all necessary
Governmental Authorities all approvals, consents and assurances, in form
and substance reasonably satisfactory to Purchaser's legal counsel,
necessary in order to permit the transactions contemplated herein to be
completed on the Closing Date without affecting or resulting in the
termination, cancellation or modification of this Agreement or in the
termination, cancellation, material modification, non-reissuance or
non-transfer of any License (including the Non-Transferable Licenses),
including those identified in Schedule 4.1(d)(iii), or of any Environmental
Permit, the loss of which with respect to any such Environmental Permit
would have a Material Adverse Effect.
(d) Litigation. There shall be no actions, claims, investigations, arbitrations
or other proceedings (whether or not on behalf of Vendor) pending or
threatened to restrain, enjoin or invalidate any transaction contemplated
by this Agreement.
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(e) Proceedings. No action, suit or proceeding will be pending or threatened in
writing before any judicial authority or Government Entity (i) seeking to
prevent or prohibit the consummation of any material transactions pursuant
to this Agreement where an adverse result could reasonably be expected to
cause any such transaction to be rescinded following consummation, or (ii)
which could reasonably be expected to materially and adversely affect the
Purchaser's right to conduct the Business or to own the Purchased Assets or
the Vendor's performance of its material obligations pursuant hereto and no
judgment, order, decree, stipulation, injunction or charge having any such
effect will exist at such time.
(f) Environmental Matters. Vendor will furnish written evidence reasonably
satisfactory to Purchaser of its manifesting and disposing of all hazardous
waste pursuant to the Ministry of Environment and Energy Ontario Reg. 347 s
18(10).
(g) Pension Matters. Vendor will furnish written evidence reasonably
satisfactory to Purchaser of its funding to the trust for the benefit of
the NORDX/CDT Negotiated Pension Plan the underfunded amount for the
NORDX/CDT Negotiated Pension Plan as reflected in the Towers Xxxxxx
December 31, 2001 actuarial valuation, the amount of which shall not be
less than CDN $Three Million Eight Hundred Sixty-Eight Thousand Four
Hundred Dollars (CDN$3,868,400) ("Pension Fund Amount") for the pension
plan for the unionized Employees of the Business; provided that if Vendor
shall not have taken such action by Closing, Purchaser and Vendor shall
cause such amount to be funded by the Escrow Agent out of the Closing Cash
Purchase Price.
(h) No Damage or Destruction. On the Closing Date, there shall not exist
any damage to or destruction of any parts of the Business that,
individually or in the aggregate, would materially impair the use or
occupancy of the Kingston Property or the operation of the Business.
If any of the conditions of this Section 9.1 has not been satisfied,
or if satisfaction of any of the conditions of this Section 9.1 becomes
impossible, at any time before October 31, 2002 for reasons other than
Purchaser's failure to comply with its obligations under this Agreement,
then Purchaser may terminate this Agreement by notice to Vendor at any time
prior to the Closing without further formality.
9.2 Conditions for the Benefit of Vendor
The sale of the Purchased Assets in accordance with the terms of this
Agreement is subject to the following conditions, each of which is hereby
declared to be for the exclusive benefit of Vendor. Each condition is to be
performed or complied with in all respects at or prior to the Closing Date:
(a) Truth of Representations and Warranties of Purchaser. The representations
and warranties of Purchaser contained in this Agreement or in any
certificate or other document delivered or given pursuant to this Agreement
(considered individually and collectively), shall have been true and
correct in all material aspects as of the date of this Agreement, and shall
be true and correct in all material respects as of the Closing Date
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as though made on such date, except that any representation or warranty
qualified by "material" or "Material Adverse Effect" shall be true and
correct in all respects.
(b) Performance of Covenants by Purchaser. All of the covenants,
obligations and agreements that Purchaser is required to perform or to
comply with pursuant to this Agreement at or prior to the Closing Date
(considered individually and collectively) shall have been performed or
complied with in all material respects at or prior to the Closing Date.
(c) Governmental Approvals. There shall have been obtained from all
appropriate Governmental Authorities all approvals, consents and
assurances, in form and substance reasonably satisfactory to Vendor's
legal counsel, necessary in order to permit the transactions
contemplated herein to be completed on the Closing Date without
affecting or resulting in the termination, cancellation or modification
of this Agreement.
