<PAGE> 1
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): MARCH 29, 2000
INTERNATIONAL WIRE GROUP, INC.
(Exact name of Registrant as specified in charter)
DELAWARE 33-93970 43-1705942
(State or other jurisdiction (Commission file number) (I.R.S. employer
of incorporation) identification no.)
101 SOUTH HANLEY RD.
ST. LOUIS, MISSOURI 63105
(Address of principal executive offices)
Registrants' telephone number, including area code: (314) 719-1000
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On March 29, 2000, pursuant to a Stock Purchase Agreement (the "Sale
Agreement") dated March 23, 2000, by and among Viasystems International, Inc.
("Viasystems"), International Wire Group, Inc. (the "Company") and Wirekraft
Industries, Inc. ("Wirekraft"), the Company consummated the sale of Wirekraft, a
wholly owned subsidiary, to Viasystems for $210 million in cash (the "Wirekraft
Sale"). The Company and Viasystems are commonly controlled by affiliates of
Hicks, Muse, Tate and Furst Incorporated. As such, the Company will account for
the Wirekraft Sale on a basis similar to a pooling of interests. The purchase
price was determined by senior management of both companies. In addition, each
of the boards of directors received opinions from nationally recognized
financial advisors that the purchase price is fair, from a financial point of
view, to each of the respective parties. Prior to consummating the Wirekraft
Sale, Wirekraft distributed all of the outstanding shares of Wire Technologies,
Inc. ("Wire Technologies") to the Company. Wire Harness Industries Inc., a
wholly owned subsidiary of Wirekraft, together with its subsidiaries, comprised
the Company's Wire Harness Segment. In connection with the Wirekraft Sale, the
Company entered into a supply agreement (the "Supply Agreement") to supply
substantially all of Wire Harness Industries, Inc.'s insulated wire requirements
through 2003 which is a continuation of existing practice. Substantially all of
the net proceeds (after the payment of fees and expenses) from such sale were
used to repay indebtedness outstanding under the Company's senior credit
facility.
The unaudited pro forma condensed consolidated financial statements
included in this Current Report on Form 8-K as listed under Item 7(b) below are
presented for informational purposes only with respect to the pro forma
financial effects of the Wirekraft Sale on the Company, as determined in
accordance with the financial reporting rules of the Securities and Exchange
Commission (the "Commission"). Such financial statements do not purport to be
indicative of the financial position that would have actually existed or the
results of operations that would have actually been attained if the transactions
related to the Wirekraft Sale noted above had occurred and been recorded in the
periods indicated. Nor do such financial statements purport to be indicative of
the financial position or results of operations that may exist or be attained in
the future. For a discussion of the risks and other important factors which may
affect the Company's business, operating results and financial and other
conditions, reference should be made to the discussion of such risks and other
factors as included from time to time in the Company's filings with the
Commission.
The descriptions of the Sale Agreement and the Supply Agreement do not
purport to be complete and are qualified in their entirety by reference to the
copies of such documents which are filed as exhibits to this Current Report on
Form 8-K.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(b) Pro Forma Financial Information.
The following unaudited pro forma condensed
consolidated financial information of the Company is
attached as Appendix A to this Current Report on From
8-K and by this reference incorporated herein:
(i) Introduction;
(ii) Pro Forma Condensed Consolidated Balance
Sheet (Unaudited) at December 31, 1999;
2
<PAGE> 3
(iii) Pro Forma Condensed Consolidated Statement
of Operations (Unaudited) for the year ended
December 31, 1999;
(iv) Pro Forma Condensed Consolidated Statement
of Operations (Unaudited) for the year ended
December 31, 1998;
(v) Pro Forma Condensed Consolidated Statement
of Operations (Unaudited) for the year ended
December 31, 1997;
(vi) Notes to the Unaudited Pro Forma Condensed
Consolidated Financial Statements.
(c) Exhibits.
10.1 - Stock Purchase Agreement dated March 23,
2000, by and among Viasystems International,
Inc., International Wire Group, Inc. and
Wirekraft Industries, Inc.
10.2 Supply Agreement dated March 29, 2000,
between Wire Harness Industries, Inc. and
International Wire Group, Inc.
99.1 - Press Release dated as of March 29, 2000
3
<PAGE> 4
APPENDIX A
INTERNATIONAL WIRE GROUP, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Introduction
The following unaudited Pro Forma Condensed Consolidated Balance Sheet as of
December 31, 1999, gives effect to the elimination of the assets and liabilities
of Wirekraft, which was disposed of as described in Note 2 of the unaudited Pro
Forma Condensed Consolidated Financial Statements and the related pro forma
adjustments as described in the notes thereto. The balance sheet is presented as
though the Wirekraft Sale occurred on December 31, 1999.
The following unaudited Pro Forma Condensed Consolidated Statements of
Operations for the years ended December 31, 1999, 1998 and 1997 give effect to
the elimination of results of operations of Wirekraft which was disposed of as
described in Note 2 to the unaudited Pro Forma Condensed Consolidated Financial
Statements and the related pro forma adjustments as described in the notes
thereto. The unaudited Pro Forma Condensed Consolidated Statements of Operations
for the years ended December 31, 1999, 1998 and 1997 are presented as though the
Wirekraft Sale occurred on December 31, 1998, 1997 and 1996, respectively.
The unaudited Pro Forma Condensed Consolidated Balance Sheet and Statements of
Operations should be read in conjunction with the notes thereto and with the
historical consolidated financial statements of the Company and the notes
thereto as included in the reports filed by the Company with the Commission from
time to time.
4
<PAGE> 5
INTERNATIONAL WIRE GROUP, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE DATA)
AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
Adjustments
-----------------------------------------
Company Disposition Pro Forma Company
Historical of Wirekraft Adjustments Pro Forma
---------- ------------ ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 7,425 $ 210,000 (1) $(198,491)(4) $ 18,934
Accounts receivable 101,310 (15,836)(2) 3,940 (3) 89,414
Inventories 92,142 (20,307)(2) - 71,835
Other current assets 27,659 (3,157)(2) - 24,502
--------- --------- --------- ---------
Total current assets 228,536 170,700 (194,551) 204,685
Property, plant and equipment, net 184,660 (19,878)(2) - 164,782
Intangibles and other assets 264,911 (45,496)(2) (3,202)(4) 216,213
--------- --------- --------- ---------
Total assets 678,107 105,326 (197,753) 585,680
========= ========= ========= =========
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
Current liabilities:
Current maturities of long-term obligations 9,606 (188)(2) (8,000)(4) 1,418
Accounts payable 48,655 (14,041)(2) 3,940 (3) 38,554
Accrued and other liabilities 56,499 (10,034)(2) 8,500 (5),(6) 54,965
Accrued interest 4,041 - (946)(4) 3,095
--------- --------- --------- ---------
Total current liabilities 118,801 (24,263) 3,494 98,032
Long-term obligations, less current maturities 526,338 (123)(2) (189,545)(4) 336,670
Other long-term liabilities 52,698 (6,334)(2) - 46,364
--------- --------- --------- ---------
Total liabilities 697,837 (30,720) (186,051) 481,066
Stockholder's equity (deficit):
Common stock, $.01 par value, 1,000 shares
authorized, issued and outstanding 0 - - 0
Other stockholder's equity (deficit) (19,730) 136,046 (1),(2) (11,702)(4),(5),(6) 104,614
--------- --------- --------- ---------
Total stockholder's equity (deficit) (19,730) 136,046 (11,702) 104,614
--------- --------- --------- ---------
Total liabilities and stockholder's equity
(deficit) $ 678,107 $ 105,326 $(197,753) $ 585,680
========= ========= ========= =========
</TABLE>
See accompanying notes to the unaudited pro forma
condensed consolidated financial statements
5
<PAGE> 6
INTERNATIONAL WIRE GROUP, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE DATA)
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
Adjustments
------------------------------
Company Disposition Pro Forma Company
Historical of Wirekraft Adjustments Pro Forma
---------- ------------ ----------- ---------
<S> <C> <C> <C> <C>
Net sales $ 643,690 $(191,046)(2) 29,021(3) $ 481,665
Operating expenses:
Cost of goods sold 456,333 (138,379)(2) 29,021(3) 346,975
Selling, general and administrative expenses
including non-cash compensation income
of $1,542 61,194 (23,376)(2) 2,684(7) 40,502
Depreciation and amortization 44,794 (9,257)(2) -- 35,537
Unusual charges 3,000 -- -- 3,000
--------- --------- --------- ---------
Operating income 78,369 (20,034) (2,684) 55,651
Other income (expense):
Interest expense (49,839) 7,842(2) 9,067(4) (32,930)
Amortization of deferred financing costs (3,050) 529(2) 462(4) (2,059)
--------- --------- --------- ---------
Income before income tax provision and
cumulative effect of change in accounting
principle 25,480 (11,663) 6,845 20,662
Income tax provision 10,055 (4,752)(2) 2,738(6) 8,041
--------- --------- --------- ---------
Income before cumulative effect of change in
accounting principle $ 15,425 $ (6,911) $ 4,107 $ 12,621
========= ========= ========= =========
</TABLE>
See accompanying notes to the unaudited pro forma
condensed consolidated financial statements
6
<PAGE> 7
INTERNATIONAL WIRE GROUP, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE DATA)
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
Adjustments
------------------------------
Company Disposition Pro Forma Company
Historical of Wirekraft Adjustments Pro Forma
---------- ------------ ----------- ---------
<S> <C> <C> <C> <C>
Net sales $ 645,921 $(170,393)(2) $ 22,012(3) $ 497,540
Operating expenses:
Cost of goods sold 464,552 (119,144)(2) 22,012(3) 367,420
Selling, general and administrative expenses
including non-cash compensation expense
of $4,158 65,442 (22,248)(2) 2,459(7) 45,653
Depreciation and amortization 42,758 (7,759)(2) -- 34,999
--------- --------- --------- ---------
Operating income 73,169 (21,242) (2,459) 49,468
Other income (expense):
Interest expense (50,627) 8,510(2) 7,190(4) (34,927)
Amortization of deferred financing costs (2,980) 519(2) 482(4) (1,979)
Other, net 95 4(2) -- 99
--------- --------- --------- ---------
Income before income tax provision and
cumulative effect of change in accounting
principle 19,657 (12,209) 5,213 12,661
Income tax provision 10,002 (5,166)(2) 2,085(6) 6,921
--------- --------- --------- ---------
Income before cumulative effect of change in
accounting principle $ 9,655 $ (7,043) $ 3,128 $ 5,740
========= ========= ========= =========
</TABLE>
See accompanying notes to the unaudited pro forma condensed consolidated
financial statements.
7
<PAGE> 8
INTERNATIONAL WIRE GROUP, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE DATA)
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Adjustments
------------------------------
Company Disposition Pro Forma Company
Historical of Wirekraft Adjustments Pro Forma
---------- ------------ ----------- ---------
<S> <C> <C> <C> <C>
Net sales $ 695,148 $(165,430)(2) 19,828(3) $ 549,546
Operating expenses:
Cost of goods sold 530,310 (119,268)(2) 19,828(3) 430,870
Selling, general and administrative expenses
including non-cash compensation expense
of $4,010 60,713 (18,377)(2) 1,920(7) 44,256
Depreciation and amortization 36,826 (7,602)(2) -- 29,224
Plant closing charges 2,000 -- -- 2,000
Inventory valuation adjustment 8,500 -- -- 8,500
--------- --------- --------- ---------
Operating income 56,799 (20,183) (1,920) 34,696
Other income (expense):
Interest expense (50,939) 8,710(2) 7,595(4) (34,634)
Amortization of deferred financing costs (3,132) 545(2) 651(4) (1,936)
Other, net (103) 114(2) -- 11
--------- --------- --------- ---------
Income before income tax provision, cumulative
effect of change in accounting principle and
extraordinary item 2,625 (10,814) 6,326 (1,863)
Income tax provision 2,654 (4,597)(2) 2,530(6) 587
--------- --------- --------- ---------
Income (loss) before cumulative effect of change
in accounting principle and extraordinary item $ (29) $ (6,217) $ 3,796 $ (2,450)
========= ========= ========= =========
</TABLE>
8
<PAGE> 9
INTERNATIONAL WIRE GROUP, INC.
NOTES TO THE UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(In thousands)
Basis of Presentation
The unaudited Pro Forma Condensed Consolidated Balance Sheet begins with the
historical condensed consolidated balance sheet for the Company as of December
31, 1999. A separate column is included to give effect to the disposition of
Wirekraft, including the deletion of the divested business and the addition of
the proceeds to the Company from such disposition. Another column is included
for the related pro forma adjustments as described herein.
The unaudited Pro Forma Condensed Consolidated Statements of Operations begins
with the historical condensed consolidated statements of operations for the
Company for the years ended December 31, 1999, 1998 and 1997. A separate column
is included to give effect to the disposition of Wirekraft, including the
deletion of results of operations of the divested business. Another column is
included for the related pro forma adjustments as described herein. The
unaudited Pro Forma Condensed Consolidated Statement of Operations do not
include one-time charges of an estimated $1,500 directly attributable to the
disposition of Wirekraft.
Note 1
The unaudited Pro Forma Condensed Consolidated Balance Sheet includes an
adjustment to record the proceeds to the Company of $210,000 for the sale of
Wirekraft. Since the Wirekraft Sale is accounted for under a method similar to a
pooling of interests because the entities are under common control, the proceeds
are considered as a contribution of capital to the Company.
Note 2
The unaudited Pro Forma Condensed Consolidated Balance Sheet includes an
adjustment to eliminate the assets, liabilities and equity of Wirekraft. The
unaudited Pro Forma Condensed Consolidated Statements of Operations include
adjustments to eliminate the results of operations for Wirekraft for each of the
years ended December 31, 1999, 1998 and 1997.
Note 3
The Pro Forma Adjustments column of the unaudited Pro Forma Condensed
Consolidated Balance Sheet includes an adjustment to recognize trade receivables
of $3,940 from Wirekraft to the Company that were previously eliminated as an
intercompany transaction. The Pro Forma Adjustments column of the unaudited Pro
Forma Condensed Consolidated Statements of Operations for the years ended
December 31, 1999, 1998 and 1997 include adjustments to recognize sales of
$29,021, $22,012 and $19,828, respectively, from a subsidiary of the Company to
Wirekraft and the related cost of sales of the same amounts that were previously
eliminated as an intercompany transaction.
Note 4
The Pro Forma Adjustments column of the unaudited Pro Forma Condensed
Consolidated Balance Sheet includes an adjustment to record the retirement of
$197,545 of debt outstanding under the Company's senior credit facility.
Additionally, the related $946 of accrued interest and $3,202 of deferred
financing costs were adjusted as if they had been paid or expensed as a result
of the Wirekraft Sale.
9
<PAGE> 10
INTERNATIONAL WIRE GROUP, INC.
NOTES TO THE UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
The Pro Forma Adjustments columns of the unaudited Pro Forma Condensed
Consolidated Statements of Operations for the years ended December 31, 1999,
1998 and 1997 include adjustments to reflect the reduction of indebtedness from
the proceeds of the Wirekraft Sale. These adjustments are reflected as decreases
to interest expense of $9,067, $7,190 and $7,595, respectively, and decreases in
amortization of deferred financing costs of $462, $482 and $651, respectively.
Note 5
The Pro Forma Adjustments column of the unaudited Pro Forma Condensed
Consolidated Balance Sheet includes an adjustment to record a liability related
to the estimated costs directly attributable to the transaction of $1,500.
Note 6
The Pro Forma Adjustments column of the unaudited Pro Forma Condensed
Consolidated Balance Sheet includes an adjustment to recognize an estimated
$7,000 of various taxes as a result of the divestiture.
The pro forma adjustments included in the Pro Forma Adjustments columns of the
unaudited Pro Forma Condensed Consolidated Statements of Operations described
above have been presented on a pre-tax basis. For the unaudited Pro Forma
Statements of Operations, an effective U.S. federal and state income tax rate of
40% was used to reflect the income tax impact of all pro forma adjustments. This
rate approximates the statutory rate during each of the respective years.
Note 7
The Pro Forma Adjustments columns of the unaudited Pro Forma Condensed
Consolidated Statements of Operations for the years ended December 31, 1999,
1998 and 1997 include adjustments to record additional administrative costs
related to corporate overhead that was previously allocated to Wirekraft. These
adjustments are reflected as increases to selling, general and administrative
expenses of $2,684, $2,459 and $1,920, respectively.
10
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SIGNATURES
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.
INTERNATIONAL WIRE GROUP, INC.
Date: April 13, 2000 By: /s/ DAVID M. SINDELAR
---------------------
Name: David M. Sindelar
Title: Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C> <C>
10.1 - Stock Purchase Agreement dated March 23,
2000, by and among Viasystems International,
Inc., International Wire Group, Inc. and
Wirekraft Industries, Inc.
10.2 Supply Agreement dated March 29, 2000,
between Wire Harness Industries, Inc. and
International Wire Group, Inc.
99.1 - Press Release dated as of March 29, 2000
</TABLE>
<PAGE> 1
EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
AMONG
VIASYSTEMS INTERNATIONAL, INC.,
INTERNATIONAL WIRE GROUP, INC.
AND
WIREKRAFT INDUSTRIES, INC.
WITH RESPECT TO THE SALE OF ALL OF THE OUTSTANDING
CAPITAL STOCK OF WIREKRAFT INDUSTRIES, INC.
Dated: March 23, 2000
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Article I DEFINITIONS......................................................................................1
SECTION 1.1. Definitions...................................................................................1
Article II THE ACQUISITION..................................................................................3
SECTION 2.1. Purchase and Sale of Shares...................................................................3
SECTION 2.2. Consideration for the Shares..................................................................3
Article III REPRESENTATIONS AND WARRANTIES OF HOLDINGS.......................................................4
SECTION 3.1. Organization and Qualification................................................................4
SECTION 3.2. Authorization.................................................................................4
SECTION 3.3. No Violation..................................................................................4
SECTION 3.4. Capitalization of the Company.................................................................5
SECTION 3.5. Subsidiaries and Equity Investments...........................................................5
SECTION 3.6. Consents and Approvals........................................................................6
SECTION 3.7. Financial Statements..........................................................................6
SECTION 3.8. Absence of Undisclosed Liabilities............................................................6
SECTION 3.9. Absence of Certain Changes....................................................................6
SECTION 3.10. Litigation....................................................................................6
SECTION 3.11. Real Property; Liens and Encumbrances.........................................................7
SECTION 3.12. Certain Agreements............................................................................7
SECTION 3.13. Employee Benefit Plans........................................................................8
SECTION 3.14. Taxes.........................................................................................8
SECTION 3.15. Compliance with Applicable Law...............................................................11
SECTION 3.16. Brokers' Fees and Commissions................................................................11
SECTION 3.17. Proprietary Rights...........................................................................11
SECTION 3.18. Labor Relations..............................................................................12
SECTION 3.19. Insurance....................................................................................12
SECTION 3.20. Environmental Matters........................................................................12
Article IV REPRESENTATIONS AND WARRANTIES OF BUYER.........................................................13
SECTION 4.1 Organization and Qualification...............................................................13
SECTION 4.2. Authorization................................................................................13
SECTION 4.3. No Violation.................................................................................13
</TABLE>
i
<PAGE> 3
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
<S> <C>
SECTION 4.4. Consents and Approvals.......................................................................14
SECTION 4.5. Purchase for Investment......................................................................14
SECTION 4.6. Financing....................................................................................14
Article V COVENANTS.......................................................................................14
SECTION 5.1 Conduct of Business of the Company Prior to the Closing......................................14
SECTION 5.2 Access to Information........................................................................15
SECTION 5.3 All Reasonable Efforts.......................................................................16
SECTION 5.4 Consents and Approvals.......................................................................16
SECTION 5.5 Public Announcements.........................................................................16
SECTION 5.6 Notification by Holdings.....................................................................16
SECTION 5.7 No Implied Representations or Warranties.....................................................16
SECTION 5.8 Intercompany Obligations.....................................................................17
SECTION 5.9 Release of Guarantees........................................................................17
SECTION 5.10 Further Assurances...........................................................................17
Article VI CLOSING CONDITIONS..............................................................................17
SECTION 6.1 Conditions to Each Party's Obligations under this Agreement..................................17
SECTION 6.2 Conditions to the Obligations of Buyer under this Agreement..................................18
SECTION 6.3 Conditions to the Obligations of Holdings under this Agreement...............................18
Article VII CLOSING.........................................................................................19
SECTION 7.1 Closing......................................................................................19
Article VIII SURVIVAL AND INDEMNIFICATION....................................................................20
SECTION 8.1 Survival of Representations and Warranties...................................................20
SECTION 8.2 Indemnification..............................................................................20
SECTION 8.3 Defense of Claims............................................................................21
SECTION 8.4 Adjustment to Purchase Price.................................................................23
SECTION 8.5 Exclusive Remedy.............................................................................23
Article IX TERMINATION AND ABANDONMENT.....................................................................23
SECTION 9.1 Termination..................................................................................23
SECTION 9.2 Procedure and Effect of Termination..........................................................23
</TABLE>
ii
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TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
<S> <C>
Article X MISCELLANEOUS PROVISIONS...........................................................................24
SECTION 10.1 Amendment and Modification......................................................................24
SECTION 10.2 Waiver of Compliance; Consents..................................................................24
SECTION 10.3 Validity........................................................................................24
SECTION 10.4 Expenses and Obligations........................................................................24
SECTION 10.5 Parties in Interest.............................................................................24
SECTION 10.6 Notices.........................................................................................24
SECTION 10.7 Governing Law...................................................................................25
SECTION 10.8 Counterparts....................................................................................25
SECTION 10.9 Headings........................................................................................25
SECTION 10.10 Entire Agreement................................................................................25
SECTION 10.11 Assignment......................................................................................25
SECTION 10.12 Jurisdiction and Venue..........................................................................26
SECTION 10.13 Tax Matters.....................................................................................26
</TABLE>
iii
<PAGE> 5
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement"), dated March
23, 2000, is by and among Viasystems International, Inc., a Delaware
corporation ("Buyer"), International Wire Group, Inc., a Delaware corporation
("Holdings"), and Wirekraft Industries, Inc., a Delaware corporation (the
"Company").
RECITALS
WHEREAS, Holdings is the record and beneficial owner of all of
the issued and outstanding shares of common stock, par value $0.01 per share, of
the Company (the "Common Stock");
WHEREAS, Holdings desires to sell to Buyer, and Buyer desires
to purchase from Holdings, all of the issued and outstanding shares of Common
Stock, all in accordance with the provisions of this Agreement;
WHEREAS, the Company previously declared and paid a dividend
on the Common Stock in the form of all of the shares of the Company's
wholly-owned subsidiary, Wire Technologies, Inc.;
WHEREAS, the Board of Directors of Holdings and the Board of
Directors of Buyer have approved the acquisition of the Company by Buyer
pursuant to this Agreement; and
WHEREAS, each of Buyer and Holdings desires to make certain
representations, warranties and agreements in connection with the sale and
acquisition of the Common Stock and also desires to set forth various conditions
precedent thereto.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements herein contained, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. For purposes of this Agreement, the term:
(a) "affiliate" means a person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, another person.
(b) "Code" means the Internal Revenue Code of 1986, as
amended (including any successor code), and the rules and regulations
promulgated thereunder.
(c) "contract" means any contract, agreement, indenture,
note, bond, loan, instrument, lease, conditional sales contract, mortgage,
license, franchise, insurance policy, commitment or other arrangement or
agreement.
<PAGE> 6
(d) "Credit Agreement" means that certain Amended and Restated
Credit Agreement, dated as of February 12, 1997, among Holdings, International
Wire Holding Company, the several lenders from time to time parties thereto, the
Chase Manhattan Bank, as Administrative Agent, and Bankers Trust Company, as
Documentation Agent, as amended by that certain First Amendment to Amended and
Restated Credit Agreement, dated as of June 17, 1997, among Holdings,
International Wire Holding Company, the several lenders from time to time
parties thereto, the Chase Manhattan Bank, as Administrative Agent, and Bankers
Trust Company, as Documentation Agent, and as further amended by that certain
Second Amendment and Waiver to Amended and Restated Credit Agreement, dated as
of September 29, 1997, among Holdings, International Wire Holding Company, the
several lenders from time to time parties thereto, the Chase Manhattan Bank, as
Administrative Agent, and Bankers Trust Company, as Documentation Agent.
(e) "Environmental Laws" means all applicable federal, state
or local statutes, codes, rules or regulations relating to the environment,
natural resources, pollution or contamination.
(f) "Governmental Authority" means any nation or government,
any state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
(g) "Hazardous Material" means any substance, material or
waste which is regulated, defined or classified by any Governmental Authority as
a "hazardous waste," "hazardous material," "hazardous substance," "extremely
hazardous substance," "restricted hazardous waste," "contaminant," "toxic waste"
or "toxic substance" or words of similar import and includes, but is not limited
to, petroleum, petroleum products (including crude oil and any fraction
thereof), asbestos, asbestos-containing materials, urea formaldehyde and
polychlorinated biphenyls.
(h) "knowledge" of Holdings means the actual knowledge, after
due inquiry, of the individuals listed on Section 1.1(h) of the Disclosure
Schedule.
(i) "Material Adverse Effect" means a material adverse effect
on the business, operations, liabilities, properties, assets or financial
condition of, in the case of Holdings or the Company, the Company and its
Subsidiaries taken as a whole, and in the case of Buyer, Buyer and its
Subsidiaries taken as a whole.
(j) "person" means an individual, corporation, partnership,
joint venture, association, trust, unincorporated organization or, as
applicable, any other entity.
(k) "SEC" means the Securities and Exchange Commission.
(l) "Securities Act" means the Securities Act of 1933, as
amended.
(m) "Seller Consolidated Returns" shall mean all consolidated,
combined, affiliated or unitary Tax Returns which include the taxable income or
loss of any of the Company or its Subsidiaries and any of Holdings or its
Subsidiaries (other than the Company or its Subsidiaries).
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(n) "Senior Debt" means all indebtedness of Holdings and its
Subsidiaries under the Credit Agreement.
(o) "Shares" means the 1,000 shares of Common Stock being sold
by Holdings to Buyer pursuant to this Agreement.
(p) "Subsidiary" means any person of which at least a majority
of the outstanding shares or other equity interests having ordinary voting power
for the election of directors or comparable managers of such person is owned,
directly or indirectly, by another person.
(q) "Taxes" shall mean all taxes, charges, fees, levies, or
other similar assessments or liabilities imposed by the United States of
America, or by any state, local or foreign government, or any subdivision,
agency or other similar person of the United States or any such government,
whether payable by reason of contract, assumption, transferee liability,
operation of law or otherwise, including without limitation (a) income, gross
receipts, excise, property, sales, use, transfer, withholding, payroll, windfall
profit, severance, production, license, employment, alternative or add-on
minimum, ad valorem, stamp, estimated, transaction, title, capital, gains,
paid-up capital, profits, occupation, premium, federal highway use, commercial
rent, social security, workers' compensation, employer health, goods and
services, value added, environmental and franchise taxes; and (b) any interest,
fines, penalties or additions to taxes, or additional amount imposed on any
Taxes, resulting from, attributable to, or incurred in connection with any
Taxes.
(r) "Tax Returns" means any report, return or statement
relating to or required to be filed in connection with Taxes (including any
attachments thereto, and any amendment thereof), including, but not limited to,
any information return, claim for refund, declaration of estimated Tax and
Seller Consolidated Returns.
(s) "Tax Sharing Agreement" shall mean any allocation,
indemnity, sharing or similar contract or arrangement (whether or not written)
providing for or otherwise dealing with the allocation of responsibilities
and/or rights relating to Taxes.
ARTICLE II
THE ACQUISITION
SECTION 2.1. Purchase and Sale of Shares. On the terms and subject to
the conditions hereof, at the Closing (as hereinafter defined), Holdings will
sell, assign, transfer and convey to Buyer, and Buyer will purchase and acquire
from Holdings, all right, title and interest of Holdings in and to the Shares,
free and clear of all Liens (as hereinafter defined).
SECTION 2.2. Consideration for the Shares. The aggregate purchase price
payable by Buyer for the Shares shall be $210,000,000 in cash, plus the
consolidated amount (the "Cash Amount") of cash and cash equivalents held by the
Company and its Subsidiaries calculated as of the Closing, less any outstanding
indebtedness or other liabilities for borrowed money of the Company and its
Subsidiaries ("Indebtedness") not repaid prior to or in connection with the
Closing (the "Purchase Price"). The "Cash Amount" and "Indebtedness" shall be
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determined on the same basis as would be determined for presentation on a
balance sheet prepared in accordance with GAAP (as hereinafter defined) as of
the Closing. On the Closing Date (as hereinafter defined), Buyer will pay the
Purchase Price by wire transfer of immediately available funds to an account
designated in writing by Holdings at least two (2) days prior to the Closing
Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF HOLDINGS
Holdings represents and warrants to Buyer as set forth below:
SECTION 3.1. Organization and Qualification. Except as set forth in
Section 3.1 of the Disclosure Schedule, each of the Company and its Subsidiaries
is a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, with all requisite corporate power
and authority to own, operate and lease its properties and to carry on its
business as it is now being conducted, except where the failure to be so
organized, existing and in good standing or to have such power or authority
would not have a Material Adverse Effect. Each of the Company and its
Subsidiaries is qualified or licensed to do business and is in good standing in
every jurisdiction where the nature of the business conducted by it or the
properties owned or leased by it requires qualification, except where the
failure to be so qualified or licensed would not, in the aggregate, have a
Material Adverse Effect. Holdings has delivered or made available to Buyer
complete and correct copies of the Certificates or Articles of Incorporation and
Bylaws (or similar organizational documents) of the Company and each of its
Subsidiaries.
SECTION 3.2. Authorization. Each of Holdings and the Company has full
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Holdings and the Company, the performance by Holdings and the
Company of their respective obligations hereunder, and the consummation by them
of the transactions contemplated hereby, have been duly authorized by their
respective Boards of Directors. No other corporate action on the part of
Holdings or the Company is necessary to authorize the execution and delivery of
this Agreement or the consummation of the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by each of Holdings
and the Company and constitutes a valid and binding obligation of Holdings and
the Company, enforceable against each of them in accordance with its terms,
except to the extent that such enforcement may be subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
SECTION 3.3. No Violation. Except as set forth in Section 3.3 of the
Disclosure Schedule, neither the execution and delivery of this Agreement by
Holdings and the Company and the performance by Holdings and the Company of
their respective obligations hereunder nor the consummation by Holdings and the
Company of the transactions contemplated hereby will (a) violate, conflict with
or result in any breach of any provision of the Certificates of
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Incorporation or Bylaws of Holdings or the Company, (b) violate, conflict with
or result in a violation or breach of, or constitute a default (with or without
due notice or lapse of time or both) under the terms, conditions or provisions
of any note, bond, mortgage, indenture or deed of trust, or any material
license, lease or agreement to which Holdings or the Company is a party or (c)
violate any order, writ, judgment, injunction, decree, statute, rule or
regulation of any court or Governmental Authority applicable to Holdings or the
Company, except such defaults and violations which, in the aggregate, would not
have a Material Adverse Effect.
SECTION 3.4. Capitalization of the Company. The authorized capital
stock of the Company consists of 1,000 shares, all of which are designated
Common Stock. As of the date hereof, the Company has 1,000 shares of Common
Stock issued and outstanding (constituting the Shares), all of which have been
validly issued, are fully paid and non-assessable and were not issued in
violation of any preemptive rights. There are (i) no options, warrants, calls,
subscriptions, conversion or other rights, agreements or commitments obligating
the Company to issue any additional shares of capital stock or any other
securities convertible into, exchangeable for or evidencing the right to
subscribe for any shares of capital stock of the Company, (ii) agreements or
commitments obligating the Company to repurchase, redeem or otherwise acquire
any shares of capital stock of the Company, (iii) restrictions to the transfer
of any shares of capital stock of the Company (other than those restrictions
resulting from federal and state securities or "blue sky" laws) or (iv)
requirements of the Company or Holdings to vote any shares of capital stock of
the Company. The Shares are held of record and beneficially by Holdings free and
clear of all Liens other than the pledge thereof to secure the Senior Debt. At
Closing good title to the Shares shall be conveyed to Buyer free and clear of
all Liens.
SECTION 3.5. Subsidiaries and Equity Investments.
(a) Section 3.5 of the Disclosure Schedule sets forth the
name, jurisdiction of incorporation, capitalization and percentage ownership of
each Subsidiary of the Company. The Company has no direct or indirect equity
ownership in any person other than the Subsidiaries.
(b) All of the outstanding shares of capital stock of each
Subsidiary of the Company have been duly authorized and validly issued, are
fully paid and non-assessable, have not been issued in violation of any
preemptive rights, and, except as specified in Section 3.5 of the Disclosure
Schedule, are owned of record and beneficially, directly or indirectly, by the
Company, free and clear of any Liens.
(c) There are (i) no options, warrants, calls, subscriptions,
conversion or other rights, agreements or commitments obligating any of the
Company's Subsidiaries to issue any additional shares of capital stock of such
Subsidiary or any other securities convertible into, exchangeable for or
evidencing the right to subscribe for any shares of such capital stock, (ii)
agreements or commitments obligating any Subsidiary of the Company to
repurchase, redeem or otherwise acquire any shares of capital stock of such
Subsidiary, (iii) restrictions to the transfer of any shares of capital stock of
any Subsidiary of the Company (other than those restrictions resulting from
federal and state securities or "blue sky" laws) or (iv) requirements of the
Company or Holdings to vote any shares of capital stock of any Subsidiary of the
Company.
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SECTION 3.6. Consents and Approvals. Except as set forth in Section 3.6
of the Disclosure Schedule, no filing or registration with, no notice to and no
permit, authorization, consent or approval of any Governmental Authority is
necessary for the consummation by Holdings and the Company of the transactions
contemplated by this Agreement other than (a) consents and approvals of or
filings or registrations with the Antitrust Division of the United States
Department of Justice (the "DOJ") pursuant to the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), (b) requirements of
federal and state securities laws, (c) those already obtained, and (d) consents,
registrations, approvals, authorizations, permits, filings or notifications
which the failure to obtain, in the aggregate, would not have a Material Adverse
Effect.
SECTION 3.7. Financial Statements. Holdings has delivered to Buyer
copies of the consolidated balance sheets of the Company as of December 31, 1998
and December 31, 1999, together with the related consolidated statement of
income for the years ended December 31, 1997, 1998 and 1999 (such financial
statements being hereinafter referred to as the "Financial Statements"). The
Financial Statements (i) were prepared in accordance with generally accepted
accounting principles applied on a consistent basis ("GAAP") throughout the
periods covered thereby, except as otherwise noted thereon or disclosed in
Section 3.7 of the Disclosure Schedule and except for the absence of notes
thereto, and (ii) present fairly in all material respects the consolidated
financial position, results of operations and cash flows of the Company as of
such dates and for the periods then ended.
SECTION 3.8. Absence of Undisclosed Liabilities. To the knowledge of
Holdings, except for matters relating to the transactions contemplated by this
Agreement, there are no liabilities or financial obligations of the Company or
any of its Subsidiaries that are required to be reflected on a balance sheet
prepared in accordance with GAAP, other than liabilities and obligations (a)
provided for or reserved against in the Financial Statements, (b) arising after
December 31, 1999 in the ordinary course of business, (c) which would not have a
Material Adverse Effect, or (d) disclosed in Section 3.8 of the Disclosure
Schedule.
SECTION 3.9. Absence of Certain Changes. Except as disclosed in Section
3.9 of the Disclosure Schedule, since December 31, 1999, neither the Company nor
any of its Subsidiaries has (a) suffered any change in its business, operations
or financial position, except such changes which, in the aggregate would not
have a Material Adverse Effect or changes which relate to the wire harness
industry or the economy in general, (b) conducted its business in any material
respect not in the ordinary and usual course, (c) except in the ordinary course
of business, incurred any long-term indebtedness for borrowed money or issued
any debt securities or assumed, guaranteed or endorsed the obligations of any
other person except for obligations of its Subsidiaries, or (d) except in the
ordinary course of business, (i) sold, transferred or otherwise disposed of any
of its material property or assets or (ii) mortgaged or encumbered any of its
material property or assets.
SECTION 3.10. Litigation. Except (a) as set forth in Section 3.10 of
the Disclosure Schedule, (b) for claims under workers' compensation or similar
laws, (c) for routine claims for employee benefits and (d) for claims for money
damages alone of less than $100,000, there is no action, suit or proceeding
("Litigation") pending or, to the knowledge of Holdings, threatened against the
Company or any of its Subsidiaries before any court, arbitrator or
administrative or
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governmental body which, if determined adversely, would have a
Material Adverse Effect. Neither the Company nor any of its Subsidiaries is in
default under any judgment, decree, injunction or order of any court,
governmental department, commission, agency, instrumentality or arbitrator
outstanding against the Company or any of its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect.
SECTION 3.11. Real Property; Liens and Encumbrances.
(a) Section 3.11 of the Disclosure Schedule contains a
complete and accurate list of all real property owned or leased by the Company
or its Subsidiaries as of the date hereof.
(b) Except as set forth in Section 3.11 of the Disclosure
Schedule, all properties and assets owned by the Company and its Subsidiaries
are free and clear of all liens, pledges, security interests, mortgages, rights
of first refusal and other burdens (collectively, "Liens") except (i) statutory
Liens not yet delinquent or the validity of which are being contested in good
faith by appropriate actions, (ii) purchase money Liens arising in the ordinary
course, (iii) Liens arising as a matter of law relating to current Taxes not yet
due, (iv) Liens reflected in the financial statements of the Company (which have
not been discharged) and (v) Liens which in the aggregate do not materially
detract from the value or, in the case of personal property, materially impair
the use by the Company or any of its Subsidiaries of properties or assets
subject thereto or, in the case of real property, materially impair the present
and continued use in the usual and normal conduct of the business of the Company
and its Subsidiaries.
SECTION 3.12. Certain Agreements. Except as described in Section 3.12
of the Disclosure Schedule, neither the Company nor any of its Subsidiaries is a
party to any written agreement with any officer, director or employee of the
Company or any of its Subsidiaries (a) the benefits of which are contingent, or
the terms of which are materially altered, upon the occurrence of a transaction
involving the Company of the nature of any of the transactions contemplated by
this Agreement, (b) providing severance benefits or other benefits after the
termination of employment regardless of the reason for such termination of
employment, or (c) any of the benefits of which will be increased, or the
vesting of benefits of which will be accelerated, by the occurrence of any of
the transactions contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement. Except as disclosed in Section 3.12 of the
Disclosure Schedule, neither the Company nor any of its Subsidiaries is a party
to any written (i) agreement, contract, indenture or other instrument relating
to the borrowing of money or the guarantee of any obligation for the borrowing
of money or (ii) other contract, agreement or commitment of the Company or any
of its Subsidiaries material to the operations of the Company or any of its
Subsidiaries. Neither the Company nor any of its Subsidiaries is in default
under any of the agreements, contracts or obligations described in Section 3.12
of the Disclosure Schedule, except such defaults which, in the aggregate, would
not have a Material Adverse Effect. Except as set forth in Section 3.12 of the
Disclosure Schedule, no consent is required under any contract or agreement
listed on Section 3.12 of the Disclosure Schedule in connection with the
consummation of the transactions contemplated by this Agreement except for
consents which the failure to obtain would not have a Material Adverse Effect.
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SECTION 3.13. Employee Benefit Plans.
(a) Section 3.13(a) of the Disclosure Schedule sets forth a
true and complete list of each "employee benefit plan" (within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) that is maintained or contributed to by the Company or any of its
Subsidiaries ("Employee Benefit Plans") as of the date of this Agreement.
(b) Section 3.13(b) of the Disclosure Schedule sets forth a
true and complete list of all collective bargaining agreements, all material
employment or individual compensation agreements, and all bonus or other
incentive compensation, change in control, deferred compensation, salary
continuation, severance or employer stock agreements, policies or arrangements,
for which the Company or any of its Subsidiaries maintains or has any obligation
(other than Employee Benefit Plans) with respect to the employment or
termination of employment of any employee of the Company or its Subsidiaries
("Employee Arrangements").
(c) Except as disclosed in Section 3.13(c) of the Disclosure
Schedule, neither the Company nor any of its Subsidiaries maintains or
contributes to, or on or after the date which is six years prior to the date of
this Agreement has maintained or contributed to, any defined benefit plans
covered by Title IV of ERISA.
SECTION 3.14. Taxes. Except as set forth in Section 3.14 of the
Disclosure Schedule:
(a) The Company and each of its Subsidiaries, and each
affiliated group (within the meaning of Section 1504 of the Code) of which the
Company or any of its Subsidiaries is or has been a member, (A) have timely
filed (or there has been timely filed on their behalf, or timely extensions have
been filed or filed on their behalf as permitted by and in accordance with the
Code) with the appropriate Governmental Authority all Tax Returns required to be
filed, and all such Tax Returns are true, complete and correct, and (B) have
paid all Taxes due and payable or claimed or asserted by any taxing authority to
be due, from or with respect to them, or have provided for all such Taxes on
their books and records and in accordance with GAAP, including without
limitation in the Financial Statements. With respect to any period for which Tax
Returns have not yet been filed, or for which Taxes are not yet due or owing,
the Company and its Subsidiaries, as the case may be, have made due and
sufficient current accruals for such Taxes in their books and records in
accordance with GAAP, including without limitation the Financial Statements.
Each of the Company and its Subsidiaries has made (or there has been made on its
behalf) all required current estimated Tax payments sufficient to avoid any
understatement penalties;
(b) There are no outstanding agreements extending the
statutory period of limitation applicable to any claim for, or the period for
the collection or assessment of, Taxes due from the Company or its Subsidiaries
for any taxable period; and
(c) No audit report has been issued in the five years prior to
the date of this Agreement (or otherwise with respect to any audit or
investigation in progress) relating to Taxes due from or with respect to the
Company or any of its Subsidiaries, their respective
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incomes, assets or operations. All Tax Returns filed in respect of Taxes for
which the Company or any of its Subsidiaries is liable have been examined by the
relevant taxing authority, or the applicable statute of limitations on
assessment with respect to such Tax Returns has expired. Holdings or the Company
has previously delivered to Buyer true and complete copies of (A) any audit
reports issued in the five years prior to the date of this Agreement relating to
the United States federal, state, local or foreign Taxes due from or with
respect to the Company or any of its Subsidiaries; (B) the United States federal
Tax Returns, and those state, local, and foreign Tax Returns showing Taxes due
in excess of $5,000, for all taxable periods ending in 1996, 1997, 1998 and 1999
filed by the Company and each of its Subsidiaries; and (C) the portions of all
federal, state, local or foreign consolidated, combined or unitary Tax Returns
which relate to the Company or any of its Subsidiaries showing Taxes due in
excess of $5,000, for all taxable periods ending in 1996, 1997, 1998 and 1999
filed by any affiliated, consolidated, combined, or unitary group of which the
Company or such Subsidiary was then a member;
(d) No claim has been made to the effect that Company or any
of its Subsidiaries is or may be subject to taxation by a jurisdiction in which
it does not file Tax Returns;
(e) All deficiencies asserted or assessments made as a result
of any examinations by the Internal Revenue Service or any other taxing
authority of the Tax Returns of, or covering or including the Company or any of
its Subsidiaries, have been fully paid, and except for the audit being conducted
by the District Director of Internal Revenue at Indianapolis, Indiana (E:QMB) in
respect of Kirland Indiana, Limited Partnership and the partners thereof, there
are no other actions, suits, investigations, audits or claims by any taxing
authority in progress relating to the Company or any or its Subsidiaries or the
business of the Company or any of its Subsidiaries, nor has the Company or any
of its Subsidiaries, or any of their respective shareholders, directors or
officers received any written notice from any taxing authority that it intends
to conduct such an audit or investigation. No issue has been raised by written
inquiry of a domestic or foreign federal, state or local taxing authority in any
current or prior examination which, by application of the same principles, would
reasonably be expected to result in a proposed deficiency for any subsequent
taxable period. Neither the Company nor any of its Subsidiaries is subject to
any private letter ruling of the Internal Revenue Service or comparable rulings
of other taxing authorities;
(f) There are no liens for Taxes upon the assets of the
Company or any of its Subsidiaries, except for liens arising as a matter of law
relating to current Taxes not yet due;
(g) All Taxes that the Company or any of its Subsidiaries has
been or is required by law to withhold or to collect for payment have been duly
withheld and collected, and have been paid over to the appropriate Governmental
Authority or accrued, reserved against and entered on the books and records of
the Company or the Subsidiary, as the case may be, in accordance with GAAP,
including without limitation the Financial Statements;
(h) None of Holdings or its Affiliates, the Company or any of
its Subsidiaries, or any other person on behalf of the Company or any of its
Subsidiaries has (A) agreed to or is required to make any adjustments pursuant
to Section 481(a) of the Code (or any predecessor provision) or any similar
provision of domestic or foreign state or local law by
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reason of a change in accounting methods initiated by the Company or any of its
Subsidiaries, or has any knowledge that the Internal Revenue Service or any
other taxing authority has proposed any such adjustment or change in accounting
methods; or has any application pending with any taxing authority requesting
permission for any changes in accounting methods that relate to the business or
operations of the Company or any of its Subsidiaries, (B) executed or entered
into a closing agreement pursuant to Section 7121 of the Code or any predecessor
provision thereof or any similar provision of domestic or foreign state or local
law with respect to the Company or any of its Subsidiaries, (C) filed a consent
pursuant to Section 341(f) of the Code or agreed to have Section 341(f)(2) of
the Code apply to any disposition of a subsection (f) asset (as such term is
defined in Section 341(f)(4) of the Code) owned by the Company or any of its
Subsidiaries, (D) extended the time (1) within which to file any Tax Return,
which Tax Return has since not been filed or (2) for the assessment or
collection of Taxes, which Taxes have not since been paid or (E) granted to any
person any power of attorney that is currently in force with respect to any Tax
matter relating to the Company or any of its Subsidiaries;
(i) No property owned by the Company or any of its
Subsidiaries (A) is property required to be treated as being owned by another
person pursuant to the provisions of Section 168(f)(8) of the Internal Revenue
Code of 1954, as amended and in effect immediately prior to the enactment of the
Tax Reform Act of 1986, (B) is "tax-exempt use property" within the meaning of
Section 168(h)(1) of the Code, (C) is "tax-exempt bond financed property" within
the meaning of Section 168(g) of the Code; (D) is subject to Section
168(g)(1)(A) of the Code; or (E) is subject to any provision of state, local or
foreign law comparable to any of the provisions listed above;
(j) There is no contract, plan or arrangement involving the
Company or any of its Subsidiaries and covering any person that, individually or
collectively, could give rise to the payment of any amount that would not be
deductible by Buyer, the Company or any of its Subsidiaries by reason of Section
280G or Section 162(m) of the Code;
(k) Neither the Company nor any of its Subsidiaries has any
elections in effect for federal income tax purposes under Section 108, 168, 338,
441, 472, 1017, 1033 or 4977 of the Code or under any similar provisions of
domestic or foreign state or local law;
(l) No assets of the Company or any of its Subsidiaries are
debt instruments, the interest on which is, or purports to be, excludable, in
whole or in part, from gross income for federal income tax purposes;
(m) Neither the Company nor any of its Subsidiaries is a party
to, bound by, or obligated under, any Tax Sharing Agreement;
(n) Neither the Company nor any of its Subsidiaries has
constituted either a "distributing corporation" or a "controlled corporation"
(within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of
stock qualifying for tax-free treatment under Section 355 of the Code (A) in the
two years prior to the date of this Agreement or (B) in a distribution which
could otherwise constitute part of a "plan" or "series of related transactions"
(within the meaning of Section 355(e) of the Code) in conjunction with the
transactions contemplated by this Agreement;
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(o) Neither the Company nor any of its Subsidiaries
constitutes or owns, directly or indirectly, an interest in a taxable mortgage
pool within the meaning of Section 7701(i) of the Code;
(p) Neither the Company nor any of its Subsidiaries is an
obligor on any indebtedness in respect of which the interest is intended to be
exempt from federal income tax to the holder of the debt obligation;
(q) The Company and each of its Subsidiaries are "United
States persons" within the meaning of Section 7701(a)(30) of the Code;
(r) Neither the Company nor any of its Subsidiaries is a
"United States real property holding corporation" within the meaning of Section
897 of the Code;
(s) No foreign subsidiary has any "investment in United States
property" within the meaning of Section 956 of the Code in the Company or any
domestic subsidiary; and
(t) No indebtedness of the Company nor of any of its
Subsidiaries is "corporate acquisition indebtedness" within the meaning of
Section 279(b) of the Code.
For purposes of this Section 3.14 and for Section 10.13, any reference to the
Company or any of its Subsidiaries shall be deemed to include any person which
merged with or was liquidated into the Company or such Subsidiary.
SECTION 3.15. Compliance with Applicable Law. Except as set forth in
Section 3.15 of the Disclosure Schedule, the businesses of the Company and its
Subsidiaries are not being conducted in violation of any provision of any
Federal, state, local or foreign statute, law, ordinance, rule, regulation,
judgment, decree, order, concession, grant, franchise, permit or license or
other governmental authorization or approval applicable to the Company or any of
its Subsidiaries, except such violations which, in the aggregate, would not have
a Material Adverse Effect.
SECTION 3.16. Brokers' Fees and Commissions. None of Holdings, the
Company and their respective directors, officers, employees or agents has
employed any investment banker, broker or finder in connection with the
transactions contemplated hereby.
SECTION 3.17. Proprietary Rights.
(a) Section 3.17 of the Disclosure Schedule contains a
complete and accurate list of (i) all material registered patents, trademarks,
copyrights, service marks and tradenames of the Company and its Subsidiaries and
(ii) all material patent and trademark applications of the Company or its
Subsidiaries which have been filed and are currently pending.
(b) Except as set forth in Section 3.17 of the Disclosure
Schedule, (i) the Company and its Subsidiaries own or possess adequate licenses
or other valid rights to use all United States and foreign patents, trademarks,
trade names, service marks, copyrights and applications therefor which are
material to the conduct of the business of the Company and its Subsidiaries
taken as a whole (the "Patent and Trademark Rights"), (ii) as of the date of
this
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Agreement, the validity of the Patent and Trademark Rights and the title thereto
of the Company or any Subsidiary are not being questioned in any litigation to
which the Company or any Subsidiary is a party, nor to the knowledge of
Holdings, is any such litigation threatened and (iii) as of the date of this
Agreement, to the knowledge of Holdings, the conduct of the business of the
Company and its Subsidiaries as now conducted does not conflict with any valid
patents, trademarks, trade name, service marks or copyrights of others in any
way which would have a Material Adverse Effect.
SECTION 3.18. Labor Relations. Except as listed or described in Section
3.18 of the Disclosure Schedule, the Company and its Subsidiaries have no unfair
labor practice charges or complaints pending or, to the knowledge of Holdings,
threatened against any of them before the National Labor Relations Board. There
is no labor strike pending or, to the knowledge of Holdings, threatened against
the Company or any of its Subsidiaries.
SECTION 3.19. Insurance. All material insurance policies (the
"Insurance Policies") with respect to the property, assets, operations and
business of the Company and its Subsidiaries are listed in Section 3.19 of the
Disclosure Schedule and are in full force and effect. Except as set forth in
Section 3.19 of the Disclosure Schedule, as of the date of this Agreement, there
are no pending material claims against the Insurance Policies by the Company or
any of its Subsidiaries as to which the insurers have denied liability. Holdings
makes no representation or warranty that such insurance will be continued or is
continuable after the Closing.
SECTION 3.20. Environmental Matters. Except as disclosed on Section
3.20 of the Disclosure Schedule or in the Environmental Reports delivered to
Buyer:
(a) the operations of the Company and its Subsidiaries are in
compliance with all applicable Environmental Laws, except for non-compliance
which, individually or in the aggregate, would not have a Material Adverse
Effect;
(b) each of the Company and its Subsidiaries has obtained all
permits, licenses and other authorizations that are required under applicable
Environmental Laws ("Environmental Permits") to conduct their businesses except
where the failure to possess such Environmental Permits, in the aggregate, would
not have a Material Adverse Effect;
(c) no judicial or administrative proceedings or
investigations are pending or, to the knowledge of Holdings, threatened against
the Company or its Subsidiaries and no written notice, citation, summons or
order has been delivered to the Company or its Subsidiaries by any Governmental
Authority pursuant to any applicable Environmental Laws (collectively,
"Environmental Claims"), except for such Environmental Claims which, in the
aggregate, would not have a Material Adverse Effect;
(d) all real property owned, operated or leased by the Company
or its Subsidiaries is free from contamination that would have a Material
Adverse Effect;
(e) no real property currently (or to the knowledge of
Holdings, formerly) owned, operated or leased by the Company or its Subsidiaries
is listed or has been proposed for listing on the National Priorities List, the
Comprehensive Environmental Response Compensation and Liability and Information
System ("CERCLIS") or any analogous state lists;
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(f) there are not now on, in or under any real property owned,
leased or operated by the Company or its Subsidiaries (i) any underground
storage tanks ("USTs"), (ii) any asbestos-containing materials ("ACMs"), or
(iii) any polychlorinated biphenyls ("PCBs"), except for such USTs, ACMs or
PCBs, the presence of which would have a Material Adverse Effect; and
(g) there have been no environmental investigations, studies,
audits, tests, reviews or other analyses conducted by Holdings or the Company in
relation to any real property owned or leased by the Company or its Subsidiaries
that have not been made available to Buyer.
ARTICLE IV
REPRESENTATIONS AND
WARRANTIES OF BUYER
Buyer hereby represents and warrants to Holdings as set forth
below:
SECTION 4.1. Organization and Qualification. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, with all requisite corporate power and
authority to own, lease and operate its properties and to carry on its
businesses as now being conducted, except where the failure to be so organized,
existing and in good standing or to have such power or authority would not, in
the aggregate, have a Material Adverse Effect. Buyer is qualified or licensed to
do business and is in good standing in each jurisdiction in which the ownership
or leasing of property by it or the conduct of its business requires such
licensing or qualification, except where the failure to be so qualified or
licensed would not, in the aggregate, have a Material Adverse Effect.
SECTION 4.2. Authorization. Buyer has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. No other corporate proceeding on the part of
Buyer is necessary to authorize the execution and delivery of this Agreement or
to consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by Buyer and constitutes a valid and binding
obligation of Buyer, enforceable against it in accordance with its terms, except
to the extent that such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally, and the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
SECTION 4.3. No Violation. Neither the execution and delivery of this
Agreement by Buyer and the performance by Buyer of its obligations hereunder nor
the consummation by Buyer of the transactions contemplated hereby will (a)
violate, conflict with or result in any breach of any provision of the
Certificate or Articles of Incorporation or Bylaws of Buyer, (b) violate,
conflict with or result in a violation or breach of, or constitute a default
(with or without due notice or lapse of time or both) under the terms,
conditions or provisions of any note, bond, mortgage, indenture or deed of
trust, or any material license, lease or agreement to which Buyer or any of
Buyer's Subsidiaries is a party or (c) violate any order, writ, judgment,
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injunction, decree, statute, rule or regulation of any court or domestic or
foreign Governmental Authority applicable to Buyer or any of Buyer's
Subsidiaries, except such defaults and violations which, in the aggregate, would
not have a Material Adverse Effect.
SECTION 4.4. Consents and Approvals. No filing or registration with, no
notice to and no permit, authorization, consent or approval of any third party
or any Governmental Authority is necessary for the consummation by Buyer of the
transactions contemplated by this Agreement other than (a) consents and
approvals of or filings or registrations with the DOJ pursuant to the HSR Act,
(b) requirements of federal and state securities laws and (c) consents,
registrations, approvals, authorizations, permits, filings or notifications
which, in the aggregate, would not have a Material Adverse Effect.
SECTION 4.5. Purchase for Investment. Buyer is acquiring the Shares for
its own account for investment purposes and not with a view to the distribution
of the Shares. Buyer has such knowledge and experience in financial and business
matters so as to be capable of evaluating the merits and risks of its investment
in the Shares. Buyer is an "accredited investor" as defined in Rule 501 of the
Securities Act. Buyer will not, directly or indirectly, dispose of the Shares
except in compliance with applicable federal and state securities laws.
SECTION 4.6. Financing. Buyer has sufficient funds available to
satisfy, among other things, the obligation to pay (a) the Purchase Price and
(b) all expenses incurred by Buyer in connection with the transactions
contemplated hereby.
ARTICLE V
COVENANTS
SECTION 5.1. Conduct of Business of the Company Prior to the Closing.
Except as contemplated by this Agreement, as set forth in Section 5.1 of the
Disclosure Schedule or with the prior written consent of Buyer (which consent
shall not be unreasonably withheld), during the period from the date of this
Agreement to the Closing, the Company will conduct its business and operations
according to the Company's ordinary and usual course of business and will use
all reasonable efforts consistent therewith to preserve intact the Company's
properties, assets and business organizations, to keep available the services of
the Company's officers and employees and to maintain satisfactory relationships
with customers, suppliers, distributors and others having commercially
beneficial business relationships with the Company, in each case in the ordinary
course of business. Without limiting the generality of the foregoing, and except
as otherwise provided in this Agreement, neither the Company nor any of its
Subsidiaries nor, with respect to clause (j) below, Holdings or any of its
affiliates, will, prior to the Closing, without the prior written consent of
Buyer (which consent shall not be unreasonably withheld):
(a) issue, sell or pledge, or authorize or propose the
issuance, sale or pledge of additional shares of capital stock of any class, or
securities convertible into any such shares, or any rights, warrants or options
to acquire any such shares or other convertible securities;
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(b) redeem, purchase or otherwise acquire any outstanding
shares of the capital stock of the Company or its Subsidiaries;
(c) propose or adopt any amendment to the Certificate or
Articles of Incorporation or Bylaws (or similar organizational documents) of the
Company or any of its Subsidiaries;
(d) except in the ordinary course of business, incur any
long-term indebtedness for borrowed money or issue any debt securities or
assume, guarantee or endorse the obligations of any other person except for
obligations of the Company's Subsidiaries;
(e) increase in any manner the rate or terms of compensation
of any of its directors, officers or other employees, except such increases as
are granted in the ordinary course of business;
(f) except in the ordinary course of business, (i) sell,
transfer or otherwise dispose of any of its material property or assets or (ii)
mortgage or encumber any of its material property or assets;
(g) enter into other material agreements, commitments or
contracts, except agreements, commitments or contracts made in the ordinary
course of business;
(h) declare, set aside or pay any dividend or other
distribution in respect of its capital stock, other than in cash in the ordinary
course of business in connection with Holdings and the Company's cash management
practices;
(i) except in the ordinary course of business or with respect
to capital projects approved prior to the date hereof, enter into any agreement
or commitment involving an aggregate capital expenditure or commitment exceeding
$100,000;
(j) change the accounting methods or principles of the Company
or any of its Subsidiaries (either for Tax or financial accounting purposes),
make or change any election concerning Taxes or Tax Returns of the Company or
any of its Subsidiaries, change an annual accounting period of the Company or
any of its Subsidiaries, file any amended Tax Return with respect to Taxes of
the Company or any of its Subsidiaries, enter into any closing agreement with
respect to Taxes of the Company or any of its Subsidiaries, settle any Tax claim
or assessment or surrender any right to claim a refund of Taxes with respect to
the Company or any of its Subsidiaries or obtain or enter into any Tax ruling,
agreement, contract, understanding, arrangement or plan relating to Taxes of the
Company or any of its Subsidiaries; or
(k) agree in writing to take any of the foregoing actions.
SECTION 5.2. Access to Information. Between the date of this Agreement
and the Closing Date, upon reasonable notice and at reasonable times without
significant disruption to the business of the Company, the Company will give
Buyer and its authorized representatives reasonable access to all offices and
other facilities, and to all books and records of the Company and will permit
Buyer to make and will fully cooperate with regard to such inspections as it may
reasonably require and will cause its officers to furnish Buyer such financial
and operating data
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and other information with respect to the business and properties of the Company
as Buyer may from time to time reasonably request.
SECTION 5.3. All Reasonable Efforts. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use all
reasonable efforts to take, or cause to be taken, all action, and to do, or
cause to be done as promptly as practicable, all things necessary, proper and
advisable under applicable laws and regulations to consummate and make effective
as promptly as practicable the transactions contemplated by this Agreement. If
at any time after the Closing any further action is necessary or desirable to
carry out the purposes of this Agreement, including, without limitation, the
execution of additional instruments, the proper officers and directors of each
party to this Agreement shall take all such necessary action.
SECTION 5.4. Consents and Approvals. The parties hereto each will
cooperate with one another and use all reasonable efforts to prepare all
necessary documentation (including, without limitation, furnishing all
information required under the HSR Act), to effect promptly all necessary
filings and to obtain all necessary permits, consents, approvals, orders and
authorizations of, or any exemptions by, all third parties and Governmental
Authorities necessary to consummate the transactions contemplated by this
Agreement. Each party will keep the other parties apprised of the status of any
inquiries made of such party by the DOJ or any other Governmental Authority or
members of their respective staffs with respect to this Agreement or the
transactions contemplated hereby. Buyer and Holdings shall each pay one-half of
the required filing fees under the HSR Act.
SECTION 5.5. Public Announcements. Buyer and Holdings will consult with
each other and will mutually agree (the agreement of each party not to be
unreasonably withheld) upon the content and timing of any press release or other
public statements with respect to the transactions contemplated by this
Agreement and shall not issue any such press release or make any such public
statement prior to such consultation and agreement, except as may be required by
applicable law or by obligations pursuant to any listing agreement with any
securities exchange or any stock exchange regulations; provided, however, that
Buyer and Holdings will give prior notice to the other party of the content and
timing of any such press release or other public statement required by
applicable law or by obligations pursuant to any listing agreement with any
securities exchange or any stock exchange regulations.
SECTION 5.6. Notification by Holdings. From time to time prior to the
Closing, Holdings shall deliver to Buyer written notice of any event or
development that would (i) render any representation or warranty of Holdings in
this Agreement (including the Disclosure Schedule) inaccurate in any material
respect or (ii) constitute or result in a breach by Holdings of, or a failure by
Holdings to comply with, any agreement or covenant in this Agreement applicable
to it. Any disclosure made by Holdings pursuant to clause (i) of the prior
sentence shall not be deemed to amend or supplement the Disclosure Schedule and
shall not be given any effect for purposes of Article VI.
SECTION 5.7. No Implied Representations or Warranties. Buyer hereby
acknowledges and agrees that neither Holdings nor the Company is making any
representation or warranty whatsoever, express or implied, except those
representations and warranties of Holdings explicitly set forth in this
Agreement or in the Disclosure Schedule or in any certificate
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contemplated hereby and delivered by Holdings in connection herewith. Except as
explicitly set forth herein, none of Holdings, the Company, its Subsidiaries, or
any of the respective officers, directors, partners, employees, affiliates or
representatives, as the case may be, of Holdings, the Company, or the Company's
Subsidiaries has made or is making any representation, express or implied, as to
the value of any asset or business being so acquired, or any warranty of
merchantability, suitability or fitness for a particular purpose or quality,
with respect to any of the tangible assets being so acquired, or as to the
condition or workmanship thereof, or as to the absence of any defects therein,
whether latent or patent.
SECTION 5.8. Intercompany Obligations. Effective upon the Closing, all
intercompany obligations and accounts among Holdings and its Subsidiaries (other
than the Company and its Subsidiaries), on the one hand, and the Company and its
Subsidiaries, on the other hand, except for ordinary trade payables of the
Company and its Subsidiaries to Holdings or any of its Subsidiaries (which shall
continue to be paid by the Company and its Subsidiaries in the ordinary course
of business), will be voided, cancelled and terminated. Any holder of a note or
other evidence of indebtedness, obligation or account, if any, that is deemed
voided, cancelled and terminated in accordance with this Section 5.8 shall
surrender such note or other evidence, if any, to the obligor thereon.
SECTION 5.9. Release of Guarantees. Prior to the Closing, the Company
and its Subsidiaries shall be removed as guarantors under (i) the Credit
Agreement, (ii) the Indenture, dated as of June 12, 1995, among International
Wire Group, Inc., as Issuer, the Subsidiary Guarantors and The Bank of New York
(as successor to IBJ Schroder Bank and Trust Company), as Trustee, (iii) the
Indenture, dated as of February 12, 1997, among International Wire Group, Inc.,
as Issuer, the Subsidiary Guarantors and The Bank of New York (as successor to
IBJ Schroder Bank and Trust Company), as Trustee, and (iv) the Indenture, dated
as of June 17, 1997, among International Wire Group, Inc., as Issuer, the
Subsidiary Guarantors and The Bank of New York (as successor to IBJ Schroder
Bank and Trust Company), as Trustee (items (ii) through (iv) are collectively
referred to as the "Indentures").
SECTION 5.10. Further Assurances Holdings hereby covenants and agrees
that, to the extent that there are any assets used or useful in the business
conducted by the Company on the date of this Agreement that are not held by the
Company or any of its Subsidiaries as of the Closing, Holdings shall take all
action as is necessary or desirable to transfer those assets to Buyer following
Closing.
ARTICLE VI
CLOSING CONDITIONS
SECTION 6.1. Conditions to Each Party's Obligations under this
Agreement. The respective obligations of each party under this Agreement shall
be subject to the fulfillment at or prior to the Closing of the following
conditions:
(a) Any waiting period applicable to the consummation of the
transactions contemplated hereby under the HSR Act shall have expired or been
terminated;
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(b) No injunction, restraining order or other ruling or order
issued by any court of competent jurisdiction or Governmental Authority or other
legal restraint or prohibition preventing the consummation of the transactions
contemplated hereby shall be in effect;
(c) The Company will have received the opinion of Morgan
Stanley & Co. Incorporated, to the effect that the transactions contemplated by
this Agreement are fair, from a financial point of view, to Holdings;
(d) Buyer will have received the opinion of Credit Suisse
First Boston Corporation, to the effect that the transactions contemplated by
this Agreement are fair, from a financial point of view, to Buyer's sole
stockholder; and
(e) The Company's registration statement on Form S-1, relating
to the initial public offering of the Company's common stock, par value $.01 per
share, shall be effective.
SECTION 6.2. Conditions to the Obligations of Buyer under this
Agreement. The obligations of Buyer under this Agreement shall be further
subject to the satisfaction, at or prior to the Closing, of the following
conditions:
(a) Each of the obligations of Holdings and the Company
required to be performed by them at or prior to the Closing pursuant to this
Agreement shall have been duly performed and complied with in all material
respects, and the representations and warranties of Holdings contained in this
Agreement shall be true and correct in all material respects as of the date of
this Agreement and as of the Closing as though made at and as of the Closing
(except as to any representation or warranty which specifically relates to an
earlier date), and Buyer shall have received a certificate to that effect signed
by an officer of Holdings;
(b) Any and all permits, consents, waivers, clearances,
approvals and authorizations of all third parties and Governmental Authorities
that are necessary or advisable in connection with the consummation of the
transactions contemplated hereby shall have been obtained, other than items
which, if not obtained, would not have a Material Adverse Effect;
(c) Holdings shall provide the Buyer with a copy of statements
issued by the Company and each of its Subsidiaries pursuant to Treasury
Regulation Section 1.897-2(h), certifying that the Common Stock is not a U.S.
real property interest; and
(d) The Company and each of its Subsidiaries shall have
terminated all Tax Sharing Agreements.
SECTION 6.3. Conditions to the Obligations of Holdings under this
Agreement. The obligations of Holdings under this Agreement shall be further
subject to the satisfaction, at or prior to the Closing, of the following
conditions:
(a) Each of the obligations of Buyer required to be performed
by it at or prior to the Closing pursuant to the terms of this Agreement shall
have been duly performed and complied with in all material respects, and the
representations and warranties of Buyer contained in this Agreement shall be
true and correct in all material respects as of the date of this
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Agreement and as of the Closing Date as though made at and as of the Closing
Date (except as to any representation or warranty which specifically relates to
an earlier date), and Holdings shall have received a certificate to that effect
signed by an officer of Buyer; and
(b) Any and all permits, consents, waivers, clearances,
approvals and authorizations of all Governmental Authorities which are necessary
in connection with the consummation of the transactions contemplated hereby
shall have been obtained, other than items which, if not obtained, would not
have a Material Adverse Effect.
ARTICLE VII
CLOSING
SECTION 7.1. Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of Weil, Gotshal
& Manges LLP, 100 Crescent Court, Suite 1300, Dallas, Texas 75201, subject to
the satisfaction or waiver of the conditions set forth in Article VI, on the
later of March 29, 2000 or two business days after the receipt of all requisite
governmental approvals, or at such other time and place and on such other date
as Buyer and Holdings shall agree (the "Closing Date"). At the Closing:
(a) Holdings shall deliver or cause to be delivered to Buyer
the following:
(i) the certificate described in Section 6.2(a);
(ii) a certificate or certificates representing all
of the Shares in appropriate form for transfer to Buyer duly endorsed in blank
or accompanied by stock powers duly executed in blank;
(iii) all documents, including without limitation,
executed UCC-3 termination statements, as are necessary to release all liens on
the Company's assets, the Shares and the capital stock and assets of the
Company's Subsidiaries which secure the Senior Debt;
(iv) resignations of directors of the Company and
each Subsidiary listed in Section 7.1(a)(iv) of the Disclosure Schedule;
(v) Termination and Release Agreements releasing the
Company and its Subsidiaries from the Credit Agreement and the Indentures;
(vi) UCC-3 Financing Statements evidencing the
release of the rights, liens and security interests of the Company and its
Subsidiaries under the Credit Agreement and the Indentures; and
(vii) all other previously undelivered documents
required to be delivered by Holdings to Buyer at or prior to the Closing
pursuant to the terms of this Agreement.
(b) Buyer shall deliver or cause to be delivered to Holdings
the following:
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(i) the certificate described in Section 6.3(a); and
(ii) all other previously undelivered documents
required to be delivered by Buyer to Holdings at or prior to the Closing
pursuant to the terms of this Agreement.
(c) Buyer shall pay to Holdings, by wire transfer of
immediately available funds to an account or accounts designated by Holdings in
writing at least two business days prior to the Closing Date, the Purchase
Price.
ARTICLE VIII
SURVIVAL AND INDEMNIFICATION
SECTION 8.1. Survival of Representations and Warranties. The
representations and warranties of Holdings contained in this Agreement other
than those contained in Section 3.14 shall not survive the Closing.
SECTION 8.2. Indemnification.
(a) For purposes of this Agreement, (i) "Indemnity Payment"
means any amount of Indemnifiable Losses required to be paid pursuant to this
Agreement, (ii) "Indemnitee" means any person or entity entitled to
indemnification under this Agreement, (iii) "Indemnifying Party" means any
person or entity required to provide indemnification under this Agreement, (iv)
"Indemnifiable Losses" means any and all damages, losses, liabilities,
obligations, Taxes, costs and expenses, and any and all claims, demands or suits
(by any person or entity, including without limitation any Governmental
Authority), including without limitation the costs and expenses of any and all
actions, suits, proceedings, demands, assessments, judgments, settlements and
compromises relating thereto and including reasonable attorneys' fees and
expenses in connection therewith, and (v) "Third Party Claim" means any claim,
action or proceeding made or brought by any person or entity who or which is not
a party to this Agreement or an affiliate of a party to this Agreement.
(b) Holdings agrees to indemnify, defend and hold harmless
Buyer and its affiliates and their respective directors, officers, partners,
employees, agents and representatives from and against any and all Indemnifiable
Losses to the extent relating to, resulting from or arising out of:
(i) any breach or nonfulfillment of any agreement or
covenant of Holdings under the terms of this Agreement;
(ii) current and future product liability claims
filed against the Company by Whirlpool Corporation ("Whirlpool") with respect to
the facts and circumstances set forth in Case No. 97-2039-CK-T, relating to
certain wire harness products supplied to Whirlpool by the Company;
(iii) the Company's obligation to provide replacement
defrost heaters to General Electric Company ("GE") pursuant to Section 3 of that
certain Agreement,
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dated December 31, 1995, between GE and the Company; provided, however, that
Holdings shall only be required to indemnify Buyer for one-half of the first
$500,000 of Indemnifiable Losses under such provision of such agreement; and
(iv) all product liability claims related to the hose
assemblies manufactured by the Company.
(c) Buyer agrees to indemnify, defend and hold harmless
Holdings and its affiliates and their respective directors, officers, partners,
employees, agents or representatives from and against any and all Indemnifiable
Losses to the extent relating to, resulting from or arising out of any breach or
nonfulfillment of any agreement or covenant of Buyer under the terms of this
Agreement.
SECTION 8.3. Defense of Claims. Except as otherwise provided in Section
10.13:
(a) If any Indemnitee receives notice of assertion or
commencement of any Third Party Claim against such Indemnitee with respect to
which an Indemnifying Party is obligated to provide indemnification under this
Agreement, the Indemnitee will give such Indemnifying Party reasonably prompt
written notice thereof, but in any event not later than 30 calendar days after
receipt of such notice of such Third Party Claim. Such notice will describe the
Third Party Claim in reasonable detail, will include copies of all material
written evidence thereof and will indicate the estimated amount, if reasonably
practicable, of the Indemnifiable Loss that has been or may be sustained by the
Indemnitee. The Indemnifying Party will have the right to participate in, or, by
giving written notice to the Indemnitee, to assume, the defense of any Third
Party Claim at such Indemnifying Party's own expenses and by such Indemnifying
Party's own counsel (reasonably satisfactory to the Indemnitee), and the
Indemnitee will cooperate in good faith in such defense.
(b) If, within thirty calendar days after giving notice of a
Third Party Claim to an Indemnifying Party pursuant to Section 8.3(a), an
Indemnitee receives written notice from the Indemnifying Party that the
Indemnifying Party has elected to assume the defense of such Third Party Claim
as provided in the last sentence of Section 8.3(a), the Indemnifying Party will
not be liable for any legal expenses subsequently incurred by the Indemnitee in
connection with the defense thereof; provided, however, that if the Indemnifying
Party fails to take reasonable steps necessary to defend diligently such Third
Party Claim within thirty calendar days after receiving written notice from the
Indemnitee or if the Indemnifying Party has not undertaken fully to indemnify
the Indemnitee in respect of all Indemnifiable Losses relating to the matter,
the Indemnitee may assume its own defense, and the Indemnifying Party will be
liable for all reasonable costs or expenses paid or incurred in connection
therewith. Subject to Section 10.13(g) hereof, the Indemnifying Party will not
enter into any settlement of any Third Party Claim without the prior written
consent of the Indemnitee, which consent shall not be unreasonably withheld. If
a firm offer is made to settle a Third Party Claim without leading to liability
or the creation of a financial or other obligation on the part of the Indemnitee
for which the Indemnitee is not entitled to indemnification hereunder or any
other Material Adverse Effect on the Company and the Indemnifying Party desires
to accept and agree to such offer, the Indemnifying Party will give written
notice to the Indemnitee to that effect. If the Indemnitee
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fails to consent to such firm offer within ten calendar days after its receipt
of such notice, the Indemnitee may continue to contest or defend such Third
Party Claim and, in such event, the maximum liability of the Indemnifying Party
as to such Third Party Claim will not exceed the amount of such settlement
offer, plus costs and expenses paid or incurred by the Indemnitee through the
end of such ten calendar day period.
(c) A failure to give timely notice or to include any
specified information in any notice as provided in Sections 8.3(a) or 8.3(b)
will not affect the rights or obligations of any party hereunder except and only
to the extent that, as a result of such failure, any party which was entitled to
receive such notice was deprived of its right to recover any payment under its
applicable insurance coverage or was otherwise damaged as a result of such
failure.
(d) The Indemnifying Party will have a period of 30 calendar
days within which to respond in writing to any claim by an Indemnitee on account
of an Indemnifiable Loss which does not result from a Third Party Claim (a
"Direct Claim"). If the Indemnifying Party does not so respond within such 30
calendar day period, the Indemnifying Party will be deemed to have rejected such
claim, in which event the Indemnitee will be free to pursue such remedies as may
be available to the Indemnitee on the terms and subject to the provisions of
this Article VIII.
(e) If the amount of any Indemnifiable Loss, at any time
subsequent to the making of an Indemnity Payment, is reduced by recovery,
settlement or otherwise under or pursuant to any insurance coverage, or pursuant
to any claim, recovery, settlement or payment by or against any other entity,
the amount of such reduction, less any costs, expenses, premiums or taxes
incurred in connection therewith will promptly be repaid by the Indemnitee to
the Indemnifying Party. Upon making any Indemnity Payment the Indemnifying Party
will, to the extent of such Indemnity Payment, be subrogated to all rights of
the Indemnitee against any third party that is not an affiliate of the
Indemnitee in respect of the Indemnifiable Loss to which the Indemnity Payment
related; provided, however, that (i) the Indemnifying Party shall then be in
compliance with its obligations under this Agreement in respect of such
Indemnifiable Loss and (ii) until the Indemnitee recovers fully payment of its
Indemnifiable Loss, any and all claims of the Indemnifying Party against any
such third party on account of said Indemnity Payment will be subrogated and
subordinated in right of payment to the Indemnitee's rights against such third
party. Without limiting the generality or effect of any other provision hereof,
each such Indemnitee and Indemnifying Party will duly execute upon request all
instruments reasonably necessary to evidence and perfect the above-described
subrogation and subordination rights.
(f) With respect to a Third Party Claim for which Holdings is
the Indemnifying Party, Buyer shall, and shall cause each Indemnitee to, make
available to Holdings and its representatives all books and records of Buyer and
the Indemnitees relating to such Third Party Claim and shall render to Holdings
such assistance and access to records and the representatives of Buyer and the
Indemnitees as Holdings and its representatives may reasonably request, except
that Buyer shall not be required to make available to Holdings and its
representatives any books, records, documents or other information that Buyer
reasonably determines to be confidential or subject to attorney-client privilege
unless and until Holdings shall have entered into such agreements as Buyer
reasonably deem to be necessary in light of all surrounding circumstances
(including, without limitation, Holdings' need for information in
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connection with the investigation or defense of a Third Party Claim) to protect
such confidentiality or privilege.
SECTION 8.4. Adjustment to Purchase Price. Buyer and Holdings agree
that any Indemnity Payment hereunder shall be treated as an adjustment to the
Purchase Price.
SECTION 8.5. Exclusive Remedy. Buyer and Holdings agree that, to the
fullest extent permitted by law, the sole and exclusive remedy of Buyer and
Holdings after the Closing with respect to any claim or cause of action asserted
by Buyer or Holdings relating to or arising from breaches of the
representations, warranties or covenants of the other party contained in this
Agreement or any document, list, schedule, exhibit, certificate or other
instrument furnished or to be furnished by or on behalf of such other party or
any of its representatives in connection with the transactions contemplated by
this Agreement shall be limited to the rights of Buyer and Holdings under, and
shall be subject to the terms and conditions of, this Article VIII and Section
10.13 hereof.
ARTICLE IX
TERMINATION AND ABANDONMENT
SECTION 9.1. Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing:
(a) by mutual consent of Holdings and Buyer; or
(b) by either Holdings or Buyer:
(i) if a court of competent jurisdiction or
Governmental Authority shall have issued an order, decree or ruling or taken any
other action (which order, decree or ruling the parties hereto shall use their
best efforts to lift), in each case permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement, and such
order, decree, ruling or other action shall have become final and nonappealable;
or
(ii) if the Closing shall not have occurred on or
before June 30, 2000; provided, however, that (A) Buyer shall have the right, in
its sole discretion, to extend the time period in this Section 9.1(b)(ii) an
additional sixty days and (B) the right to terminate this Agreement shall not be
available to any party whose breach of this Agreement has been the cause of, or
resulted in, the failure of the Closing to occur on or before such date.
SECTION 9.2. Procedure and Effect of Termination. In the event of
termination and abandonment of the transactions contemplated hereby pursuant to
Section 9.1, written notice thereof shall forthwith be given to the other
parties to this Agreement and this Agreement shall terminate and the
transactions contemplated hereby shall be abandoned, without further action by
any of the parties hereto. If this Agreement is terminated as provided herein:
(a) upon request therefor, each party will redeliver all
documents, work papers and other material of any other party relating to the
transactions contemplated hereby, whether obtained before or after the execution
hereof, to the party furnishing the same; and
23
<PAGE> 28
(b) no party hereto shall have any liability or further
obligation to any other party to this Agreement resulting from such termination
except (i) that the provisions of this Section 9.2 and the proviso of Section
9.1(b)(ii) shall remain in full force and effect and (ii) no party waives any
claim or right against a breaching party to the extent that such termination
results from the breach by a party hereto of any of its representations,
warranties, covenants or agreements set forth in this Agreement.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Amendment and Modification. This Agreement may be
amended, modified or supplemented by a written instrument signed by the parties
hereto.
SECTION 10.2. Waiver of Compliance; Consents. Any failure of Buyer, on
the one hand, or of Holdings or the Company, on the other hand, to comply with
any obligation, covenant, agreement or condition contained herein may be waived
in writing by Holdings or Buyer, respectively, but such waiver or failure to
insist upon strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
other failure.
SECTION 10.3. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect.
SECTION 10.4. Expenses and Obligations. All costs and expenses incurred
in connection with the consummation of the transactions contemplated by this
Agreement by Buyer shall be paid by Buyer, and all costs and expenses incurred
in connection with the consummation of the transactions contemplated by this
Agreement by Holdings or the Company shall be paid by Holdings.
SECTION 10.5. Parties in Interest. This Agreement shall be binding upon
and, except as provided below, inure solely to the benefit of each party hereto,
and nothing in this Agreement, except as set forth below, express or implied, is
intended to confer upon any other person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
SECTION 10.6. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given upon the earlier of delivery
thereof if by hand or upon receipt if sent by mail (registered or certified,
postage prepaid, return receipt requested) or on the second next business day
after deposit if sent by a recognized overnight delivery service or upon
transmission if sent by telecopy or facsimile transmission (with request of
assurance of receipt in a manner customary for communication of such type) as
follows:
24
<PAGE> 29
(a) If to Buyer, to:
Viasystems International, Inc.
101 South Hanley Road
St. Louis, Missouri 63105
Attention: David J. Webster
Facsimile No.: (314) 746-2299
with a copy to:
Weil, Gotshal & Manges LLP
100 Crescent Court, Suite 1300
Dallas, Texas 75201
Attention: R. Scott Cohen
Facsimile No.: (214) 746-7777
(b) If to Holdings or the Company, to:
International Wire Group, Inc.
101 South Hanley Road, Suite 1075
St. Louis, Missouri 63015
Attention: David M. Sindelar
Facsimile No.: (314) 746-2299
and
Lewis, Rice & Fingersh
500 N. Broadway, Suite 2000
St. Louis, Missouri 63102-2147
Attention: John K. Pruellage
Facsimile No.: (314) 241-6056
SECTION 10.7. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Missouri without regard to
the conflicts-of-laws rules thereof.
SECTION 10.8. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
SECTION 10.9. Headings. The article and section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 10.10. Entire Agreement. This Agreement and the Disclosure
Schedule embody the entire agreement and understanding of the parties hereto in
respect of the subject matter contained herein or therein. There are no
agreements, representations, warranties or covenants other than those expressly
set forth herein or therein. This Agreement and the Disclosure Schedule
supersede all prior agreements and understandings between the parties with
respect to such subject matter.
SECTION 10.11. Assignment. This Agreement shall not be assigned by
operation of law or otherwise.
25
<PAGE> 30
SECTION 10.12. Jurisdiction and Venue. The parties hereto agree that
any suit, action or proceeding arising out of or relating to this Agreement
shall be instituted only in the United States District Court for the Eastern
District of Missouri, United States of America. Each party waives any objection
it may have now or hereafter to the laying of the venue of any such suit, action
or proceeding, and irrevocably submits to the jurisdiction of any such court in
any such suit, action or proceeding.
SECTION 10.13. Tax Matters.
(a) Holdings agrees to indemnify, defend and hold harmless
Buyer and its affiliates and their respective directors, officers, partners,
employees, agents and representatives from and against any and all Indemnifiable
Losses to the extent relating to, resulting from or arising out of:
(i) any Taxes with respect to any taxable period of
the Company or any of its Subsidiaries ending on or before the Closing Date;
(ii) any Taxes with respect to any taxable period of
the Company or any of its Subsidiaries beginning before and ending after the
Closing Date (a "Straddle Period") that are allocable pursuant to Section
10.13(b) to the portion of such Straddle Period ending on the Closing Date, but
only to the extent that the amount of such allocable Straddle Period Taxes
exceeds amounts accrued or reserved for current Taxes (but not deferred Taxes)
in the books and records of the Company and its Subsidiaries and in accordance
with GAAP;
(iii) any Taxes imposed on the Company or any of its
Subsidiaries attributable to any member of a consolidated or combined group
(other than the Company or any of its Subsidiaries) of which the Company or any
of its Subsidiaries is or was a member on or prior to the Closing Date and so
imposed pursuant to Treasury Regulation Section 1.1502-6(a) or any predecessor
or successor thereof or any analogous or similar state, local or foreign Law,
including without limitation, any liability for Taxes resulting from an
"intercompany transaction" in respect of which gain was deferred pursuant to
Treasury Regulations Section 1.1502-13(a)(2) (or any predecessor or successor
thereof or any analogous or similar provision under state, local or foreign
law), that occurred on or before the Closing Date, and those certain claims
asserted by the Internal Revenue Service arising out of or related to a Revenue
Agent's Report issued by the District Director of Internal Revenue at
Indianapolis, Indiana (E:QMB) under letter dated October 4, 1999 in respect of
Kirtland Indiana, Limited Partnership and the partners thereof; and
(iv) any Tax Sharing Agreement in effect on or prior
to the Closing Date.
Notwithstanding the foregoing, Holdings shall have no indemnification
obligations hereunder in respect of any Taxes attributable to any operations,
actions or transactions of or with respect to the Company or any of its
Subsidiaries which occur or are deemed to occur after the Closing Date.
26
<PAGE> 31
(b) Taxes shall be allocated to the portion of a Straddle
Period ending on the Closing Date for purposes of Section 10.13(a)(ii) by
closing the books of the Company as of the Closing Date, or where not
susceptible to such method of allocation, on the basis of the ratio of the
number of elapsed days in the period through the Closing Date to the total
number of days in the period; provided, however, that property Taxes whose lien
date occurs on or prior to the Closing Date shall be allocated to the portion of
the Straddle Period ending on the Closing Date.
(c) Buyer will promptly notify Holdings of the commencement of
any claim, audit, examination, or other proposed change or adjustment by any
taxing authority concerning any Taxes or other Indemnified Losses covered by
Section 10.13(a) ("Tax Claim"). Holdings shall control the strategy, defense and
settlement of any Tax audit or administrative or court proceeding relating to
Taxes of the Company or any of its Subsidiaries subject to indemnification under
Section 10.13(a), including but not limited to extension of the applicable
statute of limitations, at its own expense; provided, however, that Buyer shall
be permitted to participate, at its own expense, in such Tax Claim, audit or
administrative or court proceeding to the extent any aspect thereof affects
Buyer, the Company or its Subsidiaries, and provided, further, that, no
settlement shall be made by Holdings which may reasonably be expected to
materially increase the liability of Buyer, the Company or any of its
Subsidiaries in a taxable period ending after the Closing Date without the prior
written consent of Buyer, which consent will not be unreasonably withheld.
Holdings shall promptly notify Buyer in writing if Holdings decides not to
participate in the defense of any such Tax Claim, Tax audit or administrative or
court proceeding and Buyer thereupon shall be permitted to defend such Tax
Claim, Tax audit or proceeding, provided, however, that no settlement shall be
made by Buyer without the prior written consent of Holdings, which consent shall
not be unreasonably withheld, and Buyer shall keep Holdings duly informed of the
progress thereof. Holdings will promptly notify Buyer in writing of the
commencement of any claim, audit, examination, or other proposed change or
adjustment by any taxing authority which may affect the liability of Buyer, the
Company or any of its Subsidiaries for Taxes, Holdings shall keep Buyer duly
informed of the progress thereof, and no settlement shall be made thereto
without the prior written consent of Buyer, which consent shall not be
unreasonably withheld.
(d) Any claim for indemnification under Section 10.13(a) may
be made at any time prior to the expiration of the applicable Tax statute of
limitations with respect to the relevant taxable period (including all periods
of extension, whether automatic or permissive).
(e) Holdings and its affiliates and the Company and its
Subsidiaries shall make appropriate arrangements to settle all amounts due to or
due from the Company or any of the Company's Subsidiaries pursuant to any Tax
Sharing Agreement on or prior to the Closing Date. After the Closing Date, none
of the Company or its Subsidiaries shall be a party to or have any further
obligations or rights under any Tax Sharing Agreement, which shall be terminated
as between such parties on the Closing Date.
(f) Holdings shall prepare or cause to be prepared, in a
manner consistent with prior practice and in accordance with applicable law, all
Tax Returns of the Company and its Subsidiaries with respect to all taxable
periods ending on or before the Closing Date and all Seller Consolidated Returns
(the "Seller Returns"), and Holdings shall remit (or cause to be remitted) any
Taxes due with respect to such Seller Returns. Buyer shall be responsible for
27
<PAGE> 32
causing the Company and its Subsidiaries to prepare and file all Tax Returns,
other than Seller Consolidated Returns, required to be filed by any of the
Company or its Subsidiaries with respect to Straddle Periods ("Straddle
Returns"). After the Closing, Buyer shall cause the Company and its Subsidiaries
to timely file any of the Seller Returns which are not Seller Consolidated
Returns. Buyer shall provide Holdings with the opportunity to review and comment
upon the Straddle Returns at least ten business days prior to the filing
thereof.
(g) None of Buyer, the Company or its Subsidiaries shall file
any amended Tax Return which may give rise to a claim for indemnification
hereunder without the prior written consent of Holdings, which consent shall not
be unreasonably withheld. Holdings shall have authority to make all decisions
with respect to matters relating to any Seller Consolidated Return, including,
but not limited to, decisions to amend a Seller Consolidated Return, to extend
the statutes of limitations with respect to any periods covered by a Seller
Consolidated Return, make any election with respect to Seller Consolidated
Returns and to concede, settle, compromise or contest any adjustment asserting
by a taxing authority with respect to a Seller Consolidated Return; provided,
however, that Holdings shall act in a manner consistent with prior practice and
in accordance with applicable law; and provided, further, that Holding shall
take no action under this clause (g) which may reasonably be expected to
materially increase the liability of Buyer, the Company or any of its
Subsidiaries in a taxable period ending after the Closing Date without the prior
written consent of Buyer, which consent shall not be unreasonably withheld.
(h) Holding and Buyer will cooperate with one another in
connection with the preparation and filing of Seller Returns other than Seller
Consolidated Returns and Straddle Returns and for the defense or settlement of
any audit or administrative proceeding relating to Taxes and will provide each
other with access, at any reasonable time and from time to time, at the business
location at which the books and records are maintained, after the Closing Date,
to such Tax data relating to the Company or its Subsidiaries as Holdings or
Buyer, as the case may be, may from time to time reasonably request (including
the relevant portions of Seller Consolidated Returns).
(i) Holdings shall be entitled to receive and to retain any
and all refunds of Taxes in respect of taxable periods of the Company and its
Subsidiaries ending on or before the Closing Date (including any refunds of
Taxes arising from a carryback of losses by the Company or its Subsidiaries
unless such carryback is attributable to the carryback of any loss incurred by
the Company or any of its Subsidiaries after the Closing; provided, however,
that there shall be no requirement to carryback any losses imposed under this
Agreement) or in respect of Straddle Periods to the extent allocable pursuant to
Section 10.13(b) to the portion of such period ending on the Closing Date, net
of any loss or Tax imposed in respect of such refund or as a result of
circumstances giving rise to or underlying such refund. In the event that Buyer
receives any refund (whether through payment, credit or reduction in Taxes) to
which Holdings is entitled hereunder, Buyer shall promptly pay, or cause the
payment of, such refund of Taxes to Holdings, net of any loss or Tax imposed in
respect of such refund or as a result of circumstances giving rise to or
underlying such refund.
(j) No election shall be made under Section 338(g) or Section
338(h)(10) of the Code with respect to the purchase of the Shares of the Company
hereunder.
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<PAGE> 33
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed on its behalf by its duly authorized officers, all as of
the day and year first above written.
VIASYSTEMS INTERNATIONAL, INC.
By: /s/ DAVID J. WEBSTER
-----------------------------------------
Name: David J. Webster
---------------------------------------
Title: Senior Vice President
--------------------------------------
INTERNATIONAL WIRE GROUP, INC.
By: /s/ DAVID M. SINDELAR
-----------------------------------------
Name: David M. Sindelar
---------------------------------------
Title:
--------------------------------------
WIREKRAFT INDUSTRIES, INC.
By: /s/ DAVID M. SINDELAR
-----------------------------------------
Name: David M. Sindelar
---------------------------------------
Title:
--------------------------------------
29
<PAGE> 1
EXHIBIT 10.2
SUPPLY CONTRACT
This Supply Contract (this "Supply Contract") is made as of March 29,
2000 between Wire Harness Industries, Inc., a Delaware corporation with an
office and place of business at 101 South Hanley Road, Suite 400, St. Louis,
Missouri 63105 (hereinafter, together with its subsidiaries, "Harness" or
"Buyer") and International Wire Group, Inc., a Delaware corporation with an
office and place of business at 101 South Hanley Road, Suite 1050, St. Louis,
Missouri 63105 (hereinafter, "IWG" or "Seller").
WITNESSETH:
WHEREAS, the seller is engaged in the business of manufacturing,
distributing and selling wire for use in the appliance and other industries
(hereinafter, the "Business");
WHEREAS, the seller and Viasystems International Inc. ("Viasystems")
have entered into a Stock Purchase Agreement (the "Stock Purchase Agreement")
dated as of today's date pursuant to which Viasystems has agreed to purchase
Wirekraft Industries, Inc. ("Wirekraft"), the parent company of Buyer and
Seller has agreed to sell Wirekraft.
WHEREAS, in connection with such Stock Purchase Agreement, Buyer and
Seller desire to formalize the terms upon which Seller sells and Buyer
purchases insulated wire products for use in the present business conducted by
Buyer and any affiliate of Buyer (the "Present Business");
WHEREAS, the Seller desires to sell and the Buyer desires to purchase
one hundred percent (100%) of the Buyer's requirements for Products, as defined
below, for the Present Business, all in accordance with the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing, the representations
and agreements hereinafter set forth and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Seller and
the Buyer hereby mutually agree as follows:
ARTICLE I - TERM
1.1 The initial term of this Agreement (the "Initial Term") shall be from the
date hereof (the "Effective Date") and shall continue in effect until the
third anniversary of the Effective Date (the "Initial Termination Date").
1.2 This Supply Contract shall be automatically renewed for additional one year
periods (each an "Option Term" and, the end of each such Option Term, an
"Optional Termination Date"), unless Harness gives notice to IWG or IWG
gives notice of its intention not to renew the Supply Contract at least six
(6) months
<PAGE> 2
prior to the Initial Termination Date or any Option Termination Date.
The terms and conditions of this Supply Contract in any Option Term
shall be the same as in the Initial Term.
ARTICLE II - PRODUCT/SPECIFICATIONS
2.1 The terms and conditions of this Supply Contract shall govern the
purchase by Buyer from Seller of Wire, including the part numbers and
specifications of which are listed on Exhibit A hereto which is, by
this reference, incorporated herein, as amended from time to time
(hereinafter "Existing Products(s)"), together with all Wire that is
not an Existing Product, including Wire which results from a redesign,
modification or enhancement of an Existing Product (the "Developed
Product(s)" and, together with the Existing Products, the
"Products(s)"). In the event that there are Developed Products which
Buyer desires to purchase for the Present Business, Buyer shall give
reasonably sufficient advance notice of its requirements for such
Developed Products to Seller so that Seller can produce in a
commercially reasonable time period a written production plan to
demonstrate Seller's ability to supply such Developed Products for the
Present Business. In the event that Seller can reasonably demonstrate
to Buyer its ability to supply such Developed Products for the Present
Business, the Developed Products will be included in this Agreement as
Products and an initial price shall be established for such Developed
Product, in writing, by the parties hereto. The parties shall establish
such price based on a comparative analysis for such Developed Products,
including without limitation, reference to the current prices charged
hereunder for an Existing Product similar in design or application to
the Developed Product with due consideration to any change in cost
associated with the materials used in the Developed Product in relation
to the Existing Product and any development cost associated with such
Developed Product; provided however such prices shall not exceed prices
based on competitive quotes.
ARTICLE III - QUANTITY
3.1 Except as otherwise provided herein, during the Initial Term and any
Option Term of this Supply Contract, Buyer agrees to purchase from
Seller, and Seller agrees to supply to Buyer, one hundred percent
(100%) of Buyer's requirements of Products for the Present Business.
Buyer's requirements of Products shall include Viasystems Group Inc.,
and it's subsidiaries, ("Viasystems") to the extent such products are
used in applications for the Present Business.
3.2 Buyer (on behalf of itself or Viasystems) reserves the right, but shall
not be obligated, to purchase Products under this Agreement to supply
all or part of the Product requirements outside the Present Business.
3.3 Buyer reserves the right to purchase Products from an alternate
manufacturer for any of its locations for development and testing
purposes only, provided that such Products are not used in Buyer's
business for commercial resale.
<PAGE> 3
ARTICLE IV - PRICE
4.1 Unless otherwise agreed to by parties in writing all amounts invoiced and
payable under this Supply Contract shall be paid in U.S. dollars and all
amounts shall be due and payable by wire transfer of immediately available
funds in 45 days from the date of shipment.
4.2 Within twenty (20) days of execution of this Supply Contract, Seller shall
submit to Buyer a completed copy of all Existing Products by part number
with copper weight per thousand feet, copper premiums per pound, compounds,
(PVC, Silicones, XLPE) and packaging cost per shipping unit. Exhibit A
shall assist Buyer in determining the validity of price for raw materials
from Seller in accordance with Section 4.3 herein below during the Initial
Term of this Supply Contract, as well as any Option Term. The Price for
each Existing Product should be set forth as Exhibit B, attached hereto.
The list of Developed Products that are hereinafter sold by Seller to Buyer
in accordance with this Supply Contract shall be added to Exhibit A and the
price for such Developed Products shall be added to Exhibit B.
4.3 During the initial Term and any Option Term of this Supply Contract, the
price of Products shall be as set forth on Exhibit B (subject to the
adjustments described in Sections 4.3.1, 4.3.2, and 4.3.3, 4.4 and 4.5
hereof).
4.3.1 Raw Material Price Adjustment. During the term of the Supply
Contract, the price of Products shall be increased or decreased, as
the case may be and from time to time, to reflect changes in the
cost to Seller of each raw material (as hereinafter defined) to the
extent, but not only to the extent, that such change exceeds 5%
of the cost of such raw material as of January 1, 2000.
For the purposes of this Supply Contract, the cost or price of "raw
materials" shall include (i) the cost of any materials (other than
copper) that are used to manufacture Wire, (ii) freight charges
related to the transportation of such raw material, and (iii) any
premium paid in connection with the acquisition of any raw material,
including copper.
4.3.2 Tax or Tariff Changes. In the event of any changes in the tax,
tariff, surcharge or other similar charges (collectively, "Taxes")
that are added by any governmental entity as of the date hereof in
connection with the importation of raw material that increase or
decrease the cost of such raw materials, then the price of Products
shall be automatically increased or decreased, as the case may be,
to reflect any such increase or decrease in Taxes incurred by
Seller in connection with the importation of raw materials.
<PAGE> 4
4.3.3 Copper Price Adjustments. During the term of this Agreement, the
price of Wire will be adjusted on the 1st of each month to reflect
the prior month's spot COMEX average cost per pound of High Grade
Copper Cathode. The monthly adjustment will be based on the copper
weight per pound for each number. The weight for each copper
construction shall be as set forth in accordance with Exhibit A.
4.4 If at any time during the Initial Term or any Option Term of this Supply
Contract, Seller provides more favorable terms for the Products to a
customer other than Buyer, than those terms, including prices, which Buyer
is receiving for the same Product pursuant to this Supply Contract, then
(a) Seller will promptly notify Buyer and (b) so long as Buyer is in
compliance with its obligations under this Supply Contract. Seller shall
grant equally favorable terms, including prices, to Buyer as those granted