<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported):
January 8, 1997
BELDEN INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
0-12280 76-0412617
(Commission File Number) (I.R.S. Employer Identification No.)
7701 Forsyth Boulevard
Suite 800 63105
St. Louis, Missouri (Zip code)
(Address of principal executive offices)
Registrant's telephone number, including area code
(314) 854-8000
Exhibit Index on page 3
PAGE 1 of 160 <PAGE>
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS.
In January 8, 1997, the Registrant's wholly-owned subsidiary Belden
Wire & Cable Company ("BWC") acquired substantially all of the assets of the
Alpha Wire Division of Alpha Wire Corporation ("AWC"), and the Registrant's
indirect wholly-owned subsidiary Belden UK Limited ("Belden-UK") acquired
substantially all of the assets of Alpha Wire Limited ("AWL"). AWC is a
New Jersey corporation and AWL is a Delaware corporation. The assets
transferred to BWC and Belden-UK include inventory, receivables, fixtures,
intangibles and other miscellaneous assets. These assets were used by AWC
and AWL in the marketing and sale of a range of wire and cable and other
products, including multiconductor cable, coaxial cable, hook-up wire
and shrinkable tubing. BWC and Belden-UK intend to continue to use such
assets for such purpose.
The acquisition by BWC of substantially all of the assets of the Alpha
Wire Division of AWC was effected pursuant to an Asset Purchase Agreement
dated as of November 21, 1996 between BWC and AWC, and the acquisition by
Belden-UK of substantially all of the assets of AWL was effected pursuant to
an Asset Purchase Agreement/U.K. Assets between Belden-UK and AWL dated as
of January 7, 1997. The consideration paid for both acquisitions
collectively consisted of $70,000,000 cash plus the assumption of
approximately $4,000,000 of assumed liabilities. Such funds were
provided pursuant to the Registrant's credit agreement with Bank of America
National Trust and Savings Association, NationsBank, N.A., Royal Bank of
Canada, Wachovia Bank of Georgia, N.A., The Boatmen's National Bank of St.
Louis, ABN AMRO Bank N.V., The Northern Trust Company and Commerzbank
Aktiengesellschaft, Grand Cayman Branch. The purchase price was determined
based on negotiations with AWC. The purchase price is subject to a
post-closing adjustment for changes in the net assets of AWC and AWL for
the period between June 30, 1996 and the closing date.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of Alpha Wire Division
It is impracticable to provide the required financial statements at the
time of the filing of this report. The required financial statements will
be filed within 60 days from the due date for filing this report.
(b) Pro Forma Financial Information
It is impracticable to provide the required pro forma financial
information at the time of the filing of this report. The required pro
forma financial information will be filed within 60 days from the due date
for filing this report. <PAGE>
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(c) Exhibits Exhibit located at Page
2.1 Asset Purchase Agreement dated as of November 21, 1996.* 5
2.2 Asset Purchase Agreement/U.K. Assets dated as of
January 7, 1997.* 96
*The schedules and exhibits to these agreements have been omitted, but the
Registrant will furnish a copy of any omitted schedules or exhibits to the
Securities and Exchange Commission upon request.
3 <PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BELDEN INC.
Date: January 23, 1997 By /s/ Richard K. Reece
Richard K. Reece
Vice President, Finance, Treasurer and
Chief Financial Officer
(Chief Financial and Accounting Officer)
4<PAGE>
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EXHIBIT 2.1
Page 5<PAGE>
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Alpha Wire Corporation
ASSET PURCHASE AGREEMENT
between
BELDEN WIRE & CABLE COMPANY
as Buyer
and
ALPHA WIRE CORPORATION
as Seller
Dated November 21, 1996
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Alpha Wire Corporation
TABLE OF CONTENTS
Page
1. CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 8
2. PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . 17
3. REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . 30
4. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . 54
5. PRE-CLOSING COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 56
6. POST-CLOSING COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 60
7. CONDITIONS TO OBLIGATION TO CLOSE . . . . . . . . . . . . . . . . . 79
8. REMEDIES FOR BREACHES OF THIS AGREEMENT . . . . . . . . . . . . . . 84
9. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
10. GENERAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . 91
11. DISPUTE RESOLUTION . . . . . . . . . . . . . . . . . . . . . . . . 95
ASSET PURCHASE AGREEMENT Page 7 <PAGE>
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Alpha Wire Corporation
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is entered into as of November 21, 1996,
by Belden Wire & Cable Company, a Delaware corporation, or its designated
Affiliate ("Buyer"), and Alpha Wire Corporation, a New Jersey corporation
("Seller"). (The Buyer and the Seller may be individually referred to as a
"Party" and collectively as the "Parties").
This Agreement contemplates a transaction in which the Buyer will
purchase certain assets in exchange for cash and the assumption of certain
liabilities.
Now, the Parties agree as follows:
1. CERTAIN DEFINITIONS
1.1. "Active Employee" means an employee of the Business who on the
Closing Date is either (i) at work or (ii) absent from work solely
because of (a) holiday, (b) vacation, (c) illness or disability
which has prevented, or is expected to prevent, the employee from
working at his or her assigned job for no longer than three months
in total duration (including time before and after the Closing
Date), or (d) leave of absence which has lasted or is expected to
last no longer than three months in total duration (including time
before and after the Closing Date) or which is for military duty.
1.2 "Affiliate" means any Person that directly or indirectly controls,
is controlled by or is under common control with the named party.
1.3 "Agreement" means this Asset Purchase Agreement.
1.4 "Ancillary Agreements" means collectively the Non-compete Covenant
and Confidentiality Agreement of Philip R. Cowen (Exhibit 1.4A),
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Alpha Wire Corporation
the Letter of Credit (Exhibit 1.4B) and the Supply Agreement
(Exhibit 1.4C).
1.5 "Assets" means all right, title, and interest in and to all of the
assets of the Business, including without limitation all of its
(a) real property, leaseholds, subleases, improvements, fixtures,
fittings, easements, rights-of-way and other appurtenants, (b)
tangible personal property (such as machinery, and all other
equipment, inventories of raw materials and supplies, manufactured
and purchased parts, goods in process and finished goods,
furniture, fixtures, fittings, automobiles, trucks, tractors,
trailers, tools, jigs, and dies), (c) Intellectual Property
(including the right to use the name "Alpha", "Alpha Wire" and any
other name used by Seller in the Business), goodwill associated
therewith, licenses and sublicenses granted and obtained with
respect thereto, and rights thereunder, remedies against
infringements thereof, and rights to protection of interests
therein under the laws of all jurisdictions, (d) non-real property
leases, subleases, and rights thereunder, (e) agreements,
contracts, and rights thereunder, (f) indentures, mortgages,
instruments, Security Interests, guaranties, other similar
arrangements, and rights thereunder, all of which are in favor of
the Seller and none of which involve the Seller as being an
obligor, (g) accounts, notes, and other receivables in favor of
the Seller, (h) securities, (i) claims, deposits, lockboxes,
prepayments, refunds, causes of action, choses in action, rights
of recovery, rights of set off, and rights of recoupment (other
than any right of refund for the payment of income Taxes), (j)
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Alpha Wire Corporation
franchises, approvals, permits, licenses, orders, registrations,
certificates, variances, and similar rights obtained from
governments and governmental agencies, (k) books, records, ledgers
files, documents, correspondence, lists, plats, architectural
plans, drawings, and specifications, creative materials,
advertising and promotional materials, studies, reports, and other
printed or written materials, and (l) all other property, right
and assets of any kind not otherwise described in (a)-(k) above,
whether tangible or intangible, used in or relating to the
Business; provided, however, that the Assets shall not include the
Retained Assets.
1.6 "Assumed Liabilities" means those Liabilities of the Seller with
respect to the Business other than Retained Liabilities incurred
in the Ordinary Course:
1.6.1 that are listed on the Final Closing Balance Sheet, to
the extent and only to the extent of the amounts of
such items so listed, or
1.6.2 that arise after the Closing under contracts entered
into by the Seller which are not reflected on the
Final Closing Balance Sheet, but (i) are listed under
Section 3.14 of the Disclosure Schedule as "Contracts
Being Assumed by Buyer"; or (ii) not so listed on
Schedule 3.14 but were entered into in the Ordinary
Course for the purchase of goods or services to the
Business or for the sale of wire and cable products by
the Business.
1.7 "Balance Sheet Payment" has the meaning assigned in Section 2.5.
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Alpha Wire Corporation
1.8 "Business" means the business conducted by the Alpha Wire Division
of Seller involving the design, development and distribution of
wire and cable products.
1.9 "Buyer's Indemnified Group" has the meaning assigned in Section
8.2.
1.10 "Buyer's Letter" has the meaning assigned in Section 2.8.
1.11 "Claim" has the meaning assigned in Section 11.1.
1.12 "Closing" means the meeting held on the Closing Date at which the
Parties consummate the contemplated transactions.
1.13 "Closing Date" has the meaning assigned in Section 2.17.
1.14 "Code" means the Internal Revenue Code of 1986, as amended.
1.15 "Consents" has the meaning assigned in Section 5.2.
1.16 "Disclosure Schedule" has the meaning assigned in Article 3.
1.17 "Employee Benefit Plan" means each employee pension benefit plan
or arrangement, profit sharing plan or savings plan (including any
401(k) plan), each employee welfare benefit plan and each bonus,
incentive compensation, deferred compensation, severance or
similar plan, policy, contract or payroll practice providing
compensation or employee benefits maintained by, on behalf of, or
for the benefit of the Seller or to which the Seller is a
participating employer or is obligated to contribute or has any
legally enforceable liability and under which any employee
participates or has accrued any rights or under which the Seller
is liable in respect of an employee.
1.18 "Environmental Laws" shall include any federal, state or local
law, regulation, rule, standard, order or decree relating to
protection of health, safety or the environment and applicable to
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Alpha Wire Corporation
the business or activities of Seller or conditions resulting
therefrom, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, 42 U.S.C. Section 9601 et seq. ("CERCLA"), the Solid Waste
Disposal Act, as amended, 42 U.S.C. Section 7401 et seq., the Toxic
Substances Control Act, 15 U.S.C. Section 2601 et seq., the Water
Pollution Control Act, as amended, 33 U.S. C. Section 1251 et seq and
the New Jersey Industrial Site Recovery Act N.S.S.A. B:1K-6 et
seq. ("ISRA").
1.19 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
1.20 "Final Closing Date Net Asset Value" has the meaning assigned in
Section 2.15.
1.22 "Financial Statements" has the meaning assigned in Section 3.6.
1.23 "GAAP" means United States generally accepted accounting
principles as in effect from time to time.
1.24 "Indemnified Party" has the meaning assigned in Section 8.4.
1.25 "Indemnifying Party" has the meaning assigned in Section 8.4.
1.26 "Intellectual Property" means all (i) patents, patent
applications, inventions (whether or not patentable and whether or
not reduced to practice), invention disclosures, and improvements
thereto, (ii) trademarks, service marks, trade dress, logos, trade
names and corporate names and registrations and applications for
registration thereof, (iii) copyrights and registrations and
applications for registration thereof, (iv) mask works and
registrations and applications for registration thereof, (v)
computer software, data and documentation, (vi) trade secrets and
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Alpha Wire Corporation
confidential information and (vii) copies and tangible embodiments
of any of the foregoing (in whatever form or medium).
1.27 "Letter of Credit" means the Letter of Credit to be issued by a
bank reasonably acceptable to Buyer and delivered to Buyer at
Closing, in the form attached as Exhibit 1.4B except for the name
of the issuing bank and the other blanks appropriately completed.
1.28 "Liability" means any liability (whether known or unknown, whether
absolute or contingent, whether liquidated or unliquidated, and
whether due or to become due), including any liability for Taxes,
any damage or loss of any kind (including consequential, special,
punitive, and incidental), any judgment, settlement, expense or
cost (including those relating to any investigation or any defense
or prosecution of any proceedings), and any reasonable fees and
expenses of attorneys, accountants, experts and other consultants.
1.29 "Most Recent Financial Statements" has the meaning assigned in
Section 3.6.
1.30 "Most Recent Month End" has the meaning assigned in Section 3.6.
1.31 "Most Recent Year End" has the meaning assigned in Section 3.6.
1.32 "Occurrence" means an event, incident, accident, or condition,
including without any limitation which results from an act or
omission (including without limitation the sale of products and
continuous or repeated exposure to conditions which result in
bodily injury, death or damage of any kind).
1.33 "Ordinary Course" means the ordinary course of business of Seller
consistent with past custom and practice (including with respect
to quantity, quality and frequency).
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Alpha Wire Corporation
1.34 "Peg Statement of Net Assets" has the meaning assigned in Section
2.6.
1.35 "Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization, or any other form of
business or legal entity or government authority.
1.36 "Preliminary Closing Date Net Asset Value" has the meaning
assigned in Section 2.7.
1.37 "Preliminary Closing Balance Sheet" has the meaning assigned in
Section 2.7.
1.38 "Purchase Price" has the meaning assigned in Section 2.3.
1.39 "Regulated Materials" includes any chemical, pollutant,
contaminant, condition, petroleum or petroleum products, hazardous
or toxic substance, and any other substance, material or waste
defined as such or subject to regulation in any manner whatsoever
under any Environmental Law.
1.40 "Retained Assets" means all right, title and interest in and to
(i) cash and cash equivalents (including any "over draft"
accounts) outstanding on the Closing Date, (ii) repayment
obligations outstanding on the Closing Date arising from loans
made prior to the date hereof to shareholders, directors,
officers, employees or other related parties, (iii) all Regulated
Materials in, on, under or relating to any of the foregoing or any
of the Assets except to the extent currently used by Seller in the
conduct of the Business in the Ordinary Course and in accordance
with Environmental Laws, (iv) intercompany amounts to the extent
those amounts relate to investments in or permanent advances to
the Cowen Cable Division or Insul-Tab Division of Seller or to any
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Alpha Wire Corporation
other Affiliates of Seller, (v) any life insurance policies for
any shareholder of Seller (including the cash surrender value of
such policies and any receivables for premiums in excess of the
cash surrender value of such policies), (vi) to the extent not
used in the Business, the assets of Seller's Cowen Cable and
Insul-Tab Divisions or the assets of Seller's Affiliates, (vii)
the Trust Agreement ("Rabbi Trust"), dated as of February 13,
1991, between the Seller as grantor and Charles Wiggins as
trustee, along with the assets of such trust, and (viii) the items
listed on Exhibit 1.40.
1.41 "Retained Liabilities" means (i) all Liabilities relating to the
borrowing of money (including any related interest or deferred
loan costs), (ii) all Liabilities arising out of any of the
Retained Assets, whenever so arising, (iii) all Liabilities
associated with the multi-employer defined benefit pension plan
controlled and administered by the District 65 Collective
Bargaining Unit, (iv) all Liabilities retained by the Seller
pursuant to Section 6.8 hereof, (v) all Liabilities retained by
the Seller pursuant to Section 6.10.3 hereof, (vi) all Liabilities
for income Taxes, (vii) all Liabilities of the Seller for Taxes
arising from the consummation of the transactions contemplated by
this Agreement (except as otherwise expressly provided in Section
2.18); (viii) all Liabilities of the Seller to indemnify any
Person (including the Seller or its stockholders) by reason of the
fact that such Person is or was a director, officer, employee or
agent of the Seller, its Affiliates or its predecessors; (ix) all
Liabilities of the Seller for the costs and expenses incurred in
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Alpha Wire Corporation
connection with this Agreement; (x) all Liabilities of Seller
resulting from or relating to the borrowing of money, breach of
contract, tort, infringement or violation of law; (xi) all
Liabilities of Seller with respect to its or its predecessors'
acquisition of any of the assets or capital stock of any Person;
(xii) all Liabilities of Seller under this Agreement or any
Ancillary Agreement; (xiii) all Liabilities listed on Exhibit
1.41; (xiv) all Liabilities of Seller with respect to its other
operations, including those of its Cowen Cable Division and Insul-
Tab Division, or with respect to the operations of its Affiliates;
and (xv) all other Liabilities (whenever arising) of the Seller,
its Affiliates, their predecessors or otherwise relating to the
Business arising from or relating to any Occurrence or period on
or before the Closing Date, except for any Assumed Liabilities.
1.42 "Security Interest" means any mortgage, pledge, security interest,
encumbrance, charge or other lien.
1.43 "Seller's Indemnified Group" has the meaning assigned in Section
8.3.
1.44 "Seller's Knowledge" or similar terms mean the knowledge after
reasonable investigation (including after consulting with
employees of the Seller with responsibility for the subject
matter) of (i) the officers and directors of the Seller, and (ii)
the following individuals: Philip Cowen, Charles Wiggins, and with
respect to Section 3.21, Christine Birkner and with respect to
Section 3.23, Frank Steigerwalt.
1.45 "Seller's Letter" has the meaning assigned in Section 2.9.
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Alpha Wire Corporation
1.46 "Subsidiary" means any corporation with respect to which a
specified Person (or a Subsidiary thereof) owns a majority of the
common stock or has the power to vote or direct the voting of
sufficient securities to elect a majority of the directors.
1.47 "Tax" means any national, federal, state, local or foreign income,
gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, windfall profits, environmental,
customs duties, capital stock, franchise, profits, withholding,
social security, unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax of any
kind, including any interest or penalty, whether disputed or not.
1.48 "Tax Return" means any return, declaration, report, claim for
refund or information return or statement relating to Taxes,
including any schedule or attachment thereto, and including any
amendment thereof.
1.49 "Transferred Employees" has the meaning assigned in Section
6.10.1.1.
2. PURCHASE AND SALE OF ASSETS
2.1. Basic Transaction. On and subject to the terms and conditions of
this Agreement, Buyer agrees to purchase from Seller, and Seller
agrees to sell, transfer, convey and deliver to Buyer, free of all
Security Interests, all of the Assets at the Closing, for the
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Alpha Wire Corporation
consideration (including the assumption of the Assumed
Liabilities) specified below in this Article 2.
2.2. Assumption of Liabilities. On and subject to the terms and
conditions of this Agreement, Buyer agrees to assume, pay, honor
and discharge when due and become responsible for all of the
Assumed Liabilities at the Closing.
2.3. Purchase Price. In consideration of the transfer of the Assets,
Buyer shall pay to Seller at Closing $70 million (the "Closing
Payment"). Thereafter, Buyer or Seller (as the case may be )
shall pay the Balance Sheet Payment (as defined in Section 2.5).
The Closing Payment, the Balance Sheet Payment and the Assumed
Liabilities constitute the "Purchase Price".
2.4 Letters of Credit.
2.4.1 At Closing, Seller shall deliver to Buyer the duly issued
Letter of Credit. On or before December 15, 1997, Seller
shall deliver to Buyer a supplemental letter of credit (the
"First Supplemental Letter of Credit") in the same form as
the Letter of Credit (except for the issuing bank, amount,
effective date and expiration date as provided below)
issued by a bank reasonably acceptable to Buyer, which
First Supplemental Letter of Credit shall become effective
upon the expiration of the Letter of Credit, shall expire
two years after the Closing Date and shall be in the face
amount of $5,000,000 less the aggregate amount of all
drawings (if any) by Buyer under the Letter of Credit on or
before the date of delivery of such First Supplemental
Letter of Credit.
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Alpha Wire Corporation
2.4.2 On or before December 15, 1998, Seller shall deliver to
Buyer a supplemental letter of credit (the "Second
Supplemental Letter of Credit") in the same form as the
Letter of Credit (except for the issuing bank, amount,
effective date and expiration date as provided below)
issued by a bank reasonably acceptable to Buyer, which
Second Supplemental Letter of Credit shall become effective
upon the expiration of the First Supplemental Letter of
Credit, shall expire three years after the Closing Date and
shall be in the face amount of $5,000,000 less the
aggregate amount of all drawings (if any) by Buyer under
the Letter of Credit and the First Supplemental Letter of
Credit on or before the date of delivery of such Second
Supplemental Letter of Credit.
2.4.3 On or before December 15, 1999, Seller shall deliver to
Buyer a supplemental letter of credit (the "Third
Supplemental Letter of Credit") if as of December 10, 1999,
Buyer has outstanding any unresolved claims which it has
asserted in good faith against Seller (the "Unresolved
Claims") pursuant to its rights arising under this
Agreement. The Third Supplemental Letter of Credit shall
be in the same form as the Letter of Credit (except for the
issuing bank, amount, effective date and expiration date as
provided below), shall be issued by a bank reasonably
acceptable to Buyer, shall become effective upon the
expiration of the Second Supplemental Letter of Credit and
expire six months thereafter and shall be in the face
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Alpha Wire Corporation
amount of the aggregate outstanding and unresolved amount
of the Unresolved Claims as of December 10, 1999, but in no
event to exceed $5,000,000 less the aggregate amount of all
drawings (if any) by Buyer under the Letter of Credit, the
First Supplemental Letter of Credit and the Second
Supplemental Letter of Credit on or before the date of
delivery of such Third Supplemental Letter of Credit.
Buyer may only make drawings under the Third Supplemental
Letter of Credit with respect to Unresolved Claims, and
only in accordance with such letter of credit.
2.4.4 On or before the tenth business day before the expiration
of the Third Supplemental Letter of Credit and each
Subsequent Letter of Credit, Seller shall deliver to Buyer
a subsequent letter of credit (each a "Subsequent Letter of
Credit") if as of the fifteenth business day before such
expiration date (each a "Determination Date") there are
Unresolved Claims which remain outstanding and unresolved.
Each Subsequent Letter of Credit shall be in the same form
as the Letter of Credit (except for the issuing bank,
amount, effective date and expiration date as provided
below), shall be issued by a bank acceptable to Buyer,
shall become effective upon the expiration of the
immediately preceding Third Supplemental Letter of Credit
or Subsequent Letter of Credit (as the case may be) and
expire six months thereafter, and shall be in the face
amount of the aggregate outstanding and unresolved amount
of the Unresolved Claims as of the immediately preceding
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Alpha Wire Corporation
Determination Date, but in no event to exceed $5,000,000
less the aggregate amount of all drawings by Buyer under
the Letter of Credit, the First Supplemental Letter of
Credit, the Second Supplemental Letter of Credit, the Third
Supplemental Letter of Credit and all Subsequent Letters of
Credit (collectively the "Alpha Letters of Credit") on or
before the date of delivery of such Subsequent Letter of
Credit. Buyer may make drawings under Subsequent Letters
of Credit only with respect to Unresolved Claims, and only
in accordance with the applicable letter of credit.
2.4.5 Buyer has the right to draw on the Alpha Letters of Credit
upon the occurrence of any of the events described in the
four paragraphs of the Draw Certificate attached as
Schedule 2 to the Letter of Credit. Buyer's right to draw
on the Alpha Letters of Credit shall be in addition to
Buyer's other rights under this Agreement, and Buyer shall
have the right to pursue the Seller without prejudicing its
additional right to draw upon such Alpha Letters of Credit.
Without limiting the foregoing, Seller shall pay any
Negative Balance Sheet Adjustment Amount directly to Buyer
without the need for any drawing under the Letter of
Credit.
2.5 Balance Sheet Payment. Within five days following the date on
which the Final Closing Date Net Asset Value is determined
pursuant to Section 2.15, Buyer shall pay to Seller the Positive
Balance Sheet Adjustment Amount or Seller shall pay to Buyer the
Negative Balance Sheet Adjustment Amount, plus interest on the
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Alpha Wire Corporation
amount paid at the rate equal to the average prime interest rate
as shown in The Wall Street Journal for the period from the
Closing Date to the payment date (the "Balance Sheet Payment").
2.6 Determination of Balance Sheet Payment Amount. The Balance Sheet
Payment Amount means the amount by which the Final Closing Date
Net Asset Value, determined pursuant to Section 2.15, is more (a
"Positive Balance Sheet Adjustment Amount") or less (a "Negative
Balance Sheet Adjustment Amount") than $23,721,000, the net asset
value reflected on the Balance Sheet set out on Exhibit 2.6 (the
"Peg Statement of Net Assets"). The Peg Statement of Net Assets
is the net assets of the Business reflected on the June 30, 1996
Balance Sheet adjusted to exclude the Retained Assets, the
Retained Liabilities, the intercompany profit in inventory
elimination amount, any asset relating to payments made in
connection with the TCR Consulting Agreement, any accounts for
employee medical and Alpha Wire Limited Reorganization, accrued
Board of Director fees, and accrued interest on Treasury stock.
2.7 Closing Balance Sheet. Seller shall prepare and deliver to Buyer
on or before the Closing Date, a balance sheet reflecting the
estimated net assets ("Preliminary Closing Date Net Asset Value")
of the Seller on the close of business on the Closing Date (the
"Preliminary Closing Balance Sheet"). The Preliminary Closing
Balance Sheet and Final Closing Balance Sheet shall be prepared in
accordance with the provisions of this Section except that there
shall be no change in the amount allocated to depreciation of any
capital equipment for the period following June 30, 1996 through
the Closing Date. Each Party understands that the objective in
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deriving the Final Closing Balance Sheet is to measure actual
changes in the "net assets" of the Seller for the period between
June 30, 1996 and the Closing Date and, in so doing, the final
adjustment of the Purchase Price for the Assets. The Parties have
agreed that in the event of a conflict or inconsistency between
Sections 2.7.1 and 2.7.2, Section 2.7.2 shall take precedence over
Section 2.7.1.
2.7.1 The Preliminary Closing Balance Sheet and the Final Closing
Balance Sheet shall be prepared in accordance with Seller's
normal accounting principles, practices and procedures
which are the same as or consistent with those employed in
the preparation of the Peg Statement of Net Assets.
2.7.2 Notwithstanding anything to the contrary in Section 2.7.1,
the following specific accounting rules shall control the
preparation of the Preliminary Closing Balance Sheet and
the Final Closing Balance Sheet:
2.7.2.1 The Preliminary Closing Balance Sheet and the
Final Closing Balance Sheet amounts, with respect
to the amount of inventories of the Seller, shall
be based upon a review of Seller's books and
records, including customary cycle counts and
sample counts of all inventories taken through the
close of business on the Closing Date in
accordance with Seller's internal controls and
other accounting principles, practices and
procedures which are the same or consistent with
those employed in the preparation of the Peg
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Statement of Net Assets. In addition a physical
count of all inventories will be taken at or near
the close of business on the Closing Date based on
a statistical sample and in accordance with
procedures set forth on Exhibit 2.7.2.1. Any
shrinkage in excess of 4% (measured in dollars)
will reduce the amount of inventory set forth on
the Preliminary Closing Balance Sheet and the
Final Closing Balance Sheet. No adjustment will
be made for any increase in inventory or for any
shrinkage of 4% or less. With respect to the
Preliminary Closing Balance Sheet and the Final
Closing Balance Sheet, the valuation of inventory
shall be based on the Last-In-First-Out (LIFO)
layering method of accounting consistent with the
procedures used in preparing the audited financial
statements at December 31, 1995.
2.7.2.2 The Preliminary Closing Balance Sheet and the
Final Closing Balance Sheet will not include any
Retained Assets or Retained Liabilities.
2.7.2.3 The reserve for slow moving, excess or obsolete
inventory in the Preliminary Closing Balance Sheet
and the Final Closing Balance Sheet shall be
determined using the normal accounting principles,
practices and procedures which are the same as or
consistent with those employed in the preparation
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of the Peg Statement of Net Assets plus
$1,000,000.
2.7.2.4 The Preliminary Closing Balance Sheet and the
Final Closing Balance Sheet will not include any
intercompany amounts.
2.7.2.5 The Preliminary Closing Balance Sheet and the
Final Closing Balance Sheet will not include any
amounts with respect to intangible assets other
than those costs with respect to the SSA Business
Process Control System which are set out on the
Peg Statement.
2.8. Buyer's Review. Buyer will have 60 days following receipt of the
Preliminary Closing Balance Sheet from Seller to review the
balance sheet and to determine if in Buyer's judgment it has been
prepared in accordance with Section 2.7. If in Buyer's judgment
adjustments are necessary for the Preliminary Closing Balance
Sheet to be so prepared, Buyer, within the 60 day period, shall
notify Seller in writing of its proposed adjustments, including
the amount, nature and basis for the adjustments ("Buyer's
Letter"). Buyer may have its auditors, Ernst & Young, assist it
in reviewing the Preliminary Closing Balance Sheet. Should Seller
not receive Buyer's Letter within the 60 day period, the
Preliminary Closing Balance Sheet prepared by Seller shall be
considered the Final Closing Balance Sheet.
2.9 Seller's Review. Seller will then have 20 days following receipt
of Buyer's proposed adjustments, if any, to review them. Within
the 20-day period, Seller shall notify Buyer in writing of
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Seller's position with respect to each of Buyer's proposed
adjustments ("Seller's Letter"). Should Buyer not receive
Seller's Letter within the 20 day period, the Preliminary Closing
Balance Sheet prepared by Seller as adjusted by Buyer's Letter
shall be considered the Final Closing Balance Sheet.
2.10 Conference. As soon as practicable after the response from Seller
pursuant to Section 2.9, the Parties shall confer and endeavor to
resolve the adjustments, if any, which are in dispute.
2.11 Arbitrator. If the Parties do not confer or are unable to resolve
to their mutual satisfaction all of the proposed adjustments after
a conference to resolve Buyer's proposed adjustments, then within
the 20 days following the delivery of Seller's Letter or the
conference pursuant to Section 2.10, whichever is later, the
Parties shall jointly engage the accounting firm of Price
Waterhouse to act as the arbitrator (the "Arbitrator").
2.12 Scope of Arbitration. If the provisions of Section 2.11 become
operable, then the Arbitrator shall be furnished with a copy of
this Agreement, the Preliminary Closing Balance Sheet, Buyer's
Letter and Seller's Letter. Each Party shall have the right, at
the same time, to submit supporting or explanatory material to the
Arbitrator, and to the other Parties, copies of which shall be
provided to the other Parties. The Arbitrator shall have 45 days
to review this material and such other information as it deems
appropriate. Within the 45-day period, the Arbitrator will
furnish both Parties with its written determination regarding each
unresolved adjustment of Buyer submitted for arbitration.
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2.13 Arbitrator's Decision. The arbitration shall be conducted in
Chicago, Illinois. The Arbitrator shall confine itself only to
unresolved adjustments. The Arbitrator, in reaching a decision,
shall provide a written explanation of its conclusions to each
Party, and its determination shall be conclusive and binding upon
the Parties. The submission of a dispute to the Arbitrator and
the rendering of his decision shall be a condition precedent to
either Party's commencing legal action to pursue any claim arising
under this Article 2. The award or decision of the Arbitrator
shall be deemed final and binding, and may be entered and enforced
in any court of competent jurisdiction. The Parties agree to
submit to the jurisdiction of any such court for the enforcement
of such award or decision. The fee and expenses of the Arbitrator
shall be borne equally by Seller and Buyer. Section 10.6
("Notices") shall apply to all communications made under this
Article 2.
2.14 Access. In preparing and reviewing the Preliminary Closing
Balance Sheet and in conducting the reviews by either Party and
the Arbitrator, each Party will grant the other and the Arbitrator
all reasonable access to the records of the Business and any
workpapers, including auditor workpapers, prepared with respect to
the Preliminary Closing Balance Sheet.
2.15 Final Closing Date Net Asset Value. The Preliminary Closing
Balance Sheet prepared by Seller pursuant to Section 2.7 will be
modified by any adjustments agreed by the Parties pursuant to
Section 2.10 and, if applicable, by the determination of the
Arbitrator pursuant to Section 2.13. The Preliminary Closing
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Balance Sheet after such adjustments will become the Final Closing
Balance Sheet. The net asset value as reflected on Final Closing
Balance Sheet is the "Final Closing Date Net Asset Value".
2.16 Payment. The Closing Payment shall be paid in immediately
available U.S. funds by wire transfer (against transfer of the
Assets) to an account or accounts designated by Seller (to include
direct payments to lenders holding Security Interests in the
Assets in amounts sufficient to discharge such Security Interests
in full), of which Seller shall advise Buyer not later than two
(2) business days prior to the date payment is to be made. The
Balance Sheet Payment shall be paid in immediately available U.S.
funds by wire transfer to Buyer's or Seller's designated account
in accordance with Section 2.5.
2.17 Closing Date. Subject to the fulfillment of the conditions
precedent specified in Article 7, the Closing shall take place at
10:00 a.m., local time, on the later of January 6, 1997 or the
fifth business day following the expiration or early termination
of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 ("HSR Act") ("Closing Date") at the
offices of Belden Inc. in St. Louis, Missouri, or at such other
place, time or date as the Parties may mutually agree. The
Closing shall be effective as of the close of business on that
date.
2.18 Transfer Taxes. With respect to the transfer of the Assets or the
contemplated transactions, Seller will pay (i) any transfer,
conveyance or other similar Taxes, stamps, duties or similar
governmental charges imposed by any taxing jurisdiction, (ii) all
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recording, filing fees or notarial fees and (iii) other similar
costs of Closing. However the Parties agree to bear equally the
fee for filing Buyer's notice pursuant to the HSR Act.
Notwithstanding the preceding sentence, the Buyer will pay any
real estate transfer tax that is payable in connection with the
transfer of the real estate contemplated by this Agreement, but
not to exceed $30,000.
2.19 Deliveries at the Closing. At the Closing, (i) the Seller will
deliver to the Buyer the various certificates, instruments, and
documents referred to in Section 7.1 below; (ii) the Buyer will
deliver to the Seller the various certificates, instruments, and
documents referred to in Section 7.2 below; (iii) the Seller will
execute, acknowledge (if appropriate), and deliver to the Buyer
such other instruments of sale, transfer, conveyance, and
assignment as the Buyer and their counsel reasonably may request;
(iv) the Buyer will execute, acknowledge (if appropriate), and
deliver to the Seller such other instruments of assumption as the
Seller and their counsel reasonably may request; (v) the Buyer
will deliver to the Seller the Closing Payment; and (vi) each
Party will execute and deliver the Ancillary Agreements.
2.20 Allocation. The Parties agree to allocate the Purchase Price
among the Assets for tax purposes in accordance with the
allocation schedule attached as Exhibit 2.20. Such allocation
exhibit shall be prepared, in accordance with Section 1060 of the
Code. The Parties agree to file IRS Form 8594 consistent with the
foregoing.
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3. REPRESENTATIONS AND WARRANTIES OF SELLER.
The Seller represents and warrants to the Buyer that the statements
contained in this Article 3 are correct and complete as of the date of
this Agreement and will be correct and complete as of the Closing Date
(as though made then and as though the Closing Date were substituted
for the date of this Agreement throughout this Article 3), except as
set forth in the disclosure schedule delivered by the Seller to the
Buyer on the date of this Agreement and initialed by the Parties (the
"Disclosure Schedule"). Nothing in the Disclosure Schedule shall be
deemed adequate to disclose an exception to a representation or
warranty made in this Agreement, unless the Disclosure Schedule
identifies the exception with reasonable particularity and describes
the relevant facts in reasonable detail. The Disclosure Schedule will
be arranged in paragraphs corresponding to the numbered paragraphs
contained in this Article 3.
3.1 Organization of the Seller. Seller is a corporation duly
organized, validly existing, and in good standing under the laws
of New Jersey. Section 3.1 of the Disclosure Schedule lists each
of Seller's Subsidiaries and Affiliates.
3.2 Authorization of Transaction. The Seller has full power and
authority to execute and deliver this Agreement and the Ancillary
Agreements, and to perform its obligations hereunder and
thereunder. This Agreement and the Ancillary Agreements
constitute the valid and legally binding obligations of the
Seller, enforceable in accordance with their terms and conditions.
3.3 Noncontravention. Except as set forth in Section 3.3 of the
Disclosure Schedule, neither the execution and the delivery of
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this Agreement and the Ancillary Agreements, nor the consummation
of the transactions contemplated hereby and thereby (including the
assignments and assumptions referred to in Article 2 above), will
(i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to
which the Seller is subject, or charter or bylaws of the Seller
or (ii) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the
right to accelerate, terminate, modify, or cancel, or require any
notice under, any agreement, contract, lease, license, instrument,
or other arrangement to which the Seller is a party or by which it
is bound or to which any of its assets is subject (or result in
the imposition of any Security Interest upon any of its assets),
except where the violation, conflict, breach, default,
acceleration, termination, modification, cancellation, failure to
give notice, or Security Interest would not have a material
adverse effect on the business, financial condition, operations or
results of the Business or on the ability of the Parties to
consummate the transactions contemplated by this Agreement.
Except in regards to the HSR Act and ISRA, the Seller does not
need to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or
governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement (including the
assignments and assumptions referred to in Article 2 above),
except where the failure to give notice, make a filing, or obtain
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authorization, consent or approval would not have a material
adverse effect on the business, financial condition, operations or
results of the Business or on the ability of the Parties to
consummate the transactions contemplated by this Agreement.
3.4 Brokers' Fees. The Seller has no Liability or obligation to pay
any fees or commissions to any broker, finder, or agent retained
by the Seller with respect to the transactions contemplated by
this Agreement for which the Buyer could become liable.
3.5 Assets. The Seller has good and marketable title to all of the
Assets, free and clear of any Security Interest or restriction on
transfer, except for Security Interests listed in Section 3.5 of
the Disclosure Schedule which will be released in full on the
Closing Date. The Assets constitute all of the assets that are
necessary to permit the operation of the Business in substantially
the same manner as such operations are conducted as of the date
hereof.
3.6 Financial Statements. Attached as Schedule 3.6 are the following
financial statements (collectively the "Financial Statements"):
(i) with respect to the Seller, audited consolidated Balance
Sheets, Statements of Operations and Retained Earnings and
Statements of Cash Flows as of and for the years ended December
31, 1993, December 31, 1994 and December 31, 1995; (ii) with
respect to the Seller, unaudited consolidated Balance Sheet,
Statements of Operations and Retained Earnings, and Statements of
Cash Flows as of and for the period ended October 31, 1996; (iii)
with respect to the Business, unaudited Balance Sheets, Statements
of Operations and Retained Earnings, and Statements of Cash Flows
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as of and for the fiscal years ended December 31, 1993, December
31, 1994 and December 31 , 1995 (the "Most Recent Year End"); and
(iv) with respect to the Business, unaudited Balance Sheets,
Statements of Operations and Retained Earnings and Statements of
Cash Flows (the "Most Recent Financial Statements") as of and for
the period ended October 31, 1996 (the "Most Recent Month End").
The Financial Statements (including the notes thereto) have been
prepared in accordance with GAAP applied on a consistent basis
throughout the periods covered thereby, present fairly the
financial condition of the Seller as of such dates and the results
of operations of the Seller for such periods, and are consistent
with the books and records of Seller (which books and records are
correct and complete in all material respects); provided, however,
that the Financial Statements as of and for the period ended
October 31, 1996 are subject to normal year-end adjustments and
lack footnotes.
3.7 Events Subsequent to Most Recent Year End. Since the Most Recent
Year End, there has not been any material adverse change in the
business, financial condition, operations, or results of operation
of the Business. Without limiting the generality of the
foregoing, since that date the Seller has not with respect to the
Business, except as set forth in Section 3.7 of the Disclosure
Schedule:
3.7.1 sold, leased, transferred, or assigned any of its assets,
tangible or intangible, other than for a fair consideration
in the Ordinary Course;
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3.7.2 entered into any agreement, lease, or license (or series of
related agreements, contracts, leases, and licenses) either
involving more than $100,000 or outside the Ordinary
Course;
3.7.3 accelerated, terminated, modified, or cancelled any
agreement, contract, lease, or license (or series of
related agreements, contracts, leases, and licenses), or
any other party to such agreements, contracts, leases or
licenses doing same, involving more than $100,000 to which
Seller is a party or by which Seller is bound;
3.7.4 made any capital expenditure (or series of related capital
expenditures) either involving more than $50,000 or outside
the Ordinary Course;
3.7.5 made any capital investment in, any loan to, or any
acquisition of the securities or assets of, any other
Person (or series of related capital investments, loans,
and acquisitions) either involving more than $50,000 or
outside the Ordinary Course;
3.7.6 issued any note, bond, or other debt security or created,
incurred, assumed, or guaranteed any indebtedness for
borrowed money or capitalized lease obligation either
involving more than $10,000 individually or $20,000 in the
aggregate;
3.7.7 delayed or postponed the payment of accounts payable or
other Liabilities either beyond 45 days from the payment
due date or outside the Ordinary Course;
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3.7.8 cancelled, compromised, waived, or released any right or
claim (or series of related rights and claims) either
involving more than $25,000 or outside the Ordinary Course;
3.7.9 granted any license or sublicense of any rights under or
with respect to any Intellectual Property;
3.7.10 changed or authorized any change in its charter or bylaws;
3.7.11 experienced any damage, destruction, or loss (whether or
not covered by insurance) to its property in excess of
$25,000;
3.7.12 entered into any employment contract or collective
bargaining agreement, written or oral, or modified the
terms of any existing such contract or agreement;
3.7.13 granted any increase in the compensation of any of the
directors, officers, and employees of the Seller outside
the Ordinary Course;
3.7.14 adopted, amended, modified, or terminated any bonus,
profit-sharing, incentive, severance, or other plan,
contract, or commitment for the benefit of any of the
directors, officers, and employees of the Seller or taken
any such action with respect to any other Employee Benefit
Plan except as set forth in Section 3.7.14 to the
Disclosure Schedule;
3.7.15 made any other change in employment terms for any of the
directors, officers, and employees of the Seller outside
the Ordinary Course;
3.7.16 made or pledged to make any charitable or other capital
contribution outside the Ordinary Course; nor
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3.7.17 committed to any of the foregoing.
3.8 Undisclosed Liabilities. To Seller's Knowledge, with respect to
the Business, Seller does not have any material Liability except
for (i) Liabilities set forth on the face of the most recent
balance sheet (including the notes thereof) of the Most Recent
Month End; (ii) Liabilities which have arisen after the Most
Recent Month End in the Ordinary Course (none of which results
from, arises out of, relates to, is in the nature of, or was
caused by any breach of contract, breach of warranty, tort,
infringement, or violation of law) and (iii) Liabilities arising
out of matters disclosed on the Disclosure Schedules.
3.9 Legal Compliance. With respect to the Business, the Seller has
complied with all applicable laws (including rules, regulations,
codes, plans, injunctions, judgments, orders, decrees and rulings)
of federal, state, local, and foreign governments (and all
agencies thereof), and no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, demand, or notice has
been filed or commenced against it alleging any failure so to
comply, except where the failure to comply would not have a
material adverse effect on the business, financial condition,
operations, or results of the Business.
3.10 Tax Matters.
3.10.1 The Seller has filed all Tax Returns that it was
required to file. All Taxes owed by the Seller
(whether or not shown on any Tax Return) have been
paid. There are no Security Interests on any of the
assets of the Seller that arose in connection with any
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failure (or alleged failure) to pay any Tax. The
Seller is not currently the beneficiary of any
extension of time to file any Tax Return.
3.10.2 The Seller has withheld and paid all Taxes required to
have been withheld and paid in connection with amounts
paid or owing to any employee, independent contractor,
creditor, stockholder, or other third party.
3.11 Real Property.
3.11.1 Section 3.11.1 of the Disclosure Schedule lists and
describes briefly all real property that the Seller
owns and that is included in the Assets. With respect
to each such parcel of owned real property, except as
set forth on Section 3.11.1 of the Disclosure
Schedule:
3.11.1.1 Seller has good and marketable title to the
parcel of real property, free and clear of
any Security Interest, easement, covenant, or
other restriction, except for those
easements, covenants or other restrictions
(other than Security Interests) which, to
Seller's Knowledge, are of a general nature
and do not detract in any material manner
from the transfer, insurability, use or value
of the property subject thereto;
3.11.1.2 there are no pending or, to Seller's Knowledge,
threatened condemnation proceedings, lawsuits, or
administrative actions relating to the property,
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or other matters affecting materially and
adversely the current use, occupancy, or value
thereof;
3.11.1.3 the legal description for the parcel contained in
the deed thereof described such parcel fully and
adequately, and, to Seller's Knowledge, except as
may be shown on the survey issued at Closing, the
buildings and improvements are located within the
boundary lines of the described parcels of land,
are not in violation of applicable setback
requirements, zoning laws, and ordinances, and do
not encroach on any easement which may burden the
land;
3.11.1.4 all buildings located on the real property
described in Section 3.11.1 of the Disclosure
Schedule have received all approvals of
governmental authorities (including licenses and
permits) required in connection with the ownership
or operation thereof and have been operated and
maintained in accordance with applicable laws,
rules, and regulations in all material respects.
3.11.1.5 there are no leases, subleases, licenses,
concessions, or other agreements, written or oral,
granting to any party or parties the right of use
or occupancy of any portion of the parcel of real
property;
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3.11.1.6 there are no outstanding options or rights of
first refusal to purchase the parcel of real
property, or any portion thereof or interest
therein; and
3.11.1.7 there are no parties (other than the Seller) in
possession of the parcel of real property.
3.11.2 Section 3.11.2 of the Disclosure Schedule lists and
describes briefly all real property leased or subleased to
the Seller and that is included in the Assets. The Seller
has delivered to the Buyer correct and complete copies of
the leases and subleases listed in Section 3.11.2 of the
Disclosure Schedule. With respect to each lease and
sublease listed in Section 3.11.2 of the Disclosure
Schedule:
3.11.2.1 the lease or sublease is legal, valid, binding,
enforceable, and in full force and effect in all
material respects;
3.11.2.2 to Seller's Knowledge, no party to the lease or
sublease is in breach or default, and no event
has occurred which, with notice or lapse of time,
would constitute a breach or default or permit
termination, modification, or acceleration
thereunder;
3.11.2.3 no party to the lease or sublease has repudiated
any provision thereof;
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3.11.2.4 there are no material disputes, oral agreements,
or forbearance programs in effect as to the lease
or sublease;
3.11.2.5 the Seller has not assigned, transferred,
conveyed, mortgaged, deeded in trust, or
encumbered any interest in the leasehold or
subleasehold; and
3.11.2.6 all facilities leased or subleased thereunder have
received all approvals of governmental authorities
(including material licenses and permits) required
in connection with the operation thereof and have
been operated and maintained in accordance with
applicable laws, rules, and regulations in all
material respects.
3.12 Intellectual Property.
3.12.1 The Seller owns or has the right to use pursuant to
license, sublicense, agreement, or permission all
Intellectual Property (included in the Assets) which
is necessary for the operation of the Business as
presently conducted. Each such item of Intellectual
Property owned or used by the Seller immediately prior
to the Closing hereunder will be owned or available
for use by the Buyer on identical terms and conditions
immediately subsequent to the Closing hereunder.
3.12.2 To Seller's Knowledge, except as set forth on Section
3.12.2 of the Disclosure Schedule, the Seller has not
interfered with, infringed upon or misappropriated any
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Intellectual Property rights of third parties in any
material respect. The Seller has not received any
complaint, claim, demand, or notice alleging any such
interference, infringement, misappropriation, or
violation (including any claim that the Seller must
license or refrain from using any Intellectual
Property rights of any third party). To Seller's
Knowledge, except as set forth on Section 3.12.2 of
the Disclosure Schedule, no third party has interfered
with, infringed upon, misappropriated, or otherwise
come into conflict with any Intellectual Property
rights of the Seller in any material respect.
3.12.3 Section 3.12.3 of the Disclosure Schedule identifies
each patent (including issuing country, number,
current assignee of record, title and issue date),
each trademark and service mark registration
(including issuing country, number, description of
mark, current owner of record, classes of goods or
services, and issue date), each unregistered trademark
and service mark that is material to the operation of
the Business for which no application for registration
is pending (including a description of the mark and
the goods or services with which it is used) and each
copyright registration (including issuing country,
number, title or description of work, current owner of
record and issue date) currently in effect, owned by
the Seller and included in the Assets; identifies each
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pending patent application (including country of
filing, serial number, current owner of record, title
and filing date), application for registration of a
trademark or service mark (including country of
filing, serial number, description of mark, current
owner of record, classes of goods or services, and
filing date), which the Seller has made with respect
to any of its Intellectual Property which is included
in the Assets; and identifies each license, agreement,
or other permission which the Seller has granted to
any third party with respect to any of its owned
Intellectual Property (together with any exceptions)
which is included in the Assets. The Seller has
delivered to the Buyer correct and complete copies of
all such patents, registrations, applications,
licenses, agreements and permissions (as amended to
date). With respect to each item of Intellectual
Property that the Seller owns and which is included in
the Assets, except as otherwise set forth in Section
3.12.3 to the Disclosure Schedule:
3.12.3.1 the Seller possesses all right, title, and
interest in and to the item, free and clear
of any Security Interest, license, or other
restriction;
3.12.3.2 the item is not subject to any outstanding
injunction, judgment, order, decree, or
ruling;
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3.12.3.3 no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or
demand is pending or, to Seller's Knowledge,
is threatened which challenges the legality,
validity, enforceability, use, or ownership
of the item; and
3.12.3.4 the Seller has not agreed to indemnify any
Person for or against any interference,
infringement, misappropriation, or other
conflict with respect to the item.
3.12.4 Section 3.12.4 of the Disclosure Schedule identifies
each item of Intellectual Property, material to the
conduct of the Business, that any third party owns and
that the Seller uses in the Business pursuant to
license, sublicense, agreement, or permission. The
Seller has delivered to the Buyer correct and complete
copies of all such licenses, sublicenses, agreements,
and permissions (as amended to date). With respect to
each item of Intellectual Property required to be
identified in Section 3.12.4 of the Disclosure
Schedule:
3.12.4.1 the license, sublicense, agreement, or
permission covering the item is legal, valid,
binding, enforceable, and in full force and
effect in all material respects;
3.12.4.2 to Seller's Knowledge, no party to the
license, sublicense, agreement, or permission
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is in material breach or default, and no
event has occurred which with notice or lapse
of time would constitute a material breach or
default or permit termination, modification,
or acceleration thereunder; and
3.12.4.3 the Seller has not granted any sublicense or
similar right with respect to the license,
sublicense, agreement, or permission.
3.13 Inventory. The inventory of the Business, net of reserves,
consists of raw materials, work in process, and finished goods,
all of which is saleable in the Ordinary Course, and none of which
is damaged or defective.
3.14 Contracts. Section 3.14 of the Disclosure Schedule lists the
following contracts and agreements to which the Seller is a party
and which relate to the Business:
3.14.1 any agreement (or group of related agreements) for the
lease of personal property to or from any Person
providing for lease payments in excess of $20,000 per
annum;
3.14.2 any agreement (or group of related agreements) for the
purchase or sale of raw materials, commodities,
supplies, products, or other personal property, or for
the furnishing or receipt of services, the performance
of which will extend over a period of more than one
year, result in a material loss to the Seller, or
involve consideration in excess of $50,000;
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3.14.3 any agreement concerning a partnership or joint
venture;
3.14.4 any agreement (or group of related agreements) under
which it has created, incurred, assumed, or guaranteed
any indebtedness for borrowed money, or any
capitalized lease obligation under which it has
imposed a Security Interest on any of its assets,
tangible or intangible;
3.14.5 any agreement outside the Ordinary Course concerning
confidentiality, or any agreement concerning
noncompetition;
3.14.6 any profit sharing, stock option, stock purchase,
stock appreciation, deferred compensation, severance,
or other material plan or arrangement for the benefit
of the current or former directors, officers, and
employees of the Seller;
3.14.7 any collective bargaining agreement;
3.14.8 any agreement for the employment of any individual on
a full-time, part-time, consulting, or other basis;
3.14.9 any agreement under which the consequences of a
default or termination could have a material adverse
effect on the business, financial condition,
operations, or results of operation of the Seller; and
3.14.10 any other agreement (or group of related agreements)
the performance of which involves consideration in
excess of $50,000.
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The Seller has delivered to the Buyer a correct and complete copy
of each written agreement listed in Section 3.14 of the Disclosure
Schedule (as amended to date) and a written summary setting forth
the terms and conditions of each oral agreement referred to in
Section 3.14 of the Disclosure Schedule. With respect to each
such agreement: (i) the agreement is legal, valid, binding,
enforceable, and in full force and effect in all material
respects; (ii) the Seller is not in material breach or default,
and to Seller's Knowledge no other party is in breach or default,
and no event has occurred which with notice or lapse of time would
constitute a material breach or default, or permit termination,
modification, or acceleration, under the agreement; (iii) each
such agreement will continue to be valid, binding, enforceable and
in full force and effect on identical terms following the
consummation of the transactions contemplated hereby (including
the assignments and assumptions referred to in Article 2 above).
3.15 Notes and Accounts Receivable. All notes and accounts receivable
of the Business are reflected properly on its books and records,
are valid receivables, and are subject to no setoffs or
counterclaims and are collectible, subject only to (i) the reserve
for bad debts set forth on the face of the most recent balance
sheet (rather than in any notes thereto) as of the Most Recent
Month End as adjusted for the passage of time through the Closing
Date in accordance with the past custom and practice of the Seller
and (ii) any return or allowance made in the Ordinary Course, the
total of which does not exceed 4.5% of the amount of notes and
accounts receivable shown on the Final Closing Balance Sheet.
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3.16 Insurance. Section 3.16 of the Disclosure Schedule sets forth the
following information with respect to each material insurance
policy (including policies providing property, casualty,
liability, and workers' compensation coverage and bond and surety
arrangements) to which the Seller is a party, a named insured, or
otherwise the beneficiary of coverage and which relate to the
Business:
3.16.1 the name, address, and telephone number of the agent;
3.16.2 the name of the insurer, the name of the policyholder,
and the name of each covered insured;
3.16.3 the policy number and the period of coverage;
3.16.4 the scope (including an indication of whether the
coverage was on a claims made, occurrence, or other
basis) and amount (including a description of how
deductibles and ceilings are calculated and operate)
of coverage; and
3.16.5 a description of any retroactive premium adjustments
or other loss-sharing arrangements.
Section 3.16 of the Disclosure Schedule describes any material
self-insurance arrangements affecting the Seller and which relate
to the Business.
3.17 Litigation. Section 3.17 of the Disclosure Schedule sets forth
each instance in which the Seller (i) is subject to any
outstanding injunction, judgment, order, decree or ruling or (ii)
is a party or, to Seller's Knowledge, is threatened to be made a
party to any action, suit, proceeding, hearing, or investigation
of, in, or before any court or quasi-judicial or administrative
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agency of any federal, state, local, or foreign jurisdiction or
before any arbitrator.
3.18 Product Warranty. Each product manufactured, sold, leased, or
delivered by the Business has been in material conformity with all
applicable commitments and warranties. Section 3.18 of the
Disclosure Schedule includes copies of the standard terms and
conditions of sale or lease for the Business (containing
applicable guaranty, warranty, and indemnity provisions).
3.19 Product Liability. Except as described in Section 3.19 of the
Disclosure Schedule, to Seller's Knowledge, the Seller does not
have any Liability arising out of any injury to individuals or
damage to property as a result of the ownership, possession, or
use of any product manufactured, sold, leased, or delivered by the
Seller and which relates to the Business.
3.20 Employees. To Seller's Knowledge, no executive or key employee of
the Business has notified the Seller that he or she plans to
terminate employment with the Seller during the next twelve
months. As used in the preceding sentence, "key employee" means
any all employees who report directly to Philip Cowen and all
employees who report directly to the direct reports of Philip
Cowen. Except as listed in Section 3.20 of the Disclosure
Schedule, with respect to the Business, the Seller is not a party
to or bound by any collective bargaining agreement, nor has it
experienced any strikes, material grievances, claims of unfair
labor practices, or other collective bargaining disputes within
the past year. To Seller's Knowledge, the Seller has not
committed any material unfair labor practice. To Seller's
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Knowledge, there is not any organizational effort presently being
made or threatened by or on behalf of any labor union with respect
to employees of the Business.
3.21 Employee Benefits.
3.21.1 Section 3.21.1 of the Disclosure Schedule lists each
Employee Benefit Plan that the Seller maintains or to
which the Seller contributes with respect to the
Business.
3.21.1.1 Each such Employee Benefit Plan (and each
related trust, insurance contract, or fund)
complies in form and in operation in all
material respects with the applicable
requirements of ERISA, the Code, and other
applicable laws.
3.21.1.2 All contributions (including all employer
contributions and employee salary reduction
contributions) which are due have been paid
to each such Employee Benefit Plan which is
an employee pension benefit plan and all
contributions for any period ending on or
before the Closing Date which are not yet due
have been paid to each such employee pension
benefit plan or accrued in accordance with
the past custom and practice of the Seller.
All premiums or other payments which are due
for all periods ending on or before the
Closing Date have been paid with respect to
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each such Employee Benefit Plan which is an
employee welfare benefit plan.
3.21.2 The Seller does not maintain, has not maintained, does
not contribute, has not contributed, and has not been
required to contribute, to any employee welfare
benefit plan providing medical, health, or life
insurance or other welfare-type benefits for current
or future retired or terminated employees, their
spouses, or their dependents (other than in accordance
with Code Sec. 4980B or comparable state law).
3.22 Guaranties. Except as listed in Section 3.22 of the Disclosure
Schedule, the Seller is not a guarantor or otherwise is liable for
any Liability or obligation (including indebtedness) of any other
Person. Section 3.22 of the Disclosure Schedule also sets forth
an accurate and complete list showing the name and address of each
bank in which the Business has an account or lockbox, the number
of any such account or lockbox, and the names of all persons
authorized to drawn thereon or have access thereto.
3.23 Environment, Health, and Safety. Except as disclosed in Section
3.23 of the Disclosure Schedule:
3.23.1 The Business conforms in all material respects with
all applicable Environmental Laws, and neither the
real property used by the Business nor any activities,
operations or conditions thereon currently are in
violation, in any material respect, of any applicable
Environmental Law.
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3.23.2 Since January 1, 1991, to Seller's Knowledge, Seller
has timely filed all required reports, obtained all
required approvals, and generated and maintained all
required data, documentation and records with respect
to the Business under applicable Environmental Laws.
3.23.3 Seller has obtained all permits required under
applicable Environmental Laws necessary for the
operation of the Business, and currently is in
material compliance with all terms and conditions of
such environmental permits.
3.23.4 Prior to Seller's acquisition of any ownership or
leasehold interest in the real property it uses, to
Seller's Knowledge, no Regulated Materials were used,
handled, stored or disposed of on, at or beneath such
real property in violation of any applicable
Environmental Law. From and after Seller's
acquisition of its ownership or leasehold interest in
such real property, no Regulated Materials have been
used, handled, stored or disposed of on, at or beneath
the real property in violation in any material respect
of any applicable Environmental Law by Seller or, to
Seller's Knowledge, by any other Person.
3.23.5 No gasoline or other aboveground or underground
storage tank is or was located at the real property
while the real property was owned or leased by Seller,
or to Seller's Knowledge, while the real property was
owned or leased by any other Person.
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3.23.6 Seller has no knowledge of any pending investigation,
claim, action, charge, complaint, demand, suit,
hearing or other proceeding by any governmental
authority having jurisdiction over such matter under
any applicable Environmental Law, or by any other
Person, with respect to the Business or matters
relating thereto. Since January 1, 1991, Seller has
not received written notice of any claim (and to
Seller's Knowledge there exists no such claim) by any
Person alleging the violation of, or any potential
liability under, any applicable Environmental Law with
respect to the Business.
3.23.7 Except in a manner which did not constitute a
violation of any applicable Environmental Laws, to
Seller's Knowledge, neither Seller nor any other
Person has caused or permitted (i) any Regulated
Materials to be generated, stored on, placed, held,
generated or treated, or released, disposed or
discharged from, on, under or at any real property
used by Seller or any part thereof (including any
resulting groundwater contamination), or (ii) the off-
site disposal of Regulated Materials at any other
location.
3.23.8 Seller has no knowledge of any area on the real
property it uses as to its previously being used as a
dump site for any waste materials, whether or not such
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historic disposal activities constituted a violation
of any applicable Environmental Law.
3.23.9 To Seller's Knowledge, the real property used by the
Business does not contain asbestos in any form other
than the asbestos around certain pipes identified in
Seller's report prepared by Whitman and as noted in
Section 3.23.9 of the Disclosure Schedule.
3.23.10 Concurrently with or prior to the date of Seller's
delivery of the Disclosure Schedules, to Seller's
Knowledge, Seller has delivered to Buyer true, correct
and complete copies of all reports, audits,
investigations, correspondence and notices received by
Seller relating to the presence of any Regulated
Materials at the real property used by the Business or
the violation of any applicable Environmental Law by
Seller.
3.24 Certain Business Relationships with Seller. To Seller's
Knowledge, except as set forth on Section 3.24 to the Disclosure
Schedule, no Affiliate or officer, director or employee of the
Seller has been involved in any material business arrangement or
relationship with the Business within the past twelve months, and
no such Affiliate, officer, director or employee owns any material
asset, tangible or intangible, which is used in the Business.
3.25 Tangible Assets. Each tangible Asset is in good operating
condition and repair (subject to normal wear and tear).
3.26 Customers. To Seller's Knowledge, as of the date of this
Agreement, no customer of the Business has notified Seller that it
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intends to stop purchasing products of the Business as a result of
the Seller's completing the transactions contemplated by this
Agreement.
4. REPRESENTATIONS AND WARRANTIES OF BUYER.
The Buyer represents and warrants to the Seller that the statements
contained in this Article 4 are correct and complete as of the date of
this Agreement and will be correct and complete as of the Closing Date
(as though made then and as though the Closing Date were substituted
for the date of this Agreement throughout this Article 4).
4.1 Organization of the Buyer. Buyer is a corporation duly organized,
validly existing, and in good standing under the laws of Delaware.
4.2 Authorization of Transaction. The Buyer has full power and
authority to execute and deliver this Agreement and the Ancillary
Agreements, and to perform its obligations hereunder and
thereunder. This Agreement and the Ancillary Agreements
constitute the valid and legally binding obligations of the Buyer,
enforceable in accordance with their terms and conditions.
4.3 Noncontravention. Neither the execution and the delivery of this
Agreement and the Ancillary Agreements, nor the consummation of
the transactions contemplated hereby and thereby (including the
assignments and assumptions referred to in Article 2 above), will
(i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to
which the Buyer is subject or any provision of the charter or
bylaws of the Buyer or (ii) conflict with, result in a breach of,
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constitute a default under, result in the acceleration of, create
in any party the right to accelerate, terminate, modify, or
cancel, or require any notice under, any agreement, contract,
lease, license, instrument, or other arrangement to which the
Buyer is a party or by which it is bound or to which any of its
assets are subject (or result in the imposition of any Security
Interest upon any of its assets), except where the violation,
conflict, breach, default, acceleration, termination,
modification, cancellation, failure to give notice, or Security
Interest would not have a material adverse effect on the business,
financial condition, operations or results of operation of Buyer
or on the ability of the Parties to consummate the transactions
contemplated by this Agreement. The Buyer does not need to give
any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in
order for the Parties to consummate the transactions contemplated
by this Agreement (including the assignments and assumptions
referred to in Article 2 above), except where the failure to give
notice, make a filing, or obtain authorization, consent or
approval would not have a material adverse effect on the business,
financial condition, operations or results of operation of Buyer
or on the ability of the Parties to consummate the transactions
contemplated by this Agreement.
4.4 Brokers' Fees. The Buyer has no Liability or obligation to pay
any fees or commissions to any broker, finder, or agent retained
by the Buyer with respect to the transactions contemplated by this
Agreement for which the Seller could become liable or obligated.
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5. PRE-CLOSING COVENANTS. The Parties agree as follows with respect to
the period between the execution of this Agreement and the Closing.
5.1 General. Except as otherwise provided, each Party will, acting
diligently and in good faith, use all its reasonable efforts to
take all action and to do all things necessary, proper or
advisable to consummate and make effective the transactions
contemplated by this Agreement (including satisfying the closing
conditions set forth in Article 7 below).
5.2 Notices and Consents.
5.2.1 As soon as practicable after the execution of this
Agreement, the Seller will give any required notices to any
person and will commence to take all reasonable action
required to obtain all consents, authorizations, approvals
and agreements ("Consents") of all persons (including any
authorization or approval required by ISRA) necessary to
authorize, approve, or permit the full and complete grant,
bargain, sale, conveyance, assignment and transfer by the
Seller to the Buyer as contemplated by this Agreement. The
Seller will continue such efforts after the Closing Date,
if required by the Buyer, at no additional cost to the
Buyer. If any Consent is not obtained by the Closing and
the Buyer nevertheless elects to close the transaction
contemplated by this Agreement, the Seller will cooperate
with the Buyer in any reasonable arrangement to provide the
Buyer with the benefits under or with respect to the matter
as to which the relevant Consents were not obtained. Each
Party will file any notification and report forms and
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related material that such Party may be required to file
with any governmental authority (including those required
by the HSR Act), will use its reasonable efforts to obtain
the expiration or early termination of the applicable
waiting period (or any extension thereof) for any required
pre-acquisition notice (including those required by the HSR
Act), and will make any further filings, including the
submission of any additional information or documentary
material, pursuant thereto that may be necessary, proper or
advisable.
5.2.2 Notwithstanding the foregoing, with respect to the HSR Act,
neither the Seller nor Buyer shall be required to:
(i) divest or hold separate any assets including assets of
any Affiliate;
(ii) agree to any limitation on their respective freedom of
action with respect to, or their ability to retain any
of their (or their Affiliate's) other assets or
businesses;
(iii)contest any suit brought or threatened by the U.S.
Federal Trade Commission or the U.S. Department of
Justice or attempt to lift or rescind any injunction
or restraining order obtained by the U.S. Federal
Trade Commission or the U.S. Department of Justice
adversely affecting the ability of the Parties to
consummate the transactions contemplated hereby; or
(iv) provide additional information pursuant to a "second
request" made by the U.S. Federal Trade Commission or
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U.S. Department of Justice in connection with a filing
made by a Party pursuant to the HSR Act.
5.2.3 Each Party shall promptly inform the other of any material
communication from the U.S. Federal Trade Commission, the
U.S. Department of Justice or any other government
authority regarding any of the transactions contemplated
hereby.
5.2.4 Each Party will advise the other promptly in respect of any
understandings, undertakings or agreements (oral or
written) which such Party proposes to make or enter into
with the U.S. Federal Trade Commission, the U.S. Department
of Justice or any other government authority in connection
with the transactions contemplated hereby.
5.3 Operation of Business. The Seller, with respect to the Business,
will not engage in any practice, take any action, embark on any
course of inaction, or enter into any transaction outside the
Ordinary Course. Without limiting the foregoing, the Seller will
not engage in any matter described in Section 3.7 above.
5.4 Preservation of Business. The Seller will use its reasonable best
efforts to keep the Business and Assets intact, including its
present operations, physical facilities, working conditions and
relationships with lessors, licensors, suppliers, customers and
employees.
5.5 Access. After reasonable prior notice delivered by Buyer, the
Seller will permit representatives of the Buyer to have access at
all reasonable times, and in a manner so as not to interfere with
the normal business operations of the Business, to all premises,
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properties, books, records, contracts, Tax records and documents
of or pertaining to the Business in order to conduct any
investigation (including environmental assessments) of the
Business.
5.6 Notice of Developments. The Seller will give prompt written
notice to the Buyer of any material development, of which it
becomes aware, affecting the assets, Liabilities, business,
financial condition, operations or results of operation of the
Business. Each Party will give prompt written notice to the other
of any material development affecting the ability of the Parties
to consummate the transactions contemplated by this Agreement.
Seller shall have the right to revise the Disclosure Schedules
before the Closing Date, subject to the Buyer's right to accept or
reject such revisions pursuant to Section 7.1.11.
5.7 Exclusivity. The Seller will not (and the Seller will not cause
or permit any of its Affiliates to) (i) solicit, initiate or
encourage the submission of any proposal or offer from any Person
relating to any (A) liquidation, dissolution or recapitalization,
(B) merger or consolidation, (C) acquisition or purchase of a
substantial portion of the Assets, or (D) similar transaction or
business combination involving the Business or (ii) participate in
any discussions or negotiations regarding, furnish any information
with respect to, assist or participate in, or facilitate in any
other manner any effort or attempt by any Person to do or seek any
of the foregoing.
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5.8 Bulk Sales or Transfer Laws. The Seller agrees to indemnify the
Buyer from and against any and all Liabilities arising from
Seller's failure to comply with any applicable bulk sales law.
6 POST-CLOSING COVENANTS The Parties agree as follows with respect to
the period following the Closing.
6.1 General. In case at any time after the Closing any further action
is necessary or desirable to carry out the purposes of this
Agreement, each Party will take such further action (including the
execution and delivery of such further instruments and documents)
as the other Party reasonably may request, all at the sole cost
and expense of the requesting Party (unless the requesting Party
is entitled to indemnification therefor under Article 8 below).
The Seller acknowledges and agrees that from and after the Closing
the Buyer will be entitled to possession of all documents, books,
records, agreements and financial data of any sort relating to the
Business (other than information relating to the Retained Assets
or Retained Liabilities).
6.2 Litigation Support. In the event and for so long as any Party
actively is contesting or defending against any charge, complaint,
action, suit, proceeding, hearing, investigation, claim or demand
in connection with (i) any transaction contemplated under this
Agreement or (ii) any fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident,
action, failure to act or transaction on or prior to the Closing
Date involving the Business, the other Party will cooperate with
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him or it and his or its counsel in the contest or defense, make
available its personnel and provide such testimony and access to
its books and records as shall be reasonably necessary in
connection with the contest or defense, 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 8 below).
6.3 Transition. The Seller will refer, and will cause its Affiliates
to refer, all customer inquiries relating to the Business to the
Buyer from and after the Closing.
6.4 Tax Matters. Seller and Buyer shall (i) each provide the other
with such assistance as may reasonably be requested by either of
them in connection with the preparation of any return, audit, or
other examination by any tax authority or judicial or
administrative proceedings relating to liability for Taxes, (ii)
each retain and provide the other with any records or other
information that may be relevant to such return, audit or
examination, proceeding or determination, and (iii) each provide
the other with any final determination of any such audit or
examination, proceeding or determination that affects any amount
required to be shown on any return of the other for any period.
Without limiting the generality of the foregoing, Seller and Buyer
shall retain until the applicable statutes of limitation
(including any extensions) have expired, copies of all returns,
supporting work schedules and other records or information that
may be relevant to such returns for all tax periods or portions
thereof ending before or including the Closing Date and shall not
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destroy or otherwise dispose of any such records without first
providing the other party with a reasonable opportunity to review
and copy the same.
6.5 Confidentiality. The Seller 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 Buyer or destroy,
at the request of the Buyer, 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
to the Business but shall not include information that (i) is
publicly known (other than as a result of Seller's disclosure in
violation of this Agreement), (ii) is disclosed to Seller by a
third party that is not under any duty of confidentiality to
Buyer, or (iii) is developed independently by or on behalf of
Seller after the Closing Date. In the event the Seller 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 Seller will notify the Buyer
promptly of the request or requirement so that the Buyer may seek
an appropriate protective order or waive compliance with the
provisions of this Section 6.5. If, in the absence of a
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protective order or the receipt of a waiver under this Section
6.5, the Seller is, on the advice of counsel, compelled to
disclose any confidential information to any tribunal or else
stand liable for contempt, the Seller may disclose the
confidential information to the tribunal. However, the Seller
shall use its reasonable best efforts to obtain, at the reasonable
request and expense of the Buyer, an order or other assurance that
confidential treatment will be accorded to such portion of the
confidential information required to be disclosed as the Buyer
shall designate. The foregoing provisions shall not apply to any
confidential information which is generally available to the
public immediately prior to the time of disclosure.
6.6 Covenant Not to Compete. The Seller, on behalf of itself and its
Affiliates, in consideration of Buyer's purchase of the Assets and
Buyer's entering into the Supply Agreement (as defined in Section
6.6.4, below) with the Insul-Tab Division of Seller, agrees,
subject to all of the provisions of this Section 6.6, for a period
of three years after the Closing Date not to start up, acquire,
operate or otherwise compete with the Buyer in a business that
develops, markets, distributes or services the products or
services of the Business or any products having specifications
similar to such products in those countries throughout the world
where the products or services of the Business have been sold.
6.6.1 Nothing in this Agreement shall be deemed to restrict or
prohibit Seller or its Affiliates from (i) continuing the
operation of the Cowen Cable Division or the Insul-Tab
Division of Seller, or both, and the business conducted by
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them, including without limitation developing,
manufacturing and marketing the products and services
presently sold by them (as such operations and businesses
are presently conducted which do not include any
distribution function), subject to the provisions set forth
in Section 6.6.2, below, with respect to the XTRA-GUARD
products and in Section 6.6.3, below, with respect to sales
of shrinkable tubing products; or (ii) developing,
manufacturing or marketing electrical and electronic wire
and cable harness assemblies.
6.6.2 Seller, on behalf of itself and its Affiliates, agrees that
for a period of three years after the Closing Date it will
not sell or offer to sell (except to Buyer) any XTRA-GUARD
products and that it will refer all inquires it receives
for such products to Buyer. The term "XTRA-GUARD products"
shall mean products which have been sold or are currently
sold under the trademark XTRA-GUARD or products whose
specifications are substantially the same as or comparable
to those which have been sold or are currently sold under
the trademark XTRA-GUARD.
6.6.3 Seller, on behalf of itself and its Affiliates, agrees that
for a period of three years after the Closing Date, it
shall pay a quarterly royalty to Buyer equal to 5% of the
net sales price received by it or its Affiliates on account
of all sales of shrinkable and non-shrinkable tubing
products by it or its Affiliates to the extent that they
exceed, on a per-customer basis, the level of sales of such
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products made by the Insul-Tab Division over the 12 month
period ending on September 30, 1996 (the "Yearly Base
Line"). Seller shall provide together with each quarterly
payment a report to Buyer of all such sales of shrinkable
and non-shrinkable tubing products within 45 days after the
end of each calendar quarter during the term of the three-
year royalty period, together with a calculation and
payment of the royalty amount due for the sales during the
previous quarter ("Report"), based upon the corresponding
quarter during the Yearly Base Line. During the term of
the three-year royalty period, (i) Seller's independent
auditors will annually test the records of Sellers upon
which the Reports for the previous fiscal year have been
based and report their findings to Buyer and (ii) Buyer
shall have the right, once per year, during normal business
hours and upon reasonable advance notice to Seller, to test
Seller's records and documents pertaining to Seller's sales
of shrinkable and non-shrinkable tubing products. Such
testing shall be conducted by an independent account firm
selected by Buyer and Buyer shall bear the cost of such
test.
6.6.4 Buyer and Seller shall enter into a Supply Agreement for
Buyer's purchase of shrinkable and non-shrinkable tubing
products that are produced by the Insul-Tab Division of
Seller in accordance with the terms and conditions of such
agreement.
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6.6.5 If Seller sells or otherwise transfers, in whole or in
part, the business of its Cowen Cable Division or the
business of its Insul-Tab Division within three years after
the Closing Date, Seller shall cause such buyer or
transferee to concurrently assume Seller's obligations
under Sections 6.6.2 or 6.6.3 (as the case may be) for the
remainder of such three year period.
6.6.6 To insure the greatest likelihood of enforceability of the
covenants set forth in this Section 6.6 the Parties agree
that: (i) the duration, products, services and area for
which the covenant is to be effective are reasonable; (ii)
if any court determines that the time period, products,
services or the area, or all of them, are unreasonable and
that the covenant is to that extent unenforceable, then the
covenant shall remain in full force and effect to the
greatest extent that would not render it unenforceable; and
(iii) the covenant shall be deemed to be a series of
separate covenants, one for each and every country where
the products or services of the Business have been sold.
6.7 Disclosures. Before Closing, no Party, without the prior written
consent of the other Party, will issue any press release or any
similar public announcement concerning the transactions
contemplated by this Agreement. However, if in the opinion of
counsel to any Party (which opinion shall be confirmed in writing
by such counsel and promptly delivered to the other Party before
disclosure), such disclosure is required by law or regulations of
a stock exchange, the Parties will cooperate in preparing a press
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release or releases, and unless the Parties otherwise agrees, such
disclosures shall be limited to the disclosures so required in the
opinion of counsel.
6.8 Environmental Matters. The Buyer shall not assume, and the Seller
shall remain solely responsible for, the following Liabilities
which shall be Retained Liabilities: All Liabilities of any
nature whatsoever whenever arising under or from compliance with
any Environmental Laws, based upon any events occurring or
conditions existing on or before the Closing Date (whether or not
there is a migration or spreading after the Closing Date),
relating in any manner to (i) operations conducted by the Seller,
its Affiliates or predecessors, or (ii) the Assets or any
facilities owned, leased or used by the Seller, its Affiliates or
predecessors (whether or not such facilities are included in the
Assets), whether such Liabilities relate to on-site or to a
location other than such facilities, including without limitation
any liability arising pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Section 9601 et seq. or similar state or local laws.
6.8.1.1 Definitions
6.8.1.1.1 Terms used in this Section 6.8.1 which
are not otherwise defined in this Agreement for which
ISRA or regulations promulgated thereunder provide a
definition shall have the same meaning unless
otherwise designated herein.
6.8.1.1.2 For purposes of this Section 6.8.1, the
following terms shall have the following definitions:
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6.8.1.1.2.1 "Environment" shall mean and refer
to all conditions of soil (surface and subsurface),
geologic strata and formations, streams, rivers, bays,
ponds, impoundment, estuaries, or other surface water,
groundwater, occasional or perched water in or on the
surface or subsurface, marshes and other wetlands,
flood plains, sediments, sludges, air, waste, and all
materials applied to or associated with any physical
improvement or structure, including without
limitation, asbestos, radon, leadpaint, and foam
insulation whose use, removal, or disposal is subject
to any Environmental Law.
6.8.1.1.2.2 "Environmental Authority" shall
mean any federal, state or local governmental
authority, court or tribunal exercising jurisdiction
under Environmental Laws, including without
limitation, the New Jersey Department of Environmental
Protection ("NJDEP") and any successor agency.
6.8.1.1.2.3 "Land Use Covenants and/or Land Use
Restrictions" shall mean those measures (including
institutional and engineering controls) affecting the
title and use of real property, and obligations to
maintain cover and containment structures, and to
monitor and test environmental media and conditions as
prescribed by an Environmental Authority to protect
the public from unsafe exposures to hazardous or toxic
substances and which may be memorialized in documents
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of title to "run with the land" such as described in
the NJDEP document "Declaration of Environmental
Restrictions", and any successor document.
6.8.1.1.2.4 "No Further Action Letter" in
addition it its meaning in ISRA, shall include any No
Further Action Letter.
6.8.1.1.2.5 "Remedial Action Workplan" in
addition to having the same meaning as in ISRA and
NJSA 58: 10B-1, et seq. shall also include, at
Seller's reasonable discretion after consulting with
Buyer, an evaluation of site specific risks, technical
feasibility of alternative response actions, and/or
technical and engineering measures, including
institutional and engineering controls, techniques and
restrictions as Seller may propose in addressing the
environmental conditions of real property, or to
evaluate, mitigate and abate the risks to human health
and the Environment occasioned by the presence of
Hazardous Substances, as such term is defined at NJSA
13:1K-8, in concentrations and under conditions that
require a remedial action under ISRA including the
installation of containment systems, such as soil cap,
and water collection and treatment systems for
groundwater. For purposes of this Section 6.8.1 a
Remedial Action Workplan need not include the
commitment to remove, or dispose of, any such
hazardous or toxic substances as asbestos, lead paint,
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or foam insulation, unless required by the NJDEP.
6.8.1.2 Compliance with ISRA
6.8.1.2.1 In connection with the sale of Assets,
Seller shall either (i) obtain from NJDEP a "Letter of
Non-Applicability" or an equivalent written
determination by NJDEP that the transaction is exempt
from the requirements of ISRA; or (ii) attain
compliance with the requirements of ISRA by obtaining
from NJDEP (x) approval of a proposed "Negative
Declaration", as such term is defined at N.J.S.A.
13:1K-8, (y) a "No Further Action Letter," as such
term is defined at N.J.S.A. 13:1K-8, or (z) an
equivalent final written approval of the
implementation of a "Remedial Action Workplan" which
is satisfactory to NJDEP. Receipt of any of such
approvals or documents from NJDEP along with payment
of all fees and costs together with compliance with
other requirements imposed by NJDEP under ISRA shall
be deemed "ISRA Compliance." As required by NJDEP,
Seller shall obtain and maintain a "Remediation
Funding Source" as such term is defined at N.J.S.A.
58:10B-1 in an amount and form approved by NJDEP.
Seller shall have the sole and exclusive
responsibility to comply at its own cost and expense
with ISRA (including without limitation ISRA
Compliance) in connection with the transaction.
Without limiting the foregoing, Seller shall bear all
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cost and expense of any Remedial Action Workplan both
before and after the Closing. Seller shall diligently
pursue its ISRA Compliance efforts to conclusion.
6.8.1.3 Cooperation. Seller shall keep Buyer fully informed
of its progress in achieving ISRA Compliance by
sending copies of all correspondence and documents
sent by Seller to NJDEP or received by Seller from
NJDEP. As requested and at Seller's expense, the
Buyer shall provide available information to Seller to
allow Seller to meet its obligations under this
Section 6.8.1.
6.8.1.4 Right of Access. If ISRA Compliance is not attained
prior to the Closing and if Buyer agrees to close,
Buyer agrees to grant to Seller, its consultants and
contractors, and NJDEP the right to enter upon all
real property affected by this Section 6.8.1 at all
reasonable times, upon reasonable advance notice, as
required to perform or monitor the work necessary for
Seller to achieve ISRA Compliance.
6.8.1.5 Scope of Remediation and Environmental Restrictions
6.8.1.5.1 Subject to Seller's obligations under
Sections 6.8 and 6.8.1.2.1 (and the indemnity
provisions relating to such Sections), Buyer
acknowledges that in connection with and as a
condition of the concurrence of NJDEP with a Remedial
Action Workplan and/or the issuance of a Negative
Declaration, No Further Action Letter or written
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equivalent document, the use of real property may be
restricted against residential uses only, or
restrictions may be required on the withdrawal or use
of groundwater, or obligations may be imposed on the
real property through the provisions and recordation
of a Declaration of Environmental Restrictions and/or
the creation of a Classification Exception Area for
groundwater.
6.8.1.5.2 If as a requirement or condition of the
concurrence of NJDEP with a Remedial Action Workplan
and/or the issuance of a Negative Declaration, No
Further Action Letter, or written equivalent document,
Land Use Covenants and/or Land Use Restrictions,
including without limitation, engineering and
institutional controls, are required with respect to
real property, Buyer shall accept such Land Use
Covenants and/or Land Use Restrictions and shall
execute and record a Declaration of Environmental
Restrictions and/or accept a Classification Exception
Area designation for groundwater, and otherwise
execute and record all appropriate documents in
connection therewith; subject however, to Seller's
obligations under Sections 6.8 and 6.8.1.2.1 (and the
indemnity provisions relating to such Sections); and
provided further, that the uses allowed under such
covenants, restrictions, and declarations do not
materially adversely affect the utilization of the
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real property for commercial uses.
6.8.1.5.3 Seller's obligations with respect to its
compliance with ISRA under this Section 6.8.1 shall be
deemed terminated and of no further force and effect
after delivery from the NJDEP of the approval of a
Negative Declaration, No Further Action Letter or
written equivalent from NJDEP that the condition of
the Premises, as affected by Land Use Covenants and/or
Land Use Restrictions, or a classification Exception
Area, or any other conditions and/or restrictions
acceptable to NJDEP is satisfactory to NJDEP unless
the negative Declaration or No Further Action Letter
(or written equivalent) is set aside or withdrawn.
The receipt and delivery of a No Further Action Letter
or written equivalent from NJDEP which is conditional
upon satisfactory performance of long term monitoring
and testing activities and maintenance of applicable
Land Use Covenants and/or Land Use Restrictions shall
be deemed to satisfy Seller's obligations to comply
with ISRA under the requirements of this Section 6.8.1
as long as Buyer receives adequate written assurances
of Seller stating that it will timely perform any such
monitoring or testing activities and that it will have
the ability to do so. Notwithstanding the foregoing,
Seller's obligations under Sections 6.8.1 and
6.8.1.2.1 (and the indemnity provisions relating to
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such Sections) shall survive and continue in force and
effect.
6.9 Change of Lockbox Accounts. The Seller shall take such steps as
Buyer may reasonably request to cause Buyer, effective as of the
Closing Date, to be substituted as the sole party having control
over any lockbox to which customers of the Seller make payments,
and to transfer to Buyer, effective as of the Closing Date, the
bank accounts associated with such lockboxes, as well as other
bank accounts specified by Buyer which are disbursement accounts.
6.10 Employees and Employee Benefit Plans.
6.10.1 Employment of Transferred Employees.
6.10.1.1 On the Closing Date, Seller shall make
available for employment, and Buyer shall
offer to employ, all Active Employees. The
Active Employees who accept such offers shall
become "Transferred Employees" as of the
Closing Date. Except for any limitation
imposed by a collective bargaining agreement,
the Parties agree that the employment
relationship between the Transferred
Employees and the Buyer shall be at will,
that it shall be a new employment
relationship and that the Buyer is not
intended to be, and is not, successor to the
Seller in any legal sense with respect to the
employment relationships existing prior to
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the Closing Date between such Transferring
Employees and the Seller.
6.10.1.2 The employment offers referenced in Section
6.10.1.1 above shall be at a wage or salary
level, whichever is applicable, that is
equivalent to the wage or salary level,
whichever is applicable, of each such
employee immediately prior to the Closing
Date. Each such offer of employment to
Active Employees shall also include employee
benefit plans, programs and policies that are
substantially comparable in the aggregate to
the employee benefits of each such employee
immediately prior to the Closing Date (the
"Prior Employee Benefits"), except that
coverage to Transferred Employees shall not
be subject to any waiting period requirement,
exceptions for pre-existing conditions or gap
period requirement in addition to what was
provided by the Prior Employee Benefits.
6.10.1.3 It is understood, however, that the employee
benefit plans included in the offers of
employment for any Transferred Employees of
the Business may not extend beyond (i) a
401(k) plan which is substantially comparable
to the Alpha Wire Corporation 401(k) plan and
(ii) medical insurance, severance, disability
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insurance, life insurance and dental
insurance which are substantially comparable
to those that Seller provides to its Active
Employees of the Business at the date of this
Agreement. It is also understood that
neither Seller nor Buyer will have any
obligation to continue any supplemental
benefit plan, stock options, SARs, profit
sharing arrangement, Rabbi Trust, or other
incentive compensation arrangement Seller may
have with any Active Employee.
6.10.2 Prior Service Credit. For purposes of eligibility,
vesting, and benefits accrual, the Buyer will ensure that
its employee benefit plans for Transferred Employees treat
employment with the Seller prior to the Closing Date the
same as employment with the Buyer after the Closing Date
("Seller's Prior Service Credit"). Seller's Prior Service
Credit for each Transferred Employee is noted on Exhibit
6.10.2.
6.10.3 Certain Retained Liabilities of the Seller.. The Buyer
shall not assume, and the Seller shall remain solely
responsible for, the following Liabilities and obligations
which shall be Retained Liabilities:
6.10.3.1 All Liabilities and obligations of whatever nature
arising out of, asserted by or relating to past,
present or retired employees of the Seller or its
Affiliates who are not Transferred Employees,
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whenever arising, including without limitation (i)
those pertaining to benefits, rights,
entitlements, expense reimbursements, salary,
payroll or other payments, and (ii) those arising
by reason of the transfer or non-transfer of
employees contemplated by this Section 6.10;
6.10.3.2 Except for those liabilities, if any, accrued on
the Final Closing Balance Sheet (but only to the
extent of such accrual) pursuant to Section 1.6.1
above, all Liabilities and obligations of whatever
nature arising out of, asserted by or relating to
Transferred Employees, whenever arising, including
without limitation those pertaining to benefits,
rights, entitlements, expense reimbursements,
salary, payroll or other payments, to the extent
such Liabilities and obligations result from (i)
Buyer's failure to adopt or continue any employee
benefits which were provided by Seller or (ii) an
Occurrence taking place (or relating to a period)
on or before the Closing Date; provided, however,
with respect to the preceding clause (ii) that
with respect to Liabilities resulting from
workplace conditions or exposures which continue
after the Closing Date and for which the initial
claim is asserted after the Closing Date, Seller
shall remain responsible for the proportion of
such Liabilities attributable to periods on or
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prior to the Closing Date and Buyer shall be
responsible for the proportion of such Liabilities
attributable to periods after the Closing Date.
6.10.4 Nonduplication. Nothing in this Section 6.10 shall cause
duplicate contributions or benefits to be paid to or with
respect to any employee.
6.10.5 No Changes. Except in the Ordinary Course pursuant to
Seller's customary merit review policies, without the
Buyer's prior written consent, the Seller shall neither
make nor permit any material change to be made in salaries,
wages, employee benefit plans or other benefits from the
date hereof through the Closing Date.
6.10.6 Certain Reservations of Rights by the Buyer.
6.10.6.1 Nothing herein expressed or implied shall confer
upon any Person (including any Transferred
Employee or any other past or present employees of
the Seller or its Affiliates) other than the
Seller any rights or remedies of any nature or
kind whatsoever, including any right to employment
by the Buyer for any period or under any
particular terms and conditions or any third-party
beneficiary rights hereunder.
6.10.6.2 Nothing herein shall prevent the Buyer at any time
or times after the Closing Date from terminating,
reassigning, promoting or demoting individual
personnel or changing adversely or favorably the
titles, powers, duties, responsibilities,
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functions, locations, salaries, other
compensation, or terms and conditions of
employment of officers and employees of the Buyer.
6.10.6.3 Nothing herein shall restrict in any way the right
of the Buyer at any time or times after the
Closing Date to establish, amend or terminate any
employee benefit plan, arrangement, program,
practice, policy or procedure.
6.11 Discharge of Retained Liabilities. Seller shall discharge
all Retained Liabilities in a timely manner. No disclosure
made by Seller (including any set out in the Disclosure
Schedule) shall limit or modify any Retained Liability or
Seller's obligation to satisfy such Retained Liability.
6.12 Existence and Name. The Seller agrees (i) to maintain its
corporate existence at least until January 15, 2000 and to
notify Buyer (at least 30 days in advance) should it decide
thereafter to dissolve and (ii) to change its name to a
name not confusingly similar to "Alpha" or "Alpha Wire".
7 CONDITIONS TO OBLIGATION TO CLOSE
7.1 Conditions to Obligation of the Buyer. The obligation of the
Buyer to consummate the transactions to be performed by it in
connection with Closing is subject to satisfaction of the
following conditions (or their waiver in writing by the Buyer):
7.1.1 the representations and warranties set forth in Article 3
above shall be true and correct in all material respects at
and as of the Closing Date;
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7.1.2 the Seller shall have performed and complied with all of
its covenants that it must perform prior to the Closing;
7.1.3 the Seller shall have procured all Consents referred to in
Section 5.2 above;
7.1.4 no action, suit or proceeding shall be pending or
threatened before any court or quasi-judicial or
administrative agency of any federal, state, local or
foreign jurisdiction wherein an unfavorable judgment,
order, decree, stipulation, injunction or charge would (i)
prevent consummation of any of the transactions
contemplated by this Agreement, (ii) cause any of the
transactions contemplated by this Agreement to be rescinded
following consummation or (iii) affect adversely the right
of the Buyer to own, operate or control the Assets or the
Business (and no such judgment, order, decree, stipulation,
injunction or charge shall be in effect);
7.1.5 the Seller shall have delivered to the Buyer a certificate
to the effect that each of the conditions specified above
in Sections 7.1.1 through 7.1.4 is satisfied in all
respects;
7.1.6 the Parties shall have received all authorizations,
consents and approvals of governments and governmental
agencies set forth in Exhibit 7.1.6;
7.1.7 the relevant Parties shall have entered into the Ancillary
Agreements in form and substance as set forth in Exhibit
7.1.7 (and with respect to the Supply Agreement, the
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Parties shall have agreed on the pricing provisions and
list of products), and the same shall be in effect;
7.1.8 all actions to be taken by the Seller in connection with
consummation of the contemplated transactions and all
certificates, opinions, instruments and other documents
required to effect the contemplated transactions will be
reasonably satisfactory in form and substance to the Buyer;
7.1.9 on the Closing Date, there shall not exist any damage to or
destruction of any parts of the Business, the restoration
costs of which would exceed $25,000 individually or
$100,000 in the aggregate;
7.1.10 at Buyer's request, the Seller shall have removed and
disposed of any Regulated Materials in storage on any real
property owned or leased by the Seller and used in the
Business, and the Seller shall have provided written
confirmation of such removal and disposal reasonably
satisfactory to the Buyer;
7.1.11 the Buyer in its discretion shall have found acceptable any
revisions of the Disclosure Schedules made by Seller
pursuant to Section 5.6;
7.1.12 the Seller shall have provided written evidence
satisfactory to Buyer of the termination and release of any
Security Interest covering any of the Assets, including
letters from the lenders containing payoff amounts and
reasonable assurance covenants in favor of Buyer.
7.1.13 the Buyer shall have completed its due diligence review and
inspections with respect to (i) environmental, health and
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safety matters, (ii) all improvements to real property
(including storm sewers and sewer pipes), (iii) the
opposition proceedings noted in Section 3.12.2 of the
Disclosure Schedule and (iv) title to real property, and
the results of such review and inspections shall be
acceptable to the Buyer in its sole discretion; and
7.1.14 the Parties, through their designated Affiliates, shall
have entered into an asset purchase agreement for the
purchase by Buyer's designated Affiliate of the U.K. assets
from Seller's Affiliate, Alpha Wire Limited, relating to
the distribution of wire and cable products, the provisions
of which shall be acceptable to Buyer in its sole
discretion but shall, in any event, be substantially the
same as the provisions of this Agreement, except that no
additional Purchase Price shall be payable for such assets.
7.2 Conditions to Obligation of the Seller. The obligation of the
Seller to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the
following conditions (or their waiver in writing by the Seller):
7.2.1 the representations and warranties set forth in Article 4
above shall be true and correct in all material respects at
and as of the Closing Date;
7.2.2 the Buyer shall have performed and complied with all of
their covenants that they must perform prior to the
Closing;
7.2.3 no action, suit or proceedings shall be pending or
threatened before any court or quasi-judicial or
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administrative agency of any federal, state, local or
foreign jurisdiction wherein an unfavorable judgment,
order, decree, stipulation, injunction or charge would (i)
prevent consummation of any of the transactions
contemplated by this Agreement or (ii) cause any of the
transactions contemplated by this Agreement to be rescinded
following consummation (and no such judgment, order,
decree, stipulation, injunction or charge shall be in
effect);
7.2.4 the Buyer shall have delivered to the Seller a certificate
to the effect that each of the conditions specified above
in Sections 7.2.1 through 7.2.3 is satisfied in all
respects;
7.2.5 the Parties shall have received all authorizations,
consents and approvals of governments and governmental
agencies set forth in any attachment hereto;
7.2.6 the relevant Parties shall have entered into the Ancillary
Agreements in form and substance as set forth in Exhibit
7.1.7 (and with respect to the Supply Agreement, the
Parties shall have agreed on the pricing provisions and
list of products), and the same shall be in effect;
7.2.7 all actions to be taken by the Buyer in connection with
consummation of the contemplated transactions and all
certificates, opinions, instruments and other documents
required to effect the contemplated transactions will be
reasonably satisfactory in form and substance to the
Seller;
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7.2.8 the Parties, through their designated Affiliates, shall
have entered into an asset purchase agreement for the
purchase by Buyer's designated Affiliate of the U.K. assets
from Seller's Affiliate, Alpha Wire Limited, relating to
the distribution of wire and cable products, the provisions
of which shall be acceptable to Seller in its sole
discretion but shall, in any event, be substantially the
same as the provisions of this Agreement, except that no
additional Purchase Price shall be payable for such assets.
8 REMEDIES FOR BREACHES OF THIS AGREEMENT
8.1 Survival. All representations, warranties, and covenants of the
Parties contained in this Agreement shall survive the Closing and
continue in effect for the following periods:
8.1.1 Each Party's covenants shall continue forever;
8.1.2 Seller's representations and warranties shall expire as
follows: (i) with respect to Section 3.2 ("Authorization
of Transaction"), 3.5 ("Assets"), 3.21 ("Employee
Benefits"), and 3.23 ("Environment Health & Safety"), three
years after the Closing Date; and (ii) with respect to all
others, two years after the Closing Date.
8.1.3 the Buyer's representations and warranties shall expire
three years after the Closing Date.
Each Party must assert any claim involving a representation,
warranty or covenant against the other Party before expiration of
any applicable survival period. Notwithstanding any contrary
provision, as long as the claim is asserted timely, the claim will
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continue to be valid and assertible even though the survival
period may subsequently expire before the claim is resolved.
8.2 Indemnification Provisions for Benefit of the Buyer. If the
Seller breaches any of its representations, warranties, or
covenants contained in this Agreement (or in any of the Ancillary
Agreements, Schedules or Exhibits referred to herein), then the
Seller agrees to defend, indemnify and save harmless the Buyer,
its Affiliates and its and their directors, officers and
employees ("Buyer's Indemnified Group") from and against the
entirety of any Liability that any of the Buyer's Indemnified
Group may suffer through and after the date of the claim for
indemnification resulting from, arising out of, relating to, in
the nature of, or caused by the breach. The Seller also agrees to
defend, indemnify and save harmless the Buyer's Indemnified Group
from and against the entirety of any Liability that any of the
Buyer's Indemnified Group may suffer through and after the date of
the claim for indemnification resulting from, arising out of,
relating to, or in the nature of any of the Retained Liabilities.
8.3 Indemnification Provisions for Benefit of the Seller. If the
Buyer breaches any of its representations, warranties, or
covenants contained in this Agreement (or in any of the Ancillary
Agreements, Schedules or Exhibits referred to herein), then the
Buyer agrees to defend, indemnify and save harmless the Seller,
its Affiliates and its and their directors, officers and employees
("Seller' Indemnified Group") from and against the entirety of any
liability that any of the Seller' Indemnified Group may suffer
through and after the date of the claim for indemnification
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resulting from, arising out of, relating to, in the nature of, or
caused by the breach.
8.4 Matters Involving Third Parties. If any third party shall notify
any Party (the "Indemnified Party") with respect to any matter
which may give rise to a claim for indemnification against any
other Party (the "Indemnifying Party") under this Section 8, then
the Indemnified Party shall notify the Indemnifying Party thereof
promptly; provided, however, that no delay on the part of the
Indemnified Party in notifying any Indemnifying Party shall
relieve the Indemnifying Party from any liability or obligation
hereunder unless (and then solely to the extent) the Indemnifying
Party thereby is damaged. In the event any Indemnifying Party
notifies the Indemnified Party within 15 days after the
Indemnified Party has given notice of the matter that the
Indemnifying Party is assuming the defense thereof, (i) the
Indemnifying Party will defend the Indemnified Party against the
matter with counsel of its choice reasonably satisfactory to the
Indemnified Party, (ii) the Indemnified Party may retain separate
co-counsel at its sole cost and expense (except that the
Indemnifying Party will be responsible for the fees and expenses
of the separate co-counsel to the extent the Indemnified Party
concludes reasonably that the counsel the Indemnifying Party has
selected has a conflict of interest), (iii) the Indemnified Party
will not consent to the entry of any judgment or enter into any
settlement with respect to the matter without the written consent
of the Indemnifying Party (not to be withheld unreasonably), and
(iv) the Indemnifying Party will not consent to the entry of any
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judgment with respect to the matter, or enter into any settlement
which does not include a provision whereby the plaintiff or
claimant in the matter releases the Indemnified Party from all
Liability with respect thereto, without the written consent of the
Indemnified Party (not to be withheld unreasonably). If the
Indemnifying Party fails to notify the Indemnified Party within 15
days after the Indemnified Party has given notice of the matter
that the Indemnifying Party is assuming the defense thereof, the
Indemnified Party may defend against, or enter into any settlement
with respect to, the matter in any manner it reasonably may deem
appropriate.
8.5 Limitations on Indemnification.
8.5.1 Basket. Notwithstanding any contrary provision in this
Section 8, Buyer shall not make any claim for
indemnification under Section 8.2 for any breach by Seller
of any representation or warranty in Section 3 until the
aggregate amount of all such claims of the Buyer exceeds
$250,000 (the "Basket"), in which event the Buyer's
Indemnified Group shall be entitled to such indemnification
for all amounts, including all amounts forming any part of
the Basket.
8.5.2 Insurance Proceeds and Cap. Notwithstanding any contrary
provision in this Section 8, the Seller's liability under
this Agreement, except as noted below, shall not exceed $14
million (the "Cap"). Notwithstanding the preceding
sentence, the Cap will not apply, and Seller's liability
will not be so limited, with respect to the following:
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(i) Section 6.6 ("Covenant not to Compete");
(ii) Section 6.5 ("Confidentiality");
(iii)Section 6.8 ("Environmental Matters");
(iv) Section 6.10.3 ("Certain Retained Liabilities of the
Seller");
(v) Any of the representations and warranties noted in
Section 8.1.2 (i);
(vi) The Balance Sheet Payment, to the extent payable by
Seller; and
(vii)The indemnity covenant in Section 8.2 insofar as it
relates to any of the representations, warranties or
covenants noted above in subparts (i) - (vi) of this
Section 8.5.2.
Notwithstanding any contrary provision in this Section 8, any
claim asserted by any of the Buyer's Indemnified group or any of
the Seller's Indemnified group, as the case may be, will be
reduced by the amount of any insurance proceeds actually recovered
by the claimant which directly relates to such claim.
8.6 Arbitration. Any claim or dispute arising in connection with
Sections 8.2, 8.3, 8.4 or 8.5 of this Article 8 shall be finally
settled by arbitration under the Commercial Arbitration rules and
the guidelines for Expediting Larger, Complex Commercial
Arbitrations of the American Arbitration Association, and judgment
upon the award rendered by the arbitrators may be entered in any
court having jurisdiction over it, provided each arbitrator, as
required by these procedures, has been appointed and the Parties
have agreed on the procedures to conduct the arbitration
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(including discovery procedures) within 60 days after the Party
requesting arbitration has sent notice of its claim to the other
Party ("Deadline"). If any of such conditions is not met by the
Deadline (unless the failure to do so is beyond the reasonable
control of either Party, in which event the Deadline will be
extended for an additional 30 days), neither Party shall have any
obligation to arbitrate the claim unless they mutually agree to do
so; in such event, each Party may in its sole discretion withhold
its consent. There shall be three arbitrators, all of whom shall
be fully active in their respective occupations and shall conduct
themselves as neutrals, and whose chairman shall be an attorney
experienced in arbitrating large commercial disputes. Each party
shall appoint one arbitrator, and the two arbitrators shall
appoint the third. All arbitrators shall be compensated at their
normal hourly or per diem rates for all time spent by them in
connection with the arbitration proceedings. The arbitration
shall be held in Chicago, Illinois. A preliminary hearing shall
be held. The arbitrators shall actively manage the arbitration to
make it fair, expeditious, economical and less burdensome and
adversarial than litigation, and the award rendered shall not
include punitive damages but shall state its reasoning. Any party
may request a court to provide interim relief without waiving the
agreement to arbitrate.
9 TERMINATION.
9.1 Termination of Agreement. The Parties may terminate this Agreement
as provided below:
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9.1.1 the Parties may terminate this Agreement by mutual written
consent of all the Parties at any time prior to the
Closing;
9.1.2 the Buyer may terminate this Agreement by giving written
notice to the Seller at any time prior to the Closing if
the Seller is in breach, and the Seller may terminate this
Agreement by giving written notice to the Buyer at any time
prior to the Closing if the Buyer is in breach, of any
material representation, warranty, or covenant contained in
this Agreement in any material respect and which breach has
not been cured within ten days after receipt of written
notice of such breach;
9.1.3 the Buyer may terminate this Agreement by giving written
notice to the Seller at any time prior to the Closing if
the Closing shall not have occurred on or before January
31, 1997 by reason of the failure of any condition
precedent under Section 7.1 (unless the failure results
primarily from the Buyer's breaching any representation,
warranty, or covenant contained in this Agreement); or
9.1.4 the Seller may terminate this Agreement by giving written
notice to the Buyer at any time prior to the Closing if the
Closing shall not have occurred on or before January 31,
1997 by reason of the failure of any condition precedent
under Section 7.2 (unless the failure results primarily
from the Seller's breaching any representation, warranty,
or covenant contained in this Agreement).
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10 GENERAL MATTERS
10.1 No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person other than the Parties and
their respective successors and permitted assigns.
10.2 Entire Agreement. This Agreement and the Ancillary Agreements
(including any schedules or attachments that are referenced in
such agreements) constitute the entire agreement among the Parties
and supersedes any prior understandings, agreements, or
representations by or among the Parties, written or oral, that
relate to the subject matter.
10.3 Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties and their respective
successors and permitted assigns. No Party may assign either this
Agreement or any of its rights, interests, or obligations
hereunder without the prior written approval of the other Parties;
provided, however, that the Buyer may (i) assign any of its rights
and interests under this Agreement to one or more of its
Affiliates and (ii) designate one or more of its Affiliates to
perform its obligations hereunder (in any or all of which cases
the Buyer nonetheless shall remain liable and responsible for the
performance of all of its obligations hereunder).
10.4 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of
which together will constitute one and the same instrument.
10.5 Headings. The Article and section headings contained in this
Agreement and in the Schedules are inserted for convenience only
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and shall not affect in any way the meaning or interpretation of
this Agreement.
10.6 Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed given (i) when
actually delivered by hand or mail, (ii) when transmitted by
prepaid cable or telecopier, with confirmation of receipt,
provided that a copy is sent at about the same time by registered
or certified mail, return receipt requested, or (iii) five days
after being sent by Express Mail, Federal Express or other express
delivery service, to the addressee at the following addresses or
telecopier numbers (or to such other address or telecopier number
as a party may specify from time to time by notice hereunder):
If to the Seller: Alpha Wire Corporation
c/o Three Cities Research
24th Floor
New York, NY 10022
Attention: Philip R. Cowen
Telephone: (212) 702-9142
Facsimile: (212) 702-9125
If to the Buyer: Belden Wire & Cable Company
c/o Belden Inc.
7701 Forsyth Boulevard
Suite 800
St. Louis, Missouri 63105
Attention: Secretary
Telephone: 314-854-8000
Facsimile: 314-854-8001
10.7 Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and
signed by the Buyer and the Seller. No waiver by any Party of any
default, misrepresentation, or breach of warranty or covenant
under this Agreement, whether intentional or not, shall be deemed
to extend to any prior or subsequent default, misrepresentation,
or breach of warranty or covenant under this Agreement or affect
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in any way any rights arising by virtue of any prior or subsequent
such occurrence.
10.8 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction
shall not affect the validity or enforceability of the remaining
terms and provisions of this Agreement or the validity or
enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
10.9 Expenses. Each Party will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with
this Agreement or the transactions contemplated by it. The Seller
agrees that except as disclosed in Exhibit 10.9, it has not paid
any amount to any third party, and will not pay any amount to any
third party until after the Closing, with respect to any of its
costs and expenses (including legal fees and expenses) incurred in
connection with this Agreement or the transactions contemplated by
it.
10.10 Construction. The language used in this Agreement will be deemed
to be the language chosen by the Parties to express their mutual
intent, and no rule of strict construction shall be applied
against any Party. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules
and regulations promulgated under them, unless the context
requires otherwise. The Parties intend that each representation,
warranty, and covenant contained in this Agreement shall have
independent significance. If any Party has breached any
representation, warranty, or covenant contained in this Agreement
in any respect, that there exists another representation,
warranty, or covenant relating to the same subject matter
(regardless of the relative levels of specificity) which the Party
has not breached shall not detract from or mitigate that the Party
is in breach of the first representation, warranty, or covenant.
10.11 Incorporation of Schedules. The Schedules identified in this
Agreement are incorporated by reference and made a part of this
Agreement.
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10.12 Specific Performance. Each Party acknowledges and agrees that
the other Parties would be damaged irreparably in the event any of
the provisions of this Agreement are not performed in accordance
with their specific terms or otherwise are breached. Accordingly,
each Party agrees that the other Parties shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of
this Agreement and to enforce specifically this Agreement and the
terms and provisions of it in any action instituted in any court
having jurisdiction over the Parties and the matter, in addition
to any other remedy to which they may be entitled, at law or in
equity.
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10.13 Governing Law. The laws of Illinois shall govern the
interpretation of this Agreement.
11 DISPUTE RESOLUTION
11.1 Settlement Attempt. The Parties agree that, except as provided in
Section 2.11, any claim or dispute between them arising out of or
in connection with this Agreement or any alleged breach of this
Agreement (a "Claim") shall be submitted promptly to an executive
of Seller and Buyer who shall have authority to settle the Claim,
and who shall meet in Chicago, Illinois, within 30 days of such
submission to seek in good faith an amicable settlement. In
seeking an amicable settlement, the Parties may consult with a
neutral third party mediator if both agree in writing. Unless the
Parties agree to the contrary in writing, any advice or decision
of the mediator shall not be binding.
11.2 Litigation. Subject to Section 8.6, any Claim which is not
settled by the Parties within sixty (60) days of notice thereof
first being given by either Party to the other may be pursued by a
Party in any court having subject matter and personal
jurisdiction.
The Parties have executed this Agreement on the date first above
written.
BUYER: BELDEN WIRE & CABLE COMPANY
By:/s/ Kevin L. Bloomfield
Name: Kevin L. Bloomfield
Title: Vice President
SELLER: ALPHA WIRE CORPORATION
By: /s/ Philip R. Cowen
Name: Philip R. Cowen
Title: Chief Executive Officer
<PAGE>
EXHIBIT 2.2
Page 96<PAGE>
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ASSET PURCHASE AGREEMENT / U.K. ASSETS
between
BELDEN U.K. LIMITED
as Buyer
and
ALPHA WIRE LIMITED
as Seller
Dated January 7, 1997
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TABLE OF CONTENTS
Page
1. CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 99
2. PURCHASE AND SALE OF ASSETS. . . . . . . . . . . . . . . . . . . . .107
3. REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . .108
4. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . .130
5. PRE-CLOSING COVENANTS . . . . . . . . . . . . . . . . . . . . . . .132
6. POST-CLOSING COVENANTS . . . . . . . . . . . . . . . . . . . . . . .135
7. CONDITIONS TO OBLIGATION TO CLOSE . . . . . . . . . . . . . . . . .145
8. REMEDIES FOR BREACHES OF THIS AGREEMENT . . . . . . . . . . . . . .149
9. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . .155
10. GENERAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . .156
11. DISPUTE RESOLUTION . . . . . . . . . . . . . . . . . . . . . . . . .159
Page 98 <PAGE>
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ASSET PURCHASE AGREEMENT / U.K. ASSETS
This Asset Purchase Agreement is entered into as of January 7, 1997,
by Belden U.K. Limited, a corporation organized under the laws of Great
Britain, or its designated Affiliate ("Buyer"), and Alpha Wire Limited, a
Delaware corporation ("Seller"). (The Buyer and the Seller may be
individually referred to as a "Party" and collectively as the "Parties").
Belden Wire & Cable Company ("BWC") and Alpha Wire Corporation ("Alpha
Wire") entered into, as of November 21, 1996, an Asset Purchase Agreement
("U.S. A.P.A."), pursuant to which Alpha Wire agreed to transfer certain
assets used by it to design, develop and distribute wire and cable
products. BWC, through its U.K. affiliate, the Buyer, and Alpha Wire,
through its affiliate, the Seller, now want to transfer those assets used
by Alpha Wire and its affiliates in its U.K. operations for the design,
development and distribution of wire and cable products.
Now, the Parties agree as follows:
1. CERTAIN DEFINITIONS
1.1. "Active Employee" means an employee of the Business who on the
Closing Date is either (i) at work or (ii) absent from work solely
because of (a) holiday, (b) vacation, (c) illness or disability
which has prevented, or is expected to prevent, the employee from
working at his or her assigned job for no longer than three months
in total duration (including time before and after the Closing
Date), or (d) leave of absence which has lasted or is expected to
last no longer than three months in total duration (including time
before and after the Closing Date) or which is for military duty.
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1.2 "Affiliate" means any Person that directly or indirectly controls,
is controlled by or is under common control with the named party.
1.3 "Agreement" means this Asset Purchase Agreement.
1.4 "Assets" means all right, title, and interest in and to all of the
assets of the Business, including without limitation all of its
(a) real property, leaseholds, subleases, improvements, fixtures,
fittings, easements, rights-of-way and other appurtenants, (b)
tangible personal property (such as machinery, and all other
equipment, inventories of raw materials and supplies, manufactured
and purchased parts, goods in process and finished goods,
furniture, fixtures, fittings, automobiles, trucks, tractors,
trailers, tools, jigs, and dies), (c) Intellectual Property
(including the right to use the name "Alpha", "Alpha Wire" and any
other name used by Seller in the Business), goodwill associated
therewith, licenses and sublicenses granted and obtained with
respect thereto, and rights thereunder, remedies against
infringements thereof, and rights to protection of interests
therein under the laws of all jurisdictions, (d) non-real property
leases, subleases, and rights thereunder, (e) agreements,
contracts, and rights thereunder, (f) indentures, mortgages,
instruments, Security Interests, guaranties, other similar
arrangements, and rights thereunder, all of which are in favor of
the Seller and none of which involve the Seller as being an
obligor, (g) accounts, notes, and other receivables in favor of
the Seller, (h) securities, (i) claims, deposits, lockboxes,
prepayments, refunds, causes of action, choses in action, rights
of recovery, rights of set off, and rights of recoupment (other
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than any right of refund for the payment of income Taxes), (j)
franchises, approvals, permits, licenses, orders, registrations,
certificates, variances, and similar rights obtained from
governments and governmental agencies, (k) books, records, ledgers
files, documents, correspondence, lists, plats, architectural
plans, drawings, and specifications, creative materials,
advertising and promotional materials, studies, reports, and other
printed or written materials, and (l) all other property, right
and assets of any kind not otherwise described in (a)-(k) above,
whether tangible or intangible, used in or relating to the
Business; provided, however, that the Assets shall not include the
Retained Assets.
1.5 "Assumed Liabilities" means those Liabilities of the Seller with
respect to the Business other than Retained Liabilities incurred
in the Ordinary Course:
1.5.1 that arise after the Closing under contracts entered into
by the Seller which are not reflected on the Final Closing
Balance Sheet of the U.S. A.P.A., but (i) are listed under
Section 3.14 of the Disclosure Schedule as "Contracts Being
Assumed by Buyer"; or (ii) not so listed on Schedule 3.14
but were entered into in the Ordinary Course for the
purchase of goods or services to the Business or for the
sale of wire and cable products by the Business.
1.6 "Business" means the business conducted by the Seller involving
the design, development and distribution of wire and cable
products.
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1.7 "Buyer's Indemnified Group" has the meaning assigned in Section
8.2.
1.8 "Claim" has the meaning assigned in Section 11.1.
1.9 "Closing" means the meeting held on the Closing Date at which the
Parties consummate the contemplated transactions.
1.10 "Closing Date" has the meaning assigned in Section 2.17 of the
U.S. A.P.A.
1.11 "Code" means the Internal Revenue Code of 1986, as amended.
1.12 "Consents" has the meaning assigned in Section 5.2.
1.13 "Disclosure Schedule" has the meaning assigned in Article 3.
1.14 "Employee Benefit Plan" means each employee pension benefit plan
or arrangement, profit sharing plan or savings plan (including any
401(k) plan), each employee welfare benefit plan and each bonus,
incentive compensation, deferred compensation, severance or
similar plan, policy, contract or payroll practice providing
compensation or employee benefits maintained by, on behalf of, or
for the benefit of the Seller or to which the Seller is a
participating employer or is obligated to contribute or has any
legally enforceable liability and under which any employee
participates or has accrued any rights or under which the Seller
is liable in respect of an employee.
1.15 "Environmental Laws" shall include any federal, state or local
law, regulation, rule, standard, order or decree relating to
protection of health, safety or the environment and applicable to
the business or activities of Seller or conditions resulting
therefrom.
1.16 "Indemnified Party" has the meaning assigned in Section 8.4.
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1.17 "Indemnifying Party" has the meaning assigned in Section 8.4.
1.18 "Intellectual Property" means all (i) patents, patent
applications, inventions (whether or not patentable and whether or
not reduced to practice), invention disclosures, and improvements
thereto, (ii) trademarks, service marks, trade dress, logos, trade
names and corporate names and registrations and applications for
registration thereof, (iii) copyrights and registrations and
applications for registration thereof, (iv) mask works and
registrations and applications for registration thereof, (v)
computer software, data and documentation, (vi) trade secrets and
confidential information and (vii) copies and tangible embodiments
of any of the foregoing (in whatever form or medium).
1.19 "Liability" means any liability (whether known or unknown, whether
absolute or contingent, whether liquidated or unliquidated, and
whether due or to become due), including any liability for Taxes,
any damage or loss of any kind (including consequential, special,
punitive, and incidental), any judgment, settlement, expense or
cost (including those relating to any investigation or any defense
or prosecution of any proceedings), and any reasonable fees and
expenses of attorneys, accountants, experts and other consultants.
1.20 "Occurrence" means an event, incident, accident, or condition,
including without any limitation which results from an act or
omission (including without limitation the sale of products and
continuous or repeated exposure to conditions which result in
bodily injury, death or damage of any kind).
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1.21 "Ordinary Course" means the ordinary course of business of Seller
consistent with past custom and practice (including with respect
to quantity, quality and frequency).
1.22 "Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization, or any other form of
business or legal entity or government authority.
1.23 "Regulated Materials" includes any chemical, pollutant,
contaminant, condition, petroleum or petroleum products, hazardous
or toxic substance, and any other substance, material or waste
defined as such or subject to regulation in any manner whatsoever
under any Environmental Law.
1.24 "Retained Assets" means all right, title and interest in and to
(i) cash and cash equivalents (including any "over draft"
accounts) outstanding on the Closing Date, (ii) repayment
obligations outstanding on the Closing Date arising from loans
made prior to the date hereof to shareholders, directors,
officers, employees or other related parties, (iii) all Regulated
Materials in, on, under or relating to any of the foregoing or any
of the Assets except to the extent currently used by Seller in the
conduct of the Business in the Ordinary Course and in accordance
with Environmental Laws, (iv) intercompany amounts to the extent
those amounts relate to investments in or permanent advances to
the Cowen Cable Division or Insul-Tab Division of Seller or to any
other Affiliates of Seller, (v) any life insurance policies for
any shareholder of Seller (including the cash surrender value of
such policies and any receivables for premiums in excess of the
cash surrender value of such policies), (vi) to the extent not
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used in the Business, the assets of Seller's other operations, and
(vii) the items listed on Exhibit 1.24.
1.25 "Retained Liabilities" means (i) all Liabilities relating to the
borrowing of money (including any related interest or deferred
loan costs), (ii) all Liabilities arising out of any of the
Retained Assets, whenever so arising, (iii) all Liabilities
retained by the Seller pursuant to Section 6.8 hereof, (iv) all
Liabilities retained by the Seller pursuant to Section 6.10.3
hereof, (v) all Liabilities for income Taxes, (vi) all
Liabilities of the Seller for Taxes arising from the consummation
of the transactions contemplated by this Agreement; (vii) all
Liabilities of the Seller to indemnify any Person (including the
Seller or its stockholders) by reason of the fact that such Person
is or was a director, officer, employee or agent of the Seller,
its Affiliates or its predecessors; (viii) all Liabilities of the
Seller for the costs and expenses incurred in connection with this
Agreement; (ix) all Liabilities of Seller resulting from or
relating to the borrowing of money, breach of contract, tort,
infringement or violation of law; (x) all Liabilities of Seller
with respect to its or its predecessors' acquisition of any of the
assets or capital stock of any Person; (xii) all Liabilities of
Seller under this Agreement (xiii) all Liabilities listed on
Exhibit 1.25; (xiv) all Liabilities of Seller with respect to its
other operations; and (xv) all other Liabilities (whenever
arising) of the Seller, its Affiliates, their predecessors or
otherwise relating to the Business arising from or relating to any
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Occurrence or period on or before the Closing Date, except for any
Assumed Liabilities.
1.26 "Security Interest" means any mortgage, pledge, security interest,
encumbrance, charge or other lien.
1.27 "Seller's Indemnified Group" has the meaning assigned in Section
8.3.
1.28 "Seller's Knowledge" or similar terms mean the knowledge after
reasonable investigation (including after consulting with
employees of the Seller with responsibility for the subject
matter) of (i) the officers and directors of the Seller, and (ii)
the following individuals: Philip Cowen, Charles Wiggins, and with
respect to Section 3.21, Christine Birkner and with respect to
Section 3.23, Frank Steigerwalt.
1.29 "Subsidiary" means any corporation with respect to which a
specified Person (or a Subsidiary thereof) owns a majority of the
common stock or has the power to vote or direct the voting of
sufficient securities to elect a majority of the directors.
1.30 "Tax" means any national, federal, state, local or foreign income,
gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, windfall profits, environmental,
customs duties, capital stock, franchise, profits, withholding,
social security, unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax of any
kind, including any interest or penalty, whether disputed or not.
1.31 "Tax Return" means any return, declaration, report, claim for
refund or information return or statement relating to Taxes,
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including any schedule or attachment thereto, and including any
amendment thereof.
1.32 "Transferred Employees" has the meaning assigned in Section
6.10.1.1.
2. PURCHASE AND SALE OF ASSETS
2.1. Basic Transaction. On and subject to the terms and conditions of
this Agreement, Buyer agrees to purchase from Seller, and Seller
agrees to sell, transfer, convey and deliver to Buyer, free of all
Security Interests, all of the Assets at the Closing, solely in
exchange for Buyer's assumption of the Assumed Liabilities.
2.2 Transfer Taxes. With respect to the transfer of the Assets or the
contemplated transactions, Seller will pay (i) any transfer,
conveyance or other similar Taxes, stamps, duties or similar
governmental charges imposed by any taxing jurisdiction, (ii) all
recording, filing fees or notarial fees and (iii) other similar
costs of Closing.
2.3 Deliveries at the Closing. At the Closing, (i) the Seller will
deliver to the Buyer the various certificates, instruments, and
documents referred to in Section 7.1 below; (ii) the Buyer will
deliver to the Seller the various certificates, instruments, and
documents referred to in Section 7.2 below; (iii) the Seller will
execute, acknowledge (if appropriate), and deliver to the Buyer
such other instruments of sale, transfer, conveyance, and
assignment as the Buyer and their counsel reasonably may request;
(iv) the Buyer will execute, acknowledge (if appropriate), and
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deliver to the Seller such other instruments of assumption as the
Seller and their counsel reasonably may request; (v) the Buyer
will deliver to the Seller the Closing Payment; and (vi) each
Party will execute and deliver the Ancillary Agreements.
2.4 Allocation. The Parties agree to allocate the Purchase Price
among the Assets for tax purposes in accordance with the
allocation schedule attached as Exhibit 2.20.
3. REPRESENTATIONS AND WARRANTIES OF SELLER.
The Seller represents and warrants to the Buyer that the statements
contained in this Article 3 are correct and complete as of the date of
this Agreement and will be correct and complete as of the Closing Date
(as though made then and as though the Closing Date were substituted
for the date of this Agreement throughout this Article 3), except as
set forth in the disclosure schedule delivered by the Seller to the
Buyer on the date of this Agreement and initialed by the Parties (the
"Disclosure Schedule"). Nothing in the Disclosure Schedule shall be
deemed adequate to disclose an exception to a representation or
warranty made in this Agreement, unless the Disclosure Schedule
identifies the exception with reasonable particularity and describes
the relevant facts in reasonable detail. The Disclosure Schedule will
be arranged in paragraphs corresponding to the numbered paragraphs
contained in this Article 3.
3.1 Organization of the Seller. Seller is a corporation duly
organized, validly existing, and in good standing under the laws
of Delaware. Section 3.1 of the Disclosure Schedule lists each of
Seller's Subsidiaries and Affiliates.
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3.2 Authorization of Transaction. The Seller has full power and
authority to execute and deliver this Agreement and the Ancillary
Agreements, and to perform its obligations hereunder and
thereunder. This Agreement and the Ancillary Agreements
constitute the valid and legally binding obligations of the
Seller, enforceable in accordance with their terms and conditions.
3.3 Noncontravention. Except as set forth in Section 3.3 of the
Disclosure Schedule, neither the execution and the delivery of
this Agreement and the Ancillary Agreements, nor the consummation
of the transactions contemplated hereby and thereby (including the
assignments and assumptions referred to in Article 2 above), will
(i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to
which the Seller is subject, or charter or bylaws of the Seller
or (ii) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the
right to accelerate, terminate, modify, or cancel, or require any
notice under, any agreement, contract, lease, license, instrument,
or other arrangement to which the Seller is a party or by which it
is bound or to which any of its assets is subject (or result in
the imposition of any Security Interest upon any of its assets),
except where the violation, conflict, breach, default,
acceleration, termination, modification, cancellation, failure to
give notice, or Security Interest would not have a material
adverse effect on the business, financial condition, operations or
results of the Business or on the ability of the Parties to
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consummate the transactions contemplated by this Agreement.
Except in regards to the HSR Act and ISRA, the Seller does not
need to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or
governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement (including the
assignments and assumptions referred to in Article 2 above),
except where the failure to give notice, make a filing, or obtain
authorization, consent or approval would not have a material
adverse effect on the business, financial condition, operations or
results of the Business or on the ability of the Parties to
consummate the transactions contemplated by this Agreement.
3.4 Brokers' Fees. The Seller has no Liability or obligation to pay
any fees or commissions to any broker, finder, or agent retained
by the Seller with respect to the transactions contemplated by
this Agreement for which the Buyer could become liable.
3.5 Assets. The Seller has good and marketable title to all of the
Assets, free and clear of any Security Interest or restriction on
transfer, except for Security Interests listed in Section 3.5 of
the Disclosure Schedule which will be released in full on the
Closing Date. The Assets constitute all of the assets that are
necessary to permit the operation of the Business in substantially
the same manner as such operations are conducted as of the date
hereof.
3.6 Financial Statements. Attached as Section 3.6 of the Disclosure
Schedule are the following financial statements (collectively the
"financial statements") with respect to Alpha Wire Limited: (i)
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audited Financial Statements for the fiscal years ended December
31, 1993, December 31, 1994 and December 31, 1995 prepared for
statutory reporting purposes; (ii) unaudited balance sheets,
income statements and statements of cash flows as of and for the
fiscal years ended December 31, 1993, December 31, 1994 and
December 31, 1995; and (iii) unaudited balance sheet, income
statement and statement of cash flows as of and for the period
ended October 31, 1996. The Financial Statements (including the
notes thereto) have been prepared in accordance with GAAP (U.K.
GAAP for the audited statutory Financial Statements and U.S. GAAP
for the unaudited Financial Statements) applied on a consistent
basis throughout the periods covered thereby, present fairly the
financial condition of Alpha Wire Limited as of such dates and the
result of operations of the Alpha Wire Limited for such periods,
and are consistent with the books and records of Seller; provided,
however that the Financial Statements as of and for the period
ended October 31, 1996 are subject to normal year-end adjustments
and lack footnotes.
3.7 Events Subsequent to Most Recent Year End. Since the Most Recent
Year End, there has not been any material adverse change in the
business, financial condition, operations, or results of operation
of the Business. Without limiting the generality of the
foregoing, since that date the Seller has not with respect to the
Business, except as set forth in Section 3.7 of the Disclosure
Schedule:
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3.7.1 sold, leased, transferred, or assigned any of its assets,
tangible or intangible, other than for a fair consideration
in the Ordinary Course;
3.7.2 entered into any agreement, lease, or license (or series of
related agreements, contracts, leases, and licenses) either
involving more than $10,000 or outside the Ordinary Course;
3.7.3 accelerated, terminated, modified, or cancelled any
agreement, contract, lease, or license (or series of
related agreements, contracts, leases, and licenses), or
any other party to such agreements, contracts, leases or
licenses doing same, involving more than $10,000 to which
Seller is a party or by which Seller is bound;
3.7.4 made any capital expenditure (or series of related capital
expenditures) either involving more than $1,000 or outside
the Ordinary Course;
3.7.5 made any capital investment in, any loan to, or any
acquisition of the securities or assets of, any other
Person (or series of related capital investments, loans,
and acquisitions) either involving more than $1,000 or
outside the Ordinary Course;
3.7.6 issued any note, bond, or other debt security or created,
incurred, assumed, or guaranteed any indebtedness for
borrowed money or capitalized lease obligation either
involving more than $1,000 individually or $2,000 in the
aggregate;
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3.7.7 delayed or postponed the payment of accounts payable or
other Liabilities either beyond 45 days from the payment
due date or outside the Ordinary Course;
3.7.8 cancelled, compromised, waived, or released any right or
claim (or series of related rights and claims) either
involving more than $5,000 or outside the Ordinary Course;
3.7.9 granted any license or sublicense of any rights under or
with respect to any Intellectual Property;
3.7.10 changed or authorized any change in its charter or bylaws;
3.7.11 experienced any damage, destruction, or loss (whether or
not covered by insurance) to its property in excess of
$5,000;
3.7.12 entered into any employment contract or collective
bargaining agreement, written or oral, or modified the
terms of any existing such contract or agreement;
3.7.13 granted any increase in the compensation of any of the
directors, officers, and employees of the Seller outside
the Ordinary Course;
3.7.14 adopted, amended, modified, or terminated any bonus,
profit-sharing, incentive, severance, or other plan,
contract, or commitment for the benefit of any of the
directors, officers, and employees of the Seller or taken
any such action with respect to any other Employee Benefit
Plan except as set forth in Section 3.7.14 to the
Disclosure Schedule;
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3.7.15 made any other change in employment terms for any of the
directors, officers, and employees of the Seller outside
the Ordinary Course;
3.7.16 made or pledged to make any charitable or other capital
contribution outside the Ordinary Course; nor
3.7.17 committed to any of the foregoing.
3.8 Undisclosed Liabilities. To Seller's Knowledge, with respect to
the Business, Seller does not have any material Liability except
for (i) Liabilities set forth on the face of the most recent
balance sheet (including the notes thereof) of the Most Recent
Month End as set out in the U.S. A.P.A.; (ii) Liabilities which
have arisen after the Most Recent Month End in the Ordinary Course
as set out in the U.S. A.P.A. (none of which results from, arises
out of, relates to, is in the nature of, or was caused by any
breach of contract, breach of warranty, tort, infringement, or
violation of law) and (iii) Liabilities arising out of matters
disclosed on the Disclosure Schedules.
3.9 Legal Compliance. With respect to the Business, the Seller has
complied with all applicable laws (including rules, regulations,
codes, plans, injunctions, judgments, orders, decrees and rulings)
of federal, state, local, and foreign governments (and all
agencies thereof), and no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, demand, or notice has
been filed or commenced against it alleging any failure so to
comply, except where the failure to comply would not have a
material adverse effect on the business, financial condition,
operations, or results of the Business.
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3.10 Tax Matters.
3.10.1 The Seller has filed all Tax Returns that it was
required to file. All Taxes owed by the Seller
(whether or not shown on any Tax Return) have been
paid. There are no Security Interests on any of the
assets of the Seller that arose in connection with any
failure (or alleged failure) to pay any Tax. The
Seller is not currently the beneficiary of any
extension of time to file any Tax Return.
3.10.2 The Seller has withheld and paid all Taxes required to
have been withheld and paid in connection with amounts
paid or owing to any employee, independent contractor,
creditor, stockholder, or other third party.
3.11 Real Property.
3.11.1 The Seller does not own any real property.
3.11.2 Section 3.11.2 of the Disclosure Schedule lists and
describes briefly all real property leased or
subleased to the Seller and that is included in the
Assets. The Seller has delivered to the Buyer correct
and complete copies of the leases and subleases listed
in Section 3.11.2 of the Disclosure Schedule. With
respect to each lease and sublease listed in Section
3.11.2 of the Disclosure Schedule:
3.11.2.1 the lease or sublease is legal, valid,
binding, enforceable, and in full force and
effect in all material respects;
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3.11.2.2 to Seller's Knowledge, no party to the lease
or sublease is in breach or default, and no
event has occurred which, with notice or
lapse of time, would constitute a breach or
default or permit termination, modification,
or acceleration thereunder;
3.11.2.3 no party to the lease or sublease has
repudiated any provision thereof;
3.11.2.4 there are no material disputes, oral
agreements, or forbearance programs in effect
as to the lease or sublease;
3.11.2.5 the Seller has not assigned, transferred,
conveyed, mortgaged, deeded in trust, or
encumbered any interest in the leasehold or
subleasehold; and
3.11.2.6 all facilities leased or subleased thereunder
have received all approvals of governmental
authorities (including material licenses and
permits) required in connection with the
operation thereof and have been operated and
maintained in accordance with applicable
laws, rules, and regulations in all material
respects.
3.12 Intellectual Property.
3.12.1 The Seller owns or has the right to use pursuant to
license, sublicense, agreement, or permission all
Intellectual Property (included in the Assets) which
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is necessary for the operation of the Business as
presently conducted. Each such item of Intellectual
Property owned or used by the Seller immediately prior
to the Closing hereunder will be owned or available
for use by the Buyer on identical terms and conditions
immediately subsequent to the Closing hereunder.
3.12.2 To Seller's Knowledge, except as set forth on Section
3.12.2 of the Disclosure Schedule, the Seller has not
interfered with, infringed upon or misappropriated any
Intellectual Property rights of third parties in any
material respect. The Seller has not received any
complaint, claim, demand, or notice alleging any such
interference, infringement, misappropriation, or
violation (including any claim that the Seller must
license or refrain from using any Intellectual
Property rights of any third party). To Seller's
Knowledge, except as set forth on Section 3.12.2 of
the Disclosure Schedule, no third party has interfered
with, infringed upon, misappropriated, or otherwise
come into conflict with any Intellectual Property
rights of the Seller in any material respect.
3.12.3 Section 3.12.3 of the Disclosure Schedule identifies
each patent (including issuing country, number,
current assignee of record, title and issue date),
each trademark and service mark registration
(including issuing country, number, description of
mark, current owner of record, classes of goods or
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services, and issue date), each unregistered trademark
and service mark that is material to the operation of
the Business for which no application for registration
is pending (including a description of the mark and
the goods or services with which it is used) and each
copyright registration (including issuing country,
number, title or description of work, current owner of
record and issue date) currently in effect, owned by
the Seller and included in the Assets; identifies each
pending patent application (including country of
filing, serial number, current owner of record, title
and filing date), application for registration of a
trademark or service mark (including country of
filing, serial number, description of mark, current
owner of record, classes of goods or services, and
filing date), which the Seller has made with respect
to any of its Intellectual Property which is included
in the Assets; and identifies each license, agreement,
or other permission which the Seller has granted to
any third party with respect to any of its owned
Intellectual Property (together with any exceptions)
which is included in the Assets. The Seller has
delivered to the Buyer correct and complete copies of
all such patents, registrations, applications,
licenses, agreements and permissions (as amended to
date). With respect to each item of Intellectual
Property that the Seller owns and which is included in
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the Assets, except as otherwise set forth in Section
3.12.3 to the Disclosure Schedule:
3.12.3.1 the Seller possesses all right, title, and
interest in and to the item, free and clear
of any Security Interest, license, or other
restriction;
3.12.3.2 the item is not subject to any outstanding
injunction, judgment, order, decree, or
ruling;
3.12.3.3 no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or
demand is pending or, to Seller's Knowledge,
is threatened which challenges the legality,
validity, enforceability, use, or ownership
of the item; and
3.12.3.4 the Seller has not agreed to indemnify any
Person for or against any interference,
infringement, misappropriation, or other
conflict with respect to the item.
3.12.4 Section 3.12.4 of the Disclosure Schedule identifies
each item of Intellectual Property, material to the
conduct of the Business, that any third party owns and
that the Seller uses in the Business pursuant to
license, sublicense, agreement, or permission. The
Seller has delivered to the Buyer correct and complete
copies of all such licenses, sublicenses, agreements,
and permissions (as amended to date). With respect to
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each item of Intellectual Property required to be
identified in Section 3.12.4 of the Disclosure
Schedule:
3.12.4.1 the license, sublicense, agreement, or
permission covering the item is legal, valid,
binding, enforceable, and in full force and
effect in all material respects;
3.12.4.2 to Seller's Knowledge, no party to the
license, sublicense, agreement, or permission
is in material breach or default, and no
event has occurred which with notice or lapse
of time would constitute a material breach or
default or permit termination, modification,
or acceleration thereunder; and
3.12.4.3 the Seller has not granted any sublicense or
similar right with respect to the license,
sublicense, agreement, or permission.
3.13 Inventory. The inventory of the Business, net of reserves,
consists of raw materials, work in process, and finished goods,
all of which is saleable in the Ordinary Course, and none of which
is damaged or defective.
3.14 Contracts. Section 3.14 of the Disclosure Schedule lists the
following contracts and agreements to which the Seller is a party
and which relate to the Business:
3.14.1 any agreement (or group of related agreements) for the
lease of personal property to or from any Person
providing for lease payments in excess of $1,000 per
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annum;
3.14.2 any agreement (or group of related agreements) for the
purchase or sale of raw materials, commodities,
supplies, products, or other personal property, or for
the furnishing or receipt of services, the performance
of which will extend over a period of more than one
year, result in a material loss to the Seller, or
involve consideration in excess of $5,000;
3.14.3 any agreement concerning a partnership or joint
venture;
3.14.4 any agreement (or group of related agreements) under
which it has created, incurred, assumed, or guaranteed
any indebtedness for borrowed money, or any
capitalized lease obligation under which it has
imposed a Security Interest on any of its assets,
tangible or intangible;
3.14.5 any agreement outside the Ordinary Course concerning
confidentiality, or any agreement concerning
noncompetition;
3.14.6 any profit sharing, stock option, stock purchase,
stock appreciation, deferred compensation, severance,
or other material plan or arrangement for the benefit
of the current or former directors, officers, and
employees of the Seller;
3.14.7 any collective bargaining agreement;
3.14.8 any agreement for the employment of any individual on
a full-time, part-time, consulting, or other basis;
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3.14.9 any agreement under which the consequences of a
default or termination could have a material adverse
effect on the business, financial condition,
operations, or results of operation of the Seller; and
3.14.10 any other agreement (or group of related agreements)
the performance of which involves consideration in
excess of $5,000.
The Seller has delivered to the Buyer a correct and complete copy
of each written agreement listed in Section 3.14 of the Disclosure
Schedule (as amended to date) and a written summary setting forth
the terms and conditions of each oral agreement referred to in
Section 3.14 of the Disclosure Schedule. With respect to each
such agreement: (i) the agreement is legal, valid, binding,
enforceable, and in full force and effect in all material
respects; (ii) the Seller is not in material breach or default,
and to Seller's Knowledge no other party is in breach or default,
and no event has occurred which with notice or lapse of time would
constitute a material breach or default, or permit termination,
modification, or acceleration, under the agreement; (iii) each
such agreement will continue to be valid, binding, enforceable and
in full force and effect on identical terms following the
consummation of the transactions contemplated hereby (including
the assignments and assumptions referred to in Article 2 above).
3.15 Notes and Accounts Receivable. All notes and accounts receivable
of the Business are reflected properly on its books and records,
are valid receivables, and are subject to no setoffs or
counterclaims and are collectible, subject only to (i) the reserve
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for bad debts set forth on the face of the most recent balance
sheet (rather than in any notes thereto) as of the Most Recent
Month End as adjusted for the passage of time through the Closing
Date in accordance with the past custom and practice of the Seller
and (ii) any return or allowance made in the Ordinary Course, the
total of which does not exceed 4.5% of the amount of notes and
accounts receivable shown on the Final Closing Balance Sheet as
set out in the U.S. A.P.A.
3.16 Insurance. Section 3.16 of the Disclosure Schedule sets forth the
following information with respect to each material insurance
policy (including policies providing property, casualty,
liability, and workers' compensation coverage and bond and surety
arrangements) to which the Seller is a party, a named insured, or
otherwise the beneficiary of coverage and which relate to the
Business:
3.16.1 the name, address, and telephone number of the agent;
3.16.2 the name of the insurer, the name of the policyholder,
and the name of each covered insured;
3.16.3 the policy number and the period of coverage;
3.16.4 the scope (including an indication of whether the
coverage was on a claims made, occurrence, or other
basis) and amount (including a description of how
deductibles and ceilings are calculated and operate)
of coverage; and
3.16.5 a description of any retroactive premium adjustments
or other loss-sharing arrangements.
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Section 3.16 of the Disclosure Schedule describes any material
self-insurance arrangements affecting the Seller and which relate
to the Business.
3.17 Litigation. Section 3.17 of the Disclosure Schedule sets forth
each instance in which the Seller (i) is subject to any
outstanding injunction, judgment, order, decree or ruling or (ii)
is a party or, to Seller's Knowledge, is threatened to be made a
party to any action, suit, proceeding, hearing, or investigation
of, in, or before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction or
before any arbitrator.
3.18 Product Warranty. Each product manufactured, sold, leased, or
delivered by the Business has been in material conformity with all
applicable commitments and warranties. Section 3.18 of the
Disclosure Schedule includes copies of the standard terms and
conditions of sale or lease for the Business (containing
applicable guaranty, warranty, and indemnity provisions).
3.19 Product Liability. Except as described in Section 3.19 of the
Disclosure Schedule, to Seller's Knowledge, the Seller does not
have any Liability arising out of any injury to individuals or
damage to property as a result of the ownership, possession, or
use of any product manufactured, sold, leased, or delivered by the
Seller and which relates to the Business.
3.20 Employees. To Seller's Knowledge, no executive or key employee of
the Business has notified the Seller that he or she plans to
terminate employment with the Seller during the next twelve
months. As used in the preceding sentence, "key employee" means
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any all employees who report directly to Philip Cowen and all
employees who report directly to the direct reports of Philip
Cowen. Except as listed in Section 3.20 of the Disclosure
Schedule, with respect to the Business, the Seller is not a party
to or bound by any collective bargaining agreement, nor has it
experienced any strikes, material grievances, claims of unfair
labor practices, or other collective bargaining disputes within
the past year. To Seller's Knowledge, the Seller has not
committed any material unfair labor practice. To Seller's
Knowledge, there is not any organizational effort presently being
made or threatened by or on behalf of any labor union with respect
to employees of the Business.
3.21 Employee Benefits.
3.21.1 Section 3.21.1 of the Disclosure Schedule lists each
Employee Benefit Plan that the Seller maintains or to
which the Seller contributes with respect to the
Business.
3.21.1.1 Each such Employee Benefit Plan (and each
related trust, insurance contract, or fund)
complies in form and in operation in all
material respects with applicable laws.
3.21.1.2 All contributions (including all employer
contributions and employee salary reduction
contributions) which are due have been paid
to each such Employee Benefit Plan which is
an employee pension benefit plan and all
contributions for any period ending on or
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before the Closing Date which are not yet due
have been paid to each such employee pension
benefit plan or accrued in accordance with
the past custom and practice of the Seller.
All premiums or other payments which are due
for all periods ending on or before the
Closing Date have been paid with respect to
each such Employee Benefit Plan which is an
employee welfare benefit plan.
3.21.2 The Seller does not maintain, has not maintained, does
not contribute, has not contributed, and has not been
required to contribute, to any employee welfare
benefit plan providing medical, health, or life
insurance or other welfare-type benefits for current
or future retired or terminated employees, their
spouses, or their dependents.
3.22 Guaranties. Except as listed in Section 3.22 of the Disclosure
Schedule, the Seller is not a guarantor or otherwise is liable for
any Liability or obligation (including indebtedness) of any other
Person. Section 3.22 of the Disclosure Schedule also sets forth
an accurate and complete list showing the name and address of each
bank in which the Business has an account or lockbox, the number
of any such account or lockbox, and the names of all persons
authorized to drawn thereon or have access thereto.
3.23 Environment, Health, and Safety. Except as disclosed in Section
3.23 of the Disclosure Schedule:
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3.23.1 The Business conforms in all material respects with
all applicable Environmental Laws, and neither the
real property used by the Business nor any activities,
operations or conditions thereon currently are in
violation, in any material respect, of any applicable
Environmental Law.
3.23.2 Since January 1, 1991, to Seller's Knowledge, Seller
has timely filed all required reports, obtained all
required approvals, and generated and maintained all
required data, documentation and records with respect
to the Business under applicable Environmental Laws.
3.23.3 Seller has obtained all permits required under
applicable Environmental Laws necessary for the
operation of the Business, and currently is in
material compliance with all terms and conditions of
such environmental permits.
3.23.4 Prior to Seller's acquisition of any ownership or
leasehold interest in the real property it uses, to
Seller's Knowledge, no Regulated Materials were used,
handled, stored or disposed of on, at or beneath such
real property in violation of any applicable
Environmental Law. From and after Seller's
acquisition of its ownership or leasehold interest in
such real property, no Regulated Materials have been
used, handled, stored or disposed of on, at or beneath
the real property in violation in any material respect
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of any applicable Environmental Law by Seller or, to
Seller's Knowledge, by any other Person.
3.23.5 No gasoline or other aboveground or underground
storage tank is or was located at the real property
while the real property was owned or leased by Seller,
or to Seller's Knowledge, while the real property was
owned or leased by any other Person.
3.23.6 Seller has no knowledge of any pending investigation,
claim, action, charge, complaint, demand, suit,
hearing or other proceeding by any governmental
authority having jurisdiction over such matter under
any applicable Environmental Law, or by any other
Person, with respect to the Business or matters
relating thereto. Since January 1, 1991, Seller has
not received written notice of any claim (and to
Seller's Knowledge there exists no such claim) by any
Person alleging the violation of, or any potential
liability under, any applicable Environmental Law with
respect to the Business.
3.23.7 Except in a manner which did not constitute a
violation of any applicable Environmental Laws, to
Seller's Knowledge, neither Seller nor any other
Person has caused or permitted (i) any Regulated
Materials to be generated, stored on, placed, held,
generated or treated, or released, disposed or
discharged from, on, under or at any real property
used by Seller or any part thereof (including any
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resulting groundwater contamination), or (ii) the off-
site disposal of Regulated Materials at any other
location.
3.23.8 Seller has no knowledge of any area on the real
property it uses as to its previously being used as a
dump site for any waste materials, whether or not such
historic disposal activities constituted a violation
of any applicable Environmental Law.
3.23.9 To Seller's Knowledge, the real property used by the
Business does not contain asbestos in any form other
than the asbestos around certain pipes identified in
Seller's report prepared by Whitman and as noted in
Section 3.23.9 of the Disclosure Schedule.
3.23.10 Concurrently with or prior to the date of Seller's
delivery of the Disclosure Schedules, to Seller's
Knowledge, Seller has delivered to Buyer true, correct
and complete copies of all reports, audits,
investigations, correspondence and notices received by
Seller relating to the presence of any Regulated
Materials at the real property used by the Business or
the violation of any applicable Environmental Law by
Seller.
3.24 Certain Business Relationships with Seller. To Seller's
Knowledge, except as set forth on Section 3.24 to the Disclosure
Schedule, no Affiliate or officer, director or employee of the
Seller has been involved in any material business arrangement or
relationship with the Business within the past twelve months, and
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no such Affiliate, officer, director or employee owns any material
asset, tangible or intangible, which is used in the Business.
3.25 Tangible Assets. Each tangible Asset is in good operating
condition and repair (subject to normal wear and tear).
3.26 Customers. To Seller's Knowledge, as of the date of this
Agreement, no customer of the Business has notified Seller that it
intends to stop purchasing products of the Business as a result of
the Seller's completing the transactions contemplated by this
Agreement.
4. REPRESENTATIONS AND WARRANTIES OF BUYER.
The Buyer represents and warrants to the Seller that the statements
contained in this Article 4 are correct and complete as of the date of
this Agreement and will be correct and complete as of the Closing Date
(as though made then and as though the Closing Date were substituted
for the date of this Agreement throughout this Article 4).
4.1 Organization of the Buyer. Buyer is a corporation duly organized,
validly existing, and in good standing under the laws of Great
Britain.
4.2 Authorization of Transaction. The Buyer has full power and
authority to execute and deliver this Agreement and the Ancillary
Agreements, and to perform its obligations hereunder and
thereunder. This Agreement and the Ancillary Agreements
constitute the valid and legally binding obligations of the Buyer,
enforceable in accordance with their terms and conditions.
4.3 Noncontravention. Neither the execution and the delivery of this
Agreement and the Ancillary Agreements, nor the consummation of
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the transactions contemplated hereby and thereby (including the
assignments and assumptions referred to in Article 2 above), will
(i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to
which the Buyer is subject or any provision of the charter or
bylaws of the Buyer or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create
in any party the right to accelerate, terminate, modify, or
cancel, or require any notice under, any agreement, contract,
lease, license, instrument, or other arrangement to which the
Buyer is a party or by which it is bound or to which any of its
assets are subject (or result in the imposition of any Security
Interest upon any of its assets), except where the violation,
conflict, breach, default, acceleration, termination,
modification, cancellation, failure to give notice, or Security
Interest would not have a material adverse effect on the business,
financial condition, operations or results of operation of Buyer
or on the ability of the Parties to consummate the transactions
contemplated by this Agreement. The Buyer does not need to give
any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in
order for the Parties to consummate the transactions contemplated
by this Agreement (including the assignments and assumptions
referred to in Article 2 above), except where the failure to give
notice, make a filing, or obtain authorization, consent or
approval would not have a material adverse effect on the business,
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financial condition, operations or results of operation of Buyer
or on the ability of the Parties to consummate the transactions
contemplated by this Agreement.
4.4 Brokers' Fees. The Buyer has no Liability or obligation to pay
any fees or commissions to any broker, finder, or agent retained
by the Buyer with respect to the transactions contemplated by this
Agreement for which the Seller could become liable or obligated.
5. PRE-CLOSING COVENANTS. The Parties agree as follows with respect to
the period between the execution of this Agreement and the Closing.
5.1 General. Except as otherwise provided, each Party will, acting
diligently and in good faith, use all its reasonable efforts to
take all action and to do all things necessary, proper or
advisable to consummate and make effective the transactions
contemplated by this Agreement (including satisfying the closing
conditions set forth in Article 7 below).
5.2 Notices and Consents.
5.2.1 As soon as practicable after the execution of this
Agreement, the Seller will give any required notices to any
person and will commence to take all reasonable action
required to obtain all consents, authorizations, approvals
and agreements ("Consents") of all persons (including any
authorization or approval required by ISRA) necessary to
authorize, approve, or permit the full and complete grant,
bargain, sale, conveyance, assignment and transfer by the
Seller to the Buyer as contemplated by this Agreement. The
Seller will continue such efforts after the Closing Date,
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if required by the Buyer, at no additional cost to the
Buyer. If any Consent is not obtained by the Closing and
the Buyer nevertheless elects to close the transaction
contemplated by this Agreement, the Seller will cooperate
with the Buyer in any reasonable arrangement to provide the
Buyer with the benefits under or with respect to the matter
as to which the relevant Consents were not obtained. Each
Party will file any notification and report forms and
related material that such Party may be required to file
with any governmental authority (including those required
by the HSR Act), will use its reasonable efforts to obtain
the expiration or early termination of the applicable
waiting period (or any extension thereof) for any required
pre-acquisition notice (including those required by the HSR
Act), and will make any further filings, including the
submission of any additional information or documentary
material, pursuant thereto that may be necessary, proper or
advisable.
5.3 Operation of Business. The Seller, with respect to the Business,
will not engage in any practice, take any action, embark on any
course of inaction, or enter into any transaction outside the
Ordinary Course. Without limiting the foregoing, the Seller will
not engage in any matter described in Section 3.7 above.
5.4 Preservation of Business. The Seller will use its reasonable best
efforts to keep the Business and Assets intact, including its
present operations, physical facilities, working conditions and
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relationships with lessors, licensors, suppliers, customers and
employees.
5.5 Access. After reasonable prior notice delivered by Buyer, the
Seller will permit representatives of the Buyer to have access at
all reasonable times, and in a manner so as not to interfere with
the normal business operations of the Business, to all premises,
properties, books, records, contracts, Tax records and documents
of or pertaining to the Business in order to conduct any
investigation (including environmental assessments) of the
Business.
5.6 Notice of Developments. The Seller will give prompt written
notice to the Buyer of any material development, of which it
becomes aware, affecting the assets, Liabilities, business,
financial condition, operations or results of operation of the
Business. Each Party will give prompt written notice to the other
of any material development affecting the ability of the Parties
to consummate the transactions contemplated by this Agreement.
Seller shall have the right to revise the Disclosure Schedules
before the Closing Date, subject to the Buyer's right to accept or
reject such revisions pursuant to Section 7.1.11.
5.7 Exclusivity. The Seller will not (and the Seller will not cause
or permit any of its Affiliates to) (i) solicit, initiate or
encourage the submission of any proposal or offer from any Person
relating to any (A) liquidation, dissolution or recapitalization,
(B) merger or consolidation, (C) acquisition or purchase of a
substantial portion of the Assets, or (D) similar transaction or
business combination involving the Business or (ii) participate in
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any discussions or negotiations regarding, furnish any information
with respect to, assist or participate in, or facilitate in any
other manner any effort or attempt by any Person to do or seek any
of the foregoing.
5.8 Bulk Sales or Transfer Laws. The Seller agrees to indemnify the
Buyer from and against any and all Liabilities arising from
Seller's failure to comply with any applicable bulk sales law.
6 POST-CLOSING COVENANTS The Parties agree as follows with respect to
the period following the Closing.
6.1 General. In case at any time after the Closing any further action
is necessary or desirable to carry out the purposes of this
Agreement, each Party will take such further action (including the
execution and delivery of such further instruments and documents)
as the other Party reasonably may request, all at the sole cost
and expense of the requesting Party (unless the requesting Party
is entitled to indemnification therefor under Article 8 below).
The Seller acknowledges and agrees that from and after the Closing
the Buyer will be entitled to possession of all documents, books,
records, agreements and financial data of any sort relating to the
Business (other than information relating to the Retained Assets
or Retained Liabilities).
6.2 Litigation Support. In the event and for so long as any Party
actively is contesting or defending against any charge, complaint,
action, suit, proceeding, hearing, investigation, claim or demand
in connection with (i) any transaction contemplated under this
Agreement or (ii) any fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident,
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action, failure to act or transaction on or prior to the Closing
Date involving the Business, the other Party will cooperate with
him or it and his or its counsel in the contest or defense, make
available its personnel and provide such testimony and access to
its books and records as shall be reasonably necessary in
connection with the contest or defense, 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 8 below).
6.3 Transition. The Seller will refer, and will cause its Affiliates
to refer, all customer inquiries relating to the Business to the
Buyer from and after the Closing.
6.4 Tax Matters. Seller and Buyer shall (i) each provide the other
with such assistance as may reasonably be requested by either of
them in connection with the preparation of any return, audit, or
other examination by any tax authority or judicial or
administrative proceedings relating to liability for Taxes, (ii)
each retain and provide the other with any records or other
information that may be relevant to such return, audit or
examination, proceeding or determination, and (iii) each provide
the other with any final determination of any such audit or
examination, proceeding or determination that affects any amount
required to be shown on any return of the other for any period.
Without limiting the generality of the foregoing, Seller and Buyer
shall retain until the applicable statutes of limitation
(including any extensions) have expired, copies of all returns,
supporting work schedules and other records or information that
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may be relevant to such returns for all tax periods or portions
thereof ending before or including the Closing Date and shall not
destroy or otherwise dispose of any such records without first
providing the other party with a reasonable opportunity to review
and copy the same.
6.5 Confidentiality. The Seller 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 Buyer or destroy,
at the request of the Buyer, 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
to the Business but shall not include information that (i) is
publicly known (other than as a result of Seller's disclosure in
violation of this Agreement), (ii) is disclosed to Seller by a
third party that is not under any duty of confidentiality to
Buyer, or (iii) is developed independently by or on behalf of
Seller after the Closing Date. In the event the Seller 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 Seller will notify the Buyer
promptly of the request or requirement so that the Buyer may seek
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an appropriate protective order or waive compliance with the
provisions of this Section 6.5. If, in the absence of a
protective order or the receipt of a waiver under this Section
6.5, the Seller is, on the advice of counsel, compelled to
disclose any confidential information to any tribunal or else
stand liable for contempt, the Seller may disclose the
confidential information to the tribunal. However, the Seller
shall use its reasonable best efforts to obtain, at the reasonable
request and expense of the Buyer, an order or other assurance that
confidential treatment will be accorded to such portion of the
confidential information required to be disclosed as the Buyer
shall designate. The foregoing provisions shall not apply to any
confidential information which is generally available to the
public immediately prior to the time of disclosure.
6.6 [Intentionally Omitted]
6.7 Disclosures. Before Closing, no Party, without the prior written
consent of the other Party, will issue any press release or any
similar public announcement concerning the transactions
contemplated by this Agreement. However, if in the opinion of
counsel to any Party (which opinion shall be confirmed in writing
by such counsel and promptly delivered to the other Party before
disclosure), such disclosure is required by law or regulations of
a stock exchange, the Parties will cooperate in preparing a press
release or releases, and unless the Parties otherwise agrees, such
disclosures shall be limited to the disclosures so required in the
opinion of counsel.
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6.8 Environmental Matters. The Buyer shall not assume, and the Seller
shall remain solely responsible for, the following Liabilities
which shall be Retained Liabilities: All Liabilities of any
nature whatsoever whenever arising under or from compliance with
any Environmental Laws, based upon any events occurring or
conditions existing on or before the Closing Date (whether or not
there is a migration or spreading after the Closing Date),
relating in any manner to (i) operations conducted by the Seller,
its Affiliates or predecessors, or (ii) the Assets or any
facilities owned, leased or used by the Seller, its Affiliates or
predecessors (whether or not such facilities are included in the
Assets), whether such Liabilities relate to on-site or to a
location other than such facilities, including without limitation
any liability arising pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Section 9601 et seq. or similar state or local laws.
6.9 Change of Lockbox Accounts. The Seller shall take such steps as
Buyer may reasonably request to cause Buyer, effective as of the
Closing Date, to be substituted as the sole party having control
over any lockbox to which customers of the Seller make payments,
and to transfer to Buyer, effective as of the Closing Date, the
bank accounts associated with such lockboxes, as well as other
bank accounts specified by Buyer which are disbursement accounts.
6.10 Employees and Employee Benefit Plans.
6.10.1 Employment of Transferred Employees.
6.10.1.1 On the Closing Date, Seller shall make
available for employment, and Buyer shall
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offer to employ, all Active Employees. The
Active Employees who accept such offers shall
become "Transferred Employees" as of the
Closing Date. Except for any limitation
imposed by a collective bargaining agreement,
the Parties agree that the employment
relationship between the Transferred
Employees and the Buyer shall be at will,
that it shall be a new employment
relationship and that the Buyer is not
intended to be, and is not, successor to the
Seller in any legal sense with respect to the
employment relationships existing prior to
the Closing Date between such Transferring
Employees and the Seller.
6.10.1.2 The employment offers referenced in Section
6.10.1.1 above shall be at a wage or salary
level, whichever is applicable, that is
equivalent to the wage or salary level,
whichever is applicable, of each such
employee immediately prior to the Closing
Date. Each such offer of employment to
Active Employees shall also include employee
benefit plans, programs and policies that are
substantially comparable in the aggregate to
the employee benefits of each such employee
immediately prior to the Closing Date (the
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"Prior Employee Benefits"), except that
coverage to Transferred Employees shall not
be subject to any waiting period requirement,
exceptions for pre-existing conditions or gap
period requirement in addition to what was
provided by the Prior Employee Benefits.
6.10.1.3 It is understood, however, that the employee
benefit plans included in the offers of
employment for any Transferred Employees of
the Business may not extend beyond medical
insurance, severance, disability insurance,
life insurance and dental insurance which are
substantially comparable to those that Seller
provides to its Active Employees of the
Business at the date of this Agreement. It
is also understood that neither Seller nor
Buyer will have any obligation to continue
any supplemental benefit plan, stock options,
SARs, profit sharing arrangement, Rabbi
Trust, or other incentive compensation
arrangement Seller may have with any Active
Employee.
6.10.2 Prior Service Credit. For purposes of eligibility,
vesting, and benefits accrual, the Buyer will ensure that
its employee benefit plans for Transferred Employees treat
employment with the Seller prior to the Closing Date the
same as employment with the Buyer after the Closing Date
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("Seller's Prior Service Credit"). Seller's Prior Service
Credit for each Transferred Employee is noted on Exhibit
6.10.2.
6.10.3 Certain Retained Liabilities of the Seller.. The Buyer
shall not assume, and the Seller shall remain solely
responsible for, the following Liabilities and obligations
which shall be Retained Liabilities:
6.10.3.1 All Liabilities and obligations of whatever nature
arising out of, asserted by or relating to past,
present or retired employees of the Seller or its
Affiliates who are not Transferred Employees,
whenever arising, including without limitation (i)
those pertaining to benefits, rights,
entitlements, expense reimbursements, salary,
payroll or other payments, and (ii) those arising
by reason of the transfer or non-transfer of
employees contemplated by this Section 6.10;
6.10.3.2 Except for those liabilities, if any, accrued on
the Final Closing Balance Sheet (as set out in the
U.S. A.P.A. but only to the extent of such
accrual) pursuant to Section 1.6.1 above, all
Liabilities and obligations of whatever nature
arising out of, asserted by or relating to
Transferred Employees, whenever arising, including
without limitation those pertaining to benefits,
rights, entitlements, expense reimbursements,
salary, payroll or other payments, to the extent
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such Liabilities and obligations result from (i)
Buyer's failure to adopt or continue any employee
benefits which were provided by Seller or (ii) an
Occurrence taking place (or relating to a period)
on or before the Closing Date; provided, however,
with respect to the preceding clause (ii) that
with respect to Liabilities resulting from
workplace conditions or exposures which continue
after the Closing Date and for which the initial
claim is asserted after the Closing Date, Seller
shall remain responsible for the proportion of
such Liabilities attributable to periods on or
prior to the Closing Date and Buyer shall be
responsible for the proportion of such Liabilities
attributable to periods after the Closing Date.
6.10.4 Nonduplication. Nothing in this Section 6.10 shall cause
duplicate contributions or benefits to be paid to or with
respect to any employee.
6.10.5 No Changes. Except in the Ordinary Course pursuant to
Seller's customary merit review policies, without the
Buyer's prior written consent, the Seller shall neither
make nor permit any material change to be made in salaries,
wages, employee benefit plans or other benefits from the
date hereof through the Closing Date.
6.10.6 Certain Reservations of Rights by the Buyer.
6.10.6.1 Nothing herein expressed or implied shall confer
upon any Person (including any Transferred
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Employee or any other past or present employees of
the Seller or its Affiliates) other than the
Seller any rights or remedies of any nature or
kind whatsoever, including any right to employment
by the Buyer for any period or under any
particular terms and conditions or any third-party
beneficiary rights hereunder.
6.10.6.2 Nothing herein shall prevent the Buyer at any time
or times after the Closing Date from terminating,
reassigning, promoting or demoting individual
personnel or changing adversely or favorably the
titles, powers, duties, responsibilities,
functions, locations, salaries, other
compensation, or terms and conditions of
employment of officers and employees of the Buyer.
6.10.6.3 Nothing herein shall restrict in any way the right
of the Buyer at any time or times after the
Closing Date to establish, amend or terminate any
employee benefit plan, arrangement, program,
practice, policy or procedure.
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6.11 Discharge of Retained Liabilities. Seller shall discharge
all Retained Liabilities in a timely manner. No disclosure
made by Seller (including any set out in the Disclosure
Schedule) shall limit or modify any Retained Liability or
Seller's obligation to satisfy such Retained Liability.
6.12 Existence and Name. The Seller agrees (i) to maintain its
corporate existence at least until January 15, 2000 and to
notify Buyer (at least 30 days in advance) should it decide
thereafter to dissolve and (ii) to change its name to a
name not confusingly similar to "Alpha" or "Alpha Wire".
7 CONDITIONS TO OBLIGATION TO CLOSE
7.1 Conditions to Obligation of the Buyer. The obligation of the
Buyer to consummate the transactions to be performed by it in
connection with Closing is subject to satisfaction of the
following conditions (or their waiver in writing by the Buyer):
7.1.1 the representations and warranties set forth in Article 3
above shall be true and correct in all material respects at
and as of the Closing Date;
7.1.2 the Seller shall have performed and complied with all of
its covenants that it must perform prior to the Closing;
7.1.3 the Seller shall have procured all Consents referred to in
Section 5.2 above;
7.1.4 no action, suit or proceeding shall be pending or
threatened before any court or quasi-judicial or
administrative agency of any federal, state, local or
foreign jurisdiction wherein an unfavorable judgment,
order, decree, stipulation, injunction or charge would (i)
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prevent consummation of any of the transactions
contemplated by this Agreement, (ii) cause any of the
transactions contemplated by this Agreement to be rescinded
following consummation or (iii) affect adversely the right
of the Buyer to own, operate or control the Assets or the
Business (and no such judgment, order, decree, stipulation,
injunction or charge shall be in effect);
7.1.5 the Seller shall have delivered to the Buyer a certificate
to the effect that each of the conditions specified above
in Sections 7.1.1 through 7.1.4 is satisfied in all
respects;
7.1.6 the Parties shall have received all authorizations,
consents and approvals of governments and governmental
agencies set forth in Exhibit 7.1.6;
7.1.7 the relevant Parties shall have entered into the Ancillary
Agreements in form and substance as set forth in Exhibit
7.1.7 of the U.S. A.P.A. (and with respect to the Supply
Agreement of the U.S. A.P.A., the Parties shall have agreed
on the pricing provisions and list of products), and the
same shall be in effect;
7.1.8 all actions to be taken by the Seller in connection with
consummation of the contemplated transactions and all
certificates, opinions, instruments and other documents
required to effect the contemplated transactions will be
reasonably satisfactory in form and substance to the Buyer;
7.1.9 on the Closing Date, there shall not exist any damage to or
destruction of any parts of the Business, the restoration
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costs of which would exceed $25,000 individually or
$100,000 in the aggregate;
7.1.10 at Buyer's request, the Seller shall have removed and
disposed of any Regulated Materials in storage on any real
property owned or leased by the Seller and used in the
Business, and the Seller shall have provided written
confirmation of such removal and disposal reasonably
satisfactory to the Buyer;
7.1.11 the Buyer in its discretion shall have found acceptable any
revisions of the Disclosure Schedules made by Seller
pursuant to Section 5.6;
7.1.12 the Seller shall have provided written evidence
satisfactory to Buyer of the termination and release of any
Security Interest covering any of the Assets, including
letters from the lenders containing payoff amounts and
reasonable assurance covenants in favor of Buyer;
7.1.13 the Buyer shall have completed its due diligence review and
inspections with respect to (i) environmental, health and
safety matters, (ii) all improvements to real property
(including storm sewers and sewer pipes), (iii) the
opposition proceedings noted in Section 3.12.2 of the
Disclosure Schedule and (iv) title to real property, and
the results of such review and inspections shall be
acceptable to the Buyer in its sole discretion; and
7.1.14 the parties to the U.S. A.P.A. have completed the
transactions contemplated by such agreements.
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7.2 Conditions to Obligation of the Seller. The obligation of the
Seller to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the
following conditions (or their waiver in writing by the Seller):
7.2.1 the representations and warranties set forth in Article 4
above shall be true and correct in all material respects at
and as of the Closing Date;
7.2.2 the Buyer shall have performed and complied with all of
their covenants that they must perform prior to the
Closing;
7.2.3 no action, suit or proceedings shall be pending or
threatened before any court or quasi-judicial or
administrative agency of any federal, state, local or
foreign jurisdiction wherein an unfavorable judgment,
order, decree, stipulation, injunction or charge would (i)
prevent consummation of any of the transactions
contemplated by this Agreement or (ii) cause any of the
transactions contemplated by this Agreement to be rescinded
following consummation (and no such judgment, order,
decree, stipulation, injunction or charge shall be in
effect);
7.2.4 the Buyer shall have delivered to the Seller a certificate
to the effect that each of the conditions specified abovein
Sections 7.2.1 through 7.2.3 is satisfied in all respects;
7.2.5 the Parties shall have received all authorizations,
consents and approvals of governments and governmental
agencies set forth in any attachment hereto;
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7.2.6 the relevant Parties shall have entered into the Ancillary
Agreements in form and substance as set forth in Exhibit
7.1.7 of the U.S. A.P.A. (and with respect to the Supply
Agreement of the U.S. A.P.A., the Parties shall have agreed
on the pricing provisions and list of products), and the
same shall be in effect;
7.2.7 all actions to be taken by the Buyer in connection with
consummation of the contemplated transactions and all
certificates, opinions, instruments and other documents
required to effect the contemplated transactions will be
reasonably satisfactory in form and substance to the
Seller; and
7.2.8 The parties to the U.S. A.P.A. have completed the
transactions contemplated by such agreement.
8 REMEDIES FOR BREACHES OF THIS AGREEMENT
8.1 Survival. All representations, warranties, and covenants of the
Parties contained in this Agreement shall survive the Closing and
continue in effect for the following periods:
8.1.1 Each Party's covenants shall continue forever;
8.1.2 Seller's representations and warranties shall expire as
follows: (i) with respect to Section 3.2 ("Authorization
of Transaction"), 3.5 ("Assets"), 3.21 ("Employee
Benefits"), and 3.23 ("Environment Health & Safety"), three
years after the Closing Date; and (ii) with respect to all
others, two years after the Closing Date.
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8.1.3 the Buyer's representations and warranties shall expire
three years after the Closing Date.
Each Party must assert any claim involving a representation,
warranty or covenant against the other Party before expiration of
any applicable survival period. Notwithstanding any contrary
provision, as long as the claim is asserted timely, the claim will
continue to be valid and assertible even though the survival
period may subsequently expire before the claim is resolved.
8.2 Indemnification Provisions for Benefit of the Buyer. If the
Seller breaches any of its representations, warranties, or
covenants contained in this Agreement (or in any of the Ancillary
Agreements, Schedules or Exhibits referred to herein), then the
Seller agrees to defend, indemnify and save harmless the Buyer,
its Affiliates and its and their directors, officers and
employees ("Buyer's Indemnified Group") from and against the
entirety of any Liability that any of the Buyer's Indemnified
Group may suffer through and after the date of the claim for
indemnification resulting from, arising out of, relating to, in
the nature of, or caused by the breach. The Seller also agrees to
defend, indemnify and save harmless the Buyer's Indemnified Group
from and against the entirety of any Liability that any of the
Buyer's Indemnified Group may suffer through and after the date of
the claim for indemnification resulting from, arising out of,
relating to, or in the nature of any of the Retained Liabilities.
8.3 Indemnification Provisions for Benefit of the Seller. If the
Buyer breaches any of its representations, warranties, or
covenants contained in this Agreement (or in any of the Ancillary
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Agreements, Schedules or Exhibits referred to herein), then the
Buyer agrees to defend, indemnify and save harmless the Seller,
its Affiliates and its and their directors, officers and employees
("Seller' Indemnified Group") from and against the entirety of any
liability that any of the Seller' Indemnified Group may suffer
through and after the date of the claim for indemnification
resulting from, arising out of, relating to, in the nature of, or
caused by the breach.
8.4 Matters Involving Third Parties. If any third party shall notify
any Party (the "Indemnified Party") with respect to any matter
which may give rise to a claim for indemnification against any
other Party (the "Indemnifying Party") under this Section 8, then
the Indemnified Party shall notify the Indemnifying Party thereof
promptly; provided, however, that no delay on the part of the
Indemnified Party in notifying any Indemnifying Party shall
relieve the Indemnifying Party from any liability or obligation
hereunder unless (and then solely to the extent) the Indemnifying
Party thereby is damaged. In the event any Indemnifying Party
notifies the Indemnified Party within 15 days after the
Indemnified Party has given notice of the matter that the
Indemnifying Party is assuming the defense thereof, (i) the
Indemnifying Party will defend the Indemnified Party against the
matter with counsel of its choice reasonably satisfactory to the
Indemnified Party, (ii) the Indemnified Party may retain separate
co-counsel at its sole cost and expense (except that the
Indemnifying Party will be responsible for the fees and expenses
of the separate co-counsel to the extent the Indemnified Party
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concludes reasonably that the counsel the Indemnifying Party has
selected has a conflict of interest), (iii) the Indemnified Party
will not consent to the entry of any judgment or enter into any
settlement with respect to the matter without the written consent
of the Indemnifying Party (not to be withheld unreasonably), and
(iv) the Indemnifying Party will not consent to the entry of any
judgment with respect to the matter, or enter into any settlement
which does not include a provision whereby the plaintiff or
claimant in the matter releases the Indemnified Party from all
Liability with respect thereto, without the written consent of the
Indemnified Party (not to be withheld unreasonably). If the
Indemnifying Party fails to notify the Indemnified Party within 15
days after the Indemnified Party has given notice of the matter
that the Indemnifying Party is assuming the defense thereof, the
Indemnified Party may defend against, or enter into any settlement
with respect to, the matter in any manner it reasonably may deem
appropriate.
8.5 Limitations on Indemnification.
8.5.1 Basket. Notwithstanding any contrary provision in this
Section 8, Buyer shall not make any claim for
indemnification under Section 8.2 for any breach by Seller
of any representation or warranty in Section 3 until the
aggregate amount of all such claims of the Buyer (whenadded
to the aggregate amount of the claims of BWC for any breach
by Alpha Wire of any representation or warranty in Section
3 of the U.S. A.P.A.) exceed the Basket of the U.S. A.P.A.,
in which event the Buyer's Indemnified Group shall be
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entitled to such indemnification for all amounts, including
all amounts forming any part of Basket.
8.5.2 Insurance Proceeds and Cap. Notwithstanding any contrary
provision in this Section 8, the Seller's liability under
this Agreement, except as noted below, shall not exceed
(when added to the aggregate amount of Alpha Wire's
liability under Section 8 of the U.S. A.P.A.) the Cap of
the U.S. A.P.A. Notwithstanding the preceding sentence,
the Cap will not apply, and Seller's liability will not be
so limited, with respect to the following:
(i) Section 6.5 ("Confidentiality");
(ii) Section 6.8 ("Environmental Matters");
(iii)Section 6.10.3 ("Certain Retained Liabilities of the
Seller");
(iv) Any of the representations and warranties noted in
Section 8.1.2 (i); or
(v) The indemnity covenant in Section 8.2 insofar as it
relates to any of the representations, warranties or
covenants noted above in subparts (i) - (iv) of this
Section 8.5.2.
Notwithstanding any contrary provision in this Section 8, any
claim asserted by any of the Buyer's Indemnified Group or any of
the Seller's Indemnified Group, as the case may be, will be
reduced by the amount of any insurance proceeds actually recovered
by the claimant which directly relates to such claim.
8.6 Arbitration. Any claim or dispute arising in connection with
Sections 8.2, 8.3, 8.4 or 8.5 of this Article 8 shall be finally
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settled by arbitration under the Commercial Arbitration rules and
the guidelines for Expediting Larger, Complex Commercial
Arbitrations of the American Arbitration Association, and judgment
upon the award rendered by the arbitrators may be entered in any
court having jurisdiction over it, provided each arbitrator, as
required by these procedures, has been appointed and the Parties
have agreed on the procedures to conduct the arbitration
(including discovery procedures) within 60 days after the Party
requesting arbitration has sent notice of its claim to the other
Party ("Deadline"). If any of such conditions is not met by the
Deadline (unless the failure to do so is beyond the reasonable
control of either Party, in which event the Deadline will be
extended for an additional 30 days), neither Party shall have any
obligation to arbitrate the claim unless they mutually agree to do
so; in such event, each Party may in its sole discretion withhold
its consent. There shall be three arbitrators, all of whom shall
be fully active in their respective occupations and shall conduct
themselves as neutrals, and whose chairman shall be an attorney
experienced in arbitrating large commercial disputes. Each party
shall appoint one arbitrator, and the two arbitrators shall
appoint the third. All arbitrators shall be compensated at their
normal hourly or per diem rates for all time spent by them in
connection with the arbitration proceedings. The arbitration
shall be held in Chicago, Illinois. A preliminary hearing shall
be held. The arbitrators shall actively manage the arbitration to
make it fair, expeditious, economical and less burdensome and
adversarial than litigation, and the award rendered shall not
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include punitive damages but shall state its reasoning. Any party
may request a court to provide interim relief without waiving the
agreement to arbitrate.
9 TERMINATION.
9.1 Termination of Agreement. The Parties may terminate this Agreement
as provided below:
9.1.1 the Parties may terminate this Agreement by mutual written
consent of all the Parties at any time prior to the
Closing;
9.1.2 the Buyer may terminate this Agreement by giving written
notice to the Seller at any time prior to the Closing if
the Seller is in breach, and the Seller may terminate this
Agreement by giving written notice to the Buyer at any time
prior to the Closing if the Buyer is in breach, of any
material representation, warranty, or covenant contained in
this Agreement in any material respect and which breach has
not been cured within ten days after receipt of written
notice of such breach;
9.1.3 the Buyer may terminate this Agreement by giving written
notice to the Seller at any time prior to the Closing if
the Closing shall not have occurred on or before January
31, 1997 by reason of the failure of any condition
precedent under Section 7.1 (unless the failure results
primarily from the Buyer's breaching any representation,
warranty, or covenant contained in this Agreement); or
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9.1.4 the Seller may terminate this Agreement by giving written
notice to the Buyer at any time prior to the Closing if the
Closing shall not have occurred on or before January 31,
1997 by reason of the failure of any condition precedent
under Section 7.2 (unless the failure results primarily
from the Seller's breaching any representation, warranty,
or covenant contained in this Agreement).
10 GENERAL MATTERS
10.1 No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person other than the Parties and
their respective successors and permitted assigns.
10.2 Entire Agreement. This Agreement and the Ancillary Agreements
(including any schedules or attachments that are referenced in
such agreements) constitute the entire agreement among the Parties
and supersedes any prior understandings, agreements, or
representations by or among the Parties, written or oral, that
relate to the subject matter.
10.3 Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties and their respective
successors and permitted assigns. No Party may assign either this
Agreement or any of its rights, interests, or obligations
hereunder without the prior written approval of the other Parties;
provided, however, that the Buyer may (i) assign any of its rights
and interests under this Agreement to one or more of its
Affiliates and (ii) designate one or more of its Affiliates to
perform its obligations hereunder (in any or all of which cases
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the Buyer nonetheless shall remain liable and responsible for the
performance of all of its obligations hereunder).
10.4 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of
which together will constitute one and the same instrument.
10.5 Headings. The Article and section headings contained in this
Agreement and in the Schedules are inserted for convenience only
and shall not affect in any way the meaning or interpretation of
this Agreement.
10.6 Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed given (i) when
actually delivered by hand or mail, (ii) when transmitted by
prepaid cable or telecopier, with confirmation of receipt,
provided that a copy is sent at about the same time by registered
or certified mail, return receipt requested, or (iii) five days
after being sent by Express Mail, Federal Express or other express
delivery service, to the addressee at the following addresses or
telecopier numbers (or to such other address or telecopier number
as a party may specify from time to time by notice hereunder):
If to the Seller: Alpha Wire Limited
c/o Three Cities Research
24th Floor
New York, NY 10022
Attention: Philip R. Cowen
Telephone: (212) 702-9142
Facsimile: (212) 702-9125
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If to the Buyer: Belden U.K. Limited
c/o Belden Inc.
7701 Forsyth Boulevard
Suite 800
St. Louis, Missouri 63105
Attention: Secretary
Telephone: 314-854-8000
Facsimile: 314-854-8001
10.7 Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and
signed by the Buyer and the Seller. No waiver by any Party of any
default, misrepresentation, or breach of warranty or covenant
under this Agreement, whether intentional or not, shall be deemed
to extend to any prior or subsequent default, misrepresentation,
or breach of warranty or covenant under this Agreement or affect
in any way any rights arising by virtue of any prior or subsequent
such occurrence.
10.8 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction
shall not affect the validity or enforceability of the remaining
terms and provisions of this Agreement or the validity or
enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
10.9 Expenses. Each Party will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with
this Agreement or the transactions contemplated by it. The Seller
agrees that except as disclosed in Exhibit 10.9, it has not paid
any amount to any third party, and will not pay any amount to any
third party until after the Closing, with respect to any of its
costs and expenses (including legal fees and expenses) incurred in
connection with this Agreement or the transactions contemplated by
it.
10.10 Construction. The language used in this Agreement will be deemed
to be the language chosen by the Parties to express their mutual
intent, and no rule of strict construction shall be applied
against any Party. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules
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and regulations promulgated under them, unless the context
requires otherwise. The Parties intend that each representation,
warranty, and covenant contained in this Agreement shall have
independent significance. If any Party has breached any
representation, warranty, or covenant contained in this Agreement
in any respect, that there exists another representation,
warranty, or covenant relating to the same subject matter
(regardless of the relative levels of specificity) which the Party
has not breached shall not detract from or mitigate that the Party
is in breach of the first representation, warranty, or covenant.
10.11 Incorporation of Schedules. The Schedules identified in this
Agreement are incorporated by reference and made a part of this
Agreement.
10.12 Specific Performance. Each Party acknowledges and agrees that
the other Parties would be damaged irreparably in the event any of
the provisions of this Agreement are not performed in accordance
with their specific terms or otherwise are breached. Accordingly,
each Party agrees that the other Parties shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of
this Agreement and to enforce specifically this Agreement and the
terms and provisions of it in any action instituted in any court
having jurisdiction over the Parties and the matter, in addition
to any other remedy to which they may be entitled, at law or in
equity.
10.13 Governing Law. The laws of Illinois shall govern the
interpretation of this Agreement.
11 DISPUTE RESOLUTION
11.1 Settlement Attempt. The Parties agree that, except as provided in
Section 2.11, any claim or dispute between them arising out of or
in connection with this Agreement or any alleged breach of this
Agreement (a "Claim") shall be submitted promptly to an executive
of Seller and Buyer who shall have authority to settle the Claim,
and who shall meet in Chicago, Illinois, within 30 days of such
submission to seek in good faith an amicable settlement. In
seeking an amicable settlement, the Parties may consult with a
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neutral third party mediator if both agree in writing. Unless the
Parties agree to the contrary in writing, any advice or decision
of the mediator shall not be binding.
11.2 Litigation. Subject to Section 8.6, any Claim which is not
settled by the Parties within sixty (60) days of notice thereof
first being given by either Party to the other may be pursued by a
Party in any court having subject matter and personal
jurisdiction.
The Parties have executed this Agreement on the date first above
written.
BUYER: BELDEN U.K. LIMITED
By:/s/ Kevin L. Bloomfield
Name:Kevin L. Bloomfield
Title: Vice President
SELLER: ALPHA WIRE LIMITED
By: /s/ Philip Cowen
Name: Philip Cowen
Title: Chief Executive Officer
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