(d) Litigation. There shall be no actions, claims, investigations,
arbitrations or other proceedings (whether or not on behalf of
Purchaser) pending or threatened to restrain, enjoin or invalidate any
transaction contemplated by this Agreement.
(e) Consents. Co-contractants and appropriate Governmental Authorities
shall not have imposed upon Vendor unduly onerous terms in order to
give their consents to the transfers of Contracts and Licenses, the
re-issuance of Non-Transferable Licenses or Environmental Permits, or
terms which would render any of Vendor's representations and warranties
untrue.
If any of the conditions of this Section 9.2 has not been satisfied, or
if satisfaction of any of the conditions of this Section 9.2 becomes impossible,
at any time before October 31, 2002 for reasons other than Vendor's failure to
comply with its obligations under this Agreement, then Vendor may terminate this
Agreement by notice to Purchaser at any time prior to Closing without further
formality.
9.3 Effects of Termination
If this Agreement is terminated pursuant to Section 9.1 or 9.2, then
all further obligations of the Parties under this Agreement will terminate,
except that the obligations in Sections 14.7 (Expenses) and 14.10 (Governing
Law) will survive. Notwithstanding the foregoing, if this Agreement is
terminated by a Party because of the other Party's failure to comply with its
covenants under this Agreement, then the terminating Party's right to pursue all
legal remedies will survive such termination unimpaired.
ARTICLE X
INDEMNIFICATION
10.1 Indemnification by Vendor
Subject to Sections 10.8 and 10.9, Vendor shall indemnify and hold
Purchaser, its Affiliates and its and their directors, officers, employees and
agents (collectively, "Purchaser's
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Indemnified Group") harmless from and against any claims, demands, actions,
causes of action, judgments, damages, losses, liabilities, costs or expenses
(including interest, penalties and attorneys' fees) (collectively, the "Losses")
which may be made against any of Purchaser's Indemnified Group or which it may
suffer or incur as a result of, arising out of or relating to:
(a) any violation, contravention or breach of any covenant, agreement or
obligation of Vendor or the U. S. Affiliate under or pursuant to this
Agreement or in any certificate or other document delivered or given in
connection with the Closing pursuant to this Agreement (including,
without limitation, the obligation of Vendor to discharge on a timely
basis the Retained Liabilities);
(b) any Retained Liabilities; or
(c) any incorrectness in, or breach of, any representation or warranty made
by Vendor in Section 4.1, the Schedules annexed hereto or in any
certificate or other document delivered or given pursuant to this
Agreement.
10.2 Indemnification by Purchaser
Subject to Sections 10.8 and 10.9, Purchaser shall indemnify and hold
Vendor, its Affiliates and its and their directors, officers, employees and
agents (collectively, "Vendor's Indemnified Group") harmless from and against
any Losses which may be made against any of Vendor's Indemnified Group or which
any of them may suffer or incur as a result of, arising out of or relating to:
(a) any violation, contravention or breach of any covenant, agreement or
obligation of Purchaser under or pursuant to this Agreement or in any
certificate or other document delivered or given in connection with the
Closing pursuant to this Agreement (including, without limitation, the
obligation of Purchaser to assume and discharge on a timely basis the
Assumed Liabilities);
(b) any Assumed Liabilities; or
(c) any incorrectness in, or breach of, any representation or warranty made
by Purchaser in Section 4.2, the Schedules annexed hereto or in any
certificate or other document delivered or given pursuant to this
Agreement.
10.3 Obligation to Reimburse; Limitations
The Party providing indemnification hereunder (the "Indemnifying Party")
shall reimburse, on demand, to the Party being indemnified hereunder (the
"Indemnified Party") the amount of any Losses suffered or incurred by the
Indemnified Party, the whole as of the date that the Indemnified Party incurs
any such Losses.
Notwithstanding anything to the contrary in this Agreement, no Party
shall be liable to the other Party for any indirect, special, punitive,
exemplary or consequential loss or damage (including any loss of revenue or
profit) arising out of this Agreement, except for any such loss or damage
claimed by a third party (including a Governmental Authority) against the
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Indemnified Party. Both Parties shall take commercially reasonable actions to
mitigate their Losses. Except as set out in Section 14.18, the rights to
indemnification under this Article X shall not be subject to set-off for any
claim by the Indemnifying Party against any Indemnified Party, whether or not
arising from the same event or matter giving rise to such Indemnified Party's
claim for indemnification.
10.4 Notification
Promptly upon obtaining knowledge thereof, the Indemnified Party shall
notify in writing the Indemnifying Party of any cause which the Indemnified
Party has determined has given or could reasonably give rise to indemnification
under this Article X; such notice to the Indemnifying Party shall set forth in
reasonable details the nature of the claim, including the provisions of this
Agreement pursuant to which indemnification is sought and an estimate of the
Losses for which indemnification is sought. The omission so to notify the
Indemnifying Party shall not relieve the Indemnifying Party from any duty to
indemnify and hold harmless under this Agreement with respect to such cause
unless (and only to that extent) the omission to notify materially prejudices
the ability of the Indemnifying Party to exercise its right to defend provided
in this Article X.
10.5 Defense of Third Party Claim
If any legal proceeding shall be instituted or any claim or demand shall
be asserted by a third party against the Indemnified Party (each a "Third Party
Claim"), then the Indemnifying Party shall have the right, after receipt of the
Indemnified Party's notice under Section 10.4 and upon giving notice to the
Indemnified Party within thirty (30) calendar days of such receipt, to defend
the Third Party Claim at its own cost and expense with counsel of its own
selection, provided that:
(a) the Indemnified Party shall at all times have the right to fully
participate in the defense at its own expense;
(b) the Third Party Claim seeks only monetary damages and does not seek any
injunctive or other relief against the Indemnified Party; and
(c) legal counsel chosen by the Indemnifying Party is satisfactory to the
Indemnified Party, acting reasonably.
Amounts payable by the Indemnifying Party pursuant to a Third Party
Claim shall be paid in accordance with the terms of the settlement or the
judgment, as applicable, but in any event prior to the expiry of any delay for a
judgment to become executory.
10.6 No Compromise
The Indemnifying Party shall not compromise and settle or cause a
compromise and settlement of any Third Party Claim without the prior written
consent of the Indemnified Party, unless the terms of the compromise and
settlement require only the payment of money and do not require the Indemnified
Party to admit any wrongdoing or take or refrain from taking any action.
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10.7 Failure to Defend
If the Indemnifying Party fails:
(a) within thirty (30) calendar days from receipt of the notice of a Third
Party Claim in accordance with Section 10.4 to give notice of its
intention to defend the Third Party Claim in accordance with Section
10.5; or
(b) to comply at any time with Section 10.5(c);
then the Indemnifying Party shall be deemed to have waived its right to
defend the Third Party Claim and the Indemnified Party shall have the
right (but not the obligation) to undertake the defense of the Third
Party Claim and to compromise and settle the Third Party Claim on
behalf, for the account and at the risk and expense, of the
Indemnifying Party.
10.8 Time Limitations
The representations and warranties of the Vendor contained in Section
4.1 of this Agreement shall survive the Closing and, notwithstanding the Closing
and any investigation made by or on behalf of the Purchaser, shall continue for
a period of twenty-four (24) months after the Closing Date and any claim in
respect thereof shall be made in writing during such time period as provided
hereto except that:
(a) The representations and warranties set out in Sections 4.1(a), 4.1(b),
4.1(c) and 4.1(h) shall survive and continue in full force and effect
without limitation of time; and
(b) A claim for any breach by the Vendor of any of the representations and
warranties contained in this Agreement involving fraud or fraudulent
misrepresentation may be made at any time subject only to applicable
limitation periods imposed by Law.
The representations and warranties of the Purchaser contained in
Section 4.2 of this Agreement shall survive the Closing and, notwithstanding
such Closing and any investigation made by or on behalf of any of the Vendor,
shall continue in full force and effect for the benefit of the Vendor for a
period of twenty-four (24) months from the Closing Date and any claim in respect
thereof (except a claim based on fraud) shall be made in writing within such
time period as provided herein.
Any claim for a violation, contravention or breach of any covenant
contained in this Agreement or in any certificate or other document delivered or
given pursuant to this Agreement (other than representations and warranties)
shall survive the Closing and shall continue in full force and effect without
limitation of time.
10.9 Limitation on Indemnification
The obligations of indemnification set out in Sections 10.1 and 10.2
shall:
(a) not be applicable with respect to obligations of indemnification
relating to Section 4.1 until the Losses in the aggregate exceed Four
Hundred Fifty Thousand Dollars
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($450,000), in which case the obligations of indemnification with
respect to Section 4.1 shall apply to all Losses as and from the first
dollar of Losses;
(b) not apply to the extent that the Losses claimed have been reimbursed
through insurance to the Indemnified Party; and
(c) with respect to the obligations of indemnification relating to Section
4.1, not exceed the Closing Cash Purchase Price plus the Holdback
Amounts less any adjustments pursuant to Section 3.3..
The obligations of indemnification set out in 10.1(c) shall not apply
to the extent (but only to the extent) arising in connection with or as
a result of the Purchaser's or its Affiliates' actions following the
Closing, including any announcement or decision regarding the future
of the facility located on the Kingston Property (it being understood,
however, that any such announcement will not affect or diminish
Vendor's obligations with respect to any Benefit Plans of Vendor or its
Affiliates).
10.10 Survival of Indemnification
The obligation of indemnification set forth herein shall survive the
completion of the transactions contemplated in this Agreement, provided,
however, that as a condition to the exercise of the right to be indemnified
under either of Sections 10.1(c) with respect to Section 4.1 or 10.2(c) with
respect to Section 4.2, the Indemnified Party shall have given written notice
thereof to the Indemnifying Party within twenty-four (24) months from the
Closing Date, except for any claim thereunder based on fraud, which claim may be
made at any time. The Parties may assert any claim involving a breach of
representation or warranty before expiration of the applicable survival period
provided at Section 10.8, but as long as such claim is asserted in a timely
fashion in accordance with the provisions of this Agreement, the claim will
continue to be effective even though the survival period may subsequently expire
before the claim is resolved.
10.11 Sole Remedies
The provisions of this Article X and any other recourses specifically
referred to in this Agreement and in any certificate or other document delivered
or given pursuant to this Agreement shall be the sole remedies of the Parties
with respect to the matters herein, subject, however, to the right of any Party
to seek specific performance, injunctive relief, or any other extraordinary
remedy in a court of competent jurisdiction for breaches which give rise to such
extraordinary remedies.
ARTICLE XI
CLOSING
11.1 Date, Time and Place of Closing
Subject to the terms and conditions of this Agreement (including
Section 6.2), the Closing shall take place at the offices of Stikeman Elliott
(Toronto) within two business days
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after Purchaser provides notice to Vendor (but in any event no later than
October 31, 2002)(the "Closing Date") at the hour of 10:00 a.m. (the "Time of
Closing"), or at such other place, on such other date and at such other time as
may be agreed by the Parties.
ARTICLE XII
POST-CLOSING COVENANTS
12.1 Books and Records
At any time and from time to time until the seventh anniversary of the
Closing Date, Vendor and its representatives will have the reasonable right to
inspect and make copies of the Books and Records then possessed by Purchaser
relating to Vendor or the Business on or prior to the Closing Date to the extent
Vendor requires such information (i) for Tax reporting; (ii) to provide
information required by Law; (iii) in connection with all financial reporting by
Vendor or any of Vendor's Affiliates; (iv) in connection with any action, claim,
suit, demand, litigation or arbitration proceeding, investigation, enquiry or
any other proceedings (collectively the "Proceedings") against Vendor, brought
by Vendor or to which Vendor is a party or for which Vendor has a legitimate
interest; or (v) for any other legitimate purpose. The foregoing right of
inspection shall only be exercisable upon prior reasonable notice to Purchaser
and in such a manner as to not interfere unreasonably with the normal operations
and business of Purchaser. Vendor shall reimburse Purchaser for its reasonable
costs and expenses in complying with this Section 12.1. The Purchaser shall, for
the purposes of complying with its obligations herein, preserve all Books and
Records for a period of seven (7) years after the Closing Date. Thereafter, such
Books and Records may be destroyed by Purchaser if it sends to Vendor written
notice of its intent to destroy some or all of the said Books and Records,
specifying with particularity the contents of the Books and Records to be
destroyed. Such Books and Records may then be destroyed after the 30th calendar
day after such notice is given unless Vendor objects to the destruction, in
which case Purchaser shall either agree to retain such Books and Records or
deliver such Books and Records to Vendor. Purchaser further agrees that the
Books and Records that are placed in storage will be indexed in such a manner as
to make individual document retrieval possible in an expeditious manner to the
extent Vendor has done so with respect to Books and Records of the Business
prior to Closing.
12.2 Access to Employees
After the Closing, Purchaser shall make the employees of the Business
available to Vendor for the purposes of providing Vendor with information and
assistance that Vendor may reasonably require in connection with any
Proceedings. Purchaser shall instruct the relevant employees to cooperate in
good faith with Vendor. Vendor shall exercise this right so as to minimize any
disruption to the operations of the Business.
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ARTICLE XIII
DISPUTES
13.1 Disputes
At any time after the Closing Date, in the event any dispute, claim,
question or difference (a "Dispute") arises with respect to this Agreement or
its performance, enforcement, breach, termination or validity (other than
disputes relating to Third Party Claims, which will be resolved in the manner
set forth in Section 10.5), the Parties shall use their best efforts to settle
the Dispute. To this end, they shall consult and negotiate with each other, in
good faith and understanding of their mutual interests, to reach a just and
equitable solution satisfactory to all Parties.
If the Parties do not reach a solution pursuant to the previous
paragraph within a period of fifteen (15) business days following the first
notice of the Dispute by any Party to the other, then the Party may pursue the
claim in any court of Canada having subject matter jurisdiction and personal
jurisdiction over the other Party. Other than actions or claims to join a Party
in connection with a Third Party Claim under Section 10.5 and actions or claims
to enforce judgments, any legal proceeding initiated by a Party against any
other Party shall be filed in any court of Ontario, Canada having subject matter
jurisdiction; the Parties consent to the jurisdiction of any such court. The
substantive law of Ontario shall govern all Disputes. The prevailing Party in
any litigation shall be entitled to recover reasonable attorneys' fees.
ARTICLE XIV
MISCELLANEOUS
14.1 Risk of Loss
From the date hereof up to the Time of Closing on the Closing Date, the
Purchased Assets shall be and shall remain at the risk of Vendor. If, prior to
the Time of Closing on the Closing Date, all or any portion of the Purchased
Assets that individually or in the aggregate would materially impair the use or
occupancy of the Kingston Property or operation of the Business are destroyed or
damaged by fire or other casualty or shall be appropriated, expropriated or
seized by any Governmental Authority, then Purchaser shall have the option on or
prior to the Time of Closing on the Closing Date:
(a) to terminate this Agreement forthwith upon written notice to Vendor to
such effect; or
(b) to proceed with the Closing without reduction of the Purchase Price, in
which case all proceeds of insurance or compensation for expropriation
or seizure (up to the amount of the Purchase Price) shall be payable to
Purchaser and all right, title and interest of Vendor to any such
amounts not paid by the Closing Date shall be assigned to Purchaser.
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14.2 Announcements
Prior to Closing, any press release, public announcement or publicity
with respect to the transactions contemplated in this Agreement shall be made
only with the prior written consent of the Parties unless such release,
announcement or publicity is required by Law, or exchange rule or regulation, in
which case the Party required to make such release, announcement or publicity
shall use its reasonable efforts to obtain approval of the other Party to the
form, nature and extent of such disclosure, which approval shall not be
unreasonably withheld. Purchaser acknowledges that Vendor is obliged under
securities Laws and stock exchange rules to issue a press release upon execution
of this Agreement. Unless otherwise determined by a court of competent
jurisdiction, each Party shall keep this Agreement strictly confidential and
make no disclosure thereof to any Person except the Party's advisors and lenders
and except as may be required in connection with the consummation of the
transactions contemplated hereby or as may be required by Law, without the prior
written consent of the other Party.
14.3 Further Assurances
Each Party upon the request of the other, whether at or after the
Closing, shall do, execute, acknowledge and deliver or cause to be done,
executed, acknowledged or delivered all such further acts, deeds, documents,
assignments, transfers, conveyances, powers of attorney and assurances as may be
reasonably necessary or desirable to effect complete consummation of the
transactions contemplated by this Agreement.
14.4 Successors in Interest
This Agreement and the provisions hereof shall inure to the benefit of
and be binding upon the Parties and their respective successors and assigns.
Vendor may not assign this Agreement or any of its rights and obligations
hereunder without the prior written consent of Purchaser. Purchaser may assign
this Agreement and all of Purchaser's rights and obligations hereunder to an
Affiliate of Purchaser, provided, however, that such assignment shall not
relieve Purchaser of its obligations hereunder.
14.5 Joint and Several Obligations
The obligations of Belden Canada and Belden Communications as Purchaser
under and pursuant to this Agreement shall be joint and several, notwithstanding
that Belden Communications and Belden Canada may each act as Purchaser in
respect to identified Purchased Assets in accordance with Section 2.3.
(a) CDT Guarantee of Performance. Cable Design Technologies Corporation
("CDT"), as principal obligor and not as surety, covenants with
Purchaser:
(i) to cause Vendor to effect prompt and complete performance of all
the terms, covenants, conditions and provisions of this Agreement
and of the agreements which are executed and delivered by Vendor
pursuant to this Agreement (the "Transaction Documents") that are
to be kept, observed and performed by Vendor;
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(ii) that, if for any reason whatsoever, including the insolvency or
bankruptcy of Vendor, Vendor shall at any time or from time to time
fail to keep, perform or observe any term, covenant, condition or
provision of this Agreement or any of the Transaction Documents that is
to be kept, observed or performed by Vendor, then CDT shall forthwith
on demand of Purchaser, perform or observe, as the case may be, such
term, covenant, condition or provision in accordance with the relevant
provisions of this Agreement and the Transaction Documents;
(iii) that CDT is jointly and severally bound with Vendor to perform the
terms, covenants, conditions and provisions of this Agreement and the
Transaction Documents that are to be kept, observed and performed by
Vendor and, in the enforcement of its rights pursuant to this Section
14.5(a) Purchaser may proceed against CDT as if CDT was a principal
party under this Agreement with respect to such terms, covenants,
conditions and provisions applicable to Vendor.
In the event of a default by Vendor under this Agreement or the
Transaction Documents, CDT waives any right to require Purchaser to:
(iv) proceed against Vendor or pursue any rights or remedies with respect to
this Agreement or the Transaction Documents against Vendor, or
(v) pursue any other remedy whatsoever in the power of Purchaser prior to
Purchaser pursuing any rights it may have under this Agreement or the
Transaction Documents against CDT.
Without limiting the generality of the foregoing, the liability of CDT
shall not be deemed to have been waived, released, discharged, impaired or
affected by reason of the release or discharge of Vendor in any receivership,
bankruptcy, winding-up or other creditors' proceedings or the rejection,
disaffirmance or disclaimer of this Agreement or any of the Transaction
Documents in any proceeding, and shall continue with respect to the periods
prior thereto and thereafter, for and with respect to this Agreement and the
Transaction Documents.
This Section 14.5(a) shall be solely for the benefit of Purchaser, is
not transferable by Purchaser and shall not in any way obligate CDT to any other
party. With respect to (i) any sale or transfer of all or substantially all of
the assets of CDT (whether in one or a series of transactions), (ii) any merger,
spin-off, consolidation or other related transaction of CDT (whether or not CDT
is the surviving or successor party) with substantially the effect of sub-part
(i), or (iii) any dissolution or liquidation of CDT (collectively, "Significant
Transactions"), CDT shall ensure that any purchaser in a Significant Transaction
under sub-part (i) above and any successor or survivor of CDT in any Significant
Transaction under sub-parts (ii) or (iii) above shall expressly assume in
writing CDT's obligations under this Section 14.5(a). In any event, a purchaser
under a sub-part (i) Significant Transaction (as noted above) and any successor
or surviving party under a sub-part (ii) or (iii) Significant Transaction (as
noted above) shall be jointly and severally obligated to fulfill CDT's
obligations under this Section 14.5(a). Further, CDT shall provide to Purchaser
at least thirty (30) days prior written notice of a sub-part (iii) Significant
Transaction.
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(b) Belden Guarantee of Performance. Xxxxxx Inc. ("Belden"), as principal
obligor and not as surety, convenants with Vendor:
(i) to cause Purchaser to effect prompt and complete performance of all
the terms, covenants, conditions and provisions of this Agreement
and of the agreements which are executed and delivered by Purchaser
pursuant to this Agreement (the "Transaction Documents") that are to
be kept, observed and performed by Purchaser;
(ii) that, if for any reason whatsoever, including the insolvency or
bankruptcy of Purchaser, Purchaser shall at any time or from time to
time fail to keep, perform or observe any term, covenant, condition
or provision of this Agreement or any of the Transaction Documents
that is to be kept, observed or performed by Purchaser, then Belden
shall forthwith on demand of Vendor, perform or observe, as the case
may be, such term, covenant, condition or provision in accordance
with the relevant provisions of this Agreement and the Transaction
Documents;
(iii) that Belden is jointly and severally bound with Purchaser to perform
the terms, covenants, conditions and provisions of this Agreement
and the Transaction Documents that are to be kept, observed and
performed by Purchaser and, in the enforcement of its rights
pursuant to this Section 14.5(b) Vendor may proceed against Belden
as if Belden was a principal party under this Agreement with respect
to such terms, covenants, conditions and provisions applicable to
Purchaser.
In the event of a default by Purchaser under this Agreement or the
Transaction Documents, Belden waives any right to require Vendor to:
(iv) proceed against Purchaser or pursue any rights or remedies with
respect to this Agreement or the Transaction Documents against
Purchaser, or
(v) pursue any other remedy whatsoever in the power of Vendor prior to
Vendor pursuing any rights it may have under this Agreement or the
Transaction Documents against Belden.
Without limiting the generality of the foregoing, the liability of
Belden shall not be deemed to have been waived, released, discharged,
impaired or affected by reason of the release or discharge of Purchaser in
or any receivership, bankruptcy, winding-up or other creditors'
proceedings the rejection, disaffirmance or disclaimer of this Agreement
or any of the Transaction Documents in any proceeding, and shall continue
with respect to the periods prior thereto and thereafter, for and with
respect to this Agreement and the Transaction Documents.
This Section 14.5(b) shall be solely for the benefit of Vendor, is
not transferable by Vendor and shall not in any way obligate Belden to any
other party.
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14.6 Notices
Any notice, consent, authorization, direction or other communication
required or permitted to be given hereunder shall be in writing and shall be
delivered either by personal delivery or by telecopier or similar
telecommunications device (excluding by way of electronic mail) and addressed as
follows:
(a) in the case of Vendor, to it at:
NORDX/CDT, INC.
c/o Cable Design Technologies Inc.
Xxxxxx Plaza 7
661 Xxxxxxxx Drive
Pittsburg, PA 15220
H9R 5Z3
Attention: General Counsel
Telecopier: (000) 000-0000
with a copy to:
STIKEMAN ELLIOTT
0000 Xxxx-Xxxxxxxx Xxxx. Xxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: Xxxxxx Xxxxxx and Xxxxxxx X. Xxxxxxx
Telecopier: (000) 000-0000
(b) in the case of Purchaser, to it at:
Xxxxxx (Canada) Inc.
c/o Belden Inc.
0000 Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xx. Xxxxx, XX 00000
Attention: General Counsel
Telecopier: (000) 000-0000
with a copy to:
-00-
Xxxxxxx XxXxxxx Xxxxxxxxx XXX
Xxxxx 0000, Xxxxxx Plaza
00 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
Any notice, consent, authorization, direction or other communication
delivered as aforesaid shall be deemed to have been effectively delivered and
received, if sent by telecopier or similar telecommunications device (excluding
by way of electronic mail) on the date next following receipt of such
transmission or, if by personal delivery, to have been delivered and received on
the date of such delivery, provided, however, that if such date is not a
business day in the jurisdiction of receipt, then it shall be deemed to have
been delivered and received on the business day next following such delivery.
Either Party may change its address for service by notice delivered as
aforesaid.
14.7 Expenses
Each Party shall bear and pay all costs, expenses and fees (including,
without limitation, legal counsel and accounting fees and disbursements)
incurred by it in connection with the preparation, execution and consummation of
this Agreement and the transactions contemplated hereunder.
14.8 Counterparts
This Agreement may be executed in counterparts, each of which when so
executed shall be deemed an original, and such counterparts together shall
constitute one and the same instrument.
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14.9 Severability
Any Article, Section or other subdivision of this Agreement or any other
provision of this Agreement which is, or becomes, illegal, invalid or
unenforceable shall be severed herefrom and shall be ineffective to the extent
of such illegality, invalidity or unenforceability and shall not affect or
impair the remaining provisions hereof, which provisions shall (a) be severed
from any illegal, invalid or unenforceable Article, Section or other subdivision
of this Agreement or any other provision of this Agreement, and (b) otherwise
remain in full force and effect.
14.10 Governing Law
This Agreement shall be governed by and interpreted and construed in
accordance with the Laws presently in force in the Province of Ontario without
reference to the conflict of laws rules.
14.11 Entire Agreement
This Agreement, including the Schedules and Exhibits, constitutes the
entire Agreement between the Parties pertaining to the subject matter hereof,
and supersedes all prior agreements, understandings, negotiations and
discussions of the Parties (but excluding, for greater certainty, the
confidentiality agreement signed prior to the execution of this Agreement which
shall remain in full force and effect).
14.12 Inconsistency
This Agreement shall override the Schedules annexed hereto to the extent
of any inconsistency.
14.13 Gender
Any reference in this Agreement to any gender shall include both genders
and the neuter, and words herein importing the singular number only shall
include the plural and vice versa.
14.14 Currency
All of the dollar amounts mentioned in this Agreement or in the Schedules
and Exhibits annexed hereto shall be in Canadian funds, unless otherwise
specifically denominated.
14.15 Headings
The headings in this Agreement are inserted for convenience of reference
only and shall not affect the interpretation hereof.
14.16 Amendment
No amendment to this Agreement shall be binding unless expressly provided
in an instrument duly executed by the Parties.
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14.17 Waiver
No waiver, whether by conduct or otherwise, of any of the provisions of
this Agreement shall be deemed to constitute a waiver of any other provisions
(whether or not similar) nor shall such waiver constitute a continuing waiver
unless otherwise expressly provided in an instrument duly executed by the
Parties.
14.18 Set Off
Prior to the transmittal of any Holdback Amounts, in the event Purchaser
determines that Vendor has not paid any amounts validly due and then owing by
Vendor under any pension, retirement or post-retirement plan of Vendor or its
Affiliates or predecessors that relates to any Employees that Vendor has failed
to pay in accordance with the terms of such benefits ("Disputed Pension
Amounts"), and Vendor provides, within fifteen (15) days of written notice from
Purchaser of such payment failure, a written opinion of a Canadian actuary or
law firm that such Disputed Pension Amounts are not validly due and then owing
(in the absence of the delivery of such written opinion, Purchaser being
authorized to pay out the Disputed Pension Amounts directly to such Employees),
then Purchaser may pay any Holdback Amounts owed to Vendor into an escrow
account established at a Canadian national bank; provided prior to such payment
Purchaser must provide to Vendor a written opinion of a Canadian actuary or law
firm that such Disputed Pension Amounts are validly due and then owing.
Such money shall be held for the benefit of Vendor and Purchaser pending
resolution of the dispute regarding Disputed Pension Amounts. The resolution of
such dispute shall determine whether payment should go to: (i) Vendor, to the
extent there is no valid Disputed Pension Amount, or (ii) to discharge any
Disputed Pension Amount, to the extent it is determined that there is a valid
Disputed Pension Amount. The cost of such escrow arrangements shall be paid out
of the interest accrued under the escrow account (investments under such account
to be high quality, no risk investments agreed to by Vendor and Purchaser) and
otherwise to be paid one-half by Purchaser and one-half by Vendor. To the extent
the Holdback Amounts are paid into escrow pursuant to this Section 14.18,
Purchaser's obligations to pay to Vendor the Holdback Amounts shall be reduced.
14.19 Supply Agreement
In accordance with Schedule 14.19, Purchaser will sell to Vendor the
products described on Schedule 14.19 at the prices and on the terms noted
therein. At the request of either Party, prior to the Closing Date, Purchaser
and Vendor shall work in good faith to document the terms set forth on Schedule
14.19 in the form of a supply agreement. However, if the Parties fail to do so,
this Section 14.19 and Schedule 14.19 shall nevertheless represent their
agreement with respect to such matter.
(SIGNATURE PAGE FOLLOWS)
IN WITNESS WHEREOF, the Parties have executed this Asset Purchase Agreement on
the date and at the place first above mentioned.
NORDX/CDT, INC.
Per: _________________________________
Name:
Title:
XXXXXX (CANADA) INC.
Per: _________________________________
Name:
Title:
BELDEN COMMUNICATIONS COMPANY
Per: _________________________________
Name:
Title:
With respect to Section 14.5(b):
XXXXXX INC.
Per: _________________________________
Name:
Title:
With respect to Section 14.5(a):
CABLE DESIGN TECHNOLOGIES CORP.
Per: _________________________________
Name:
Title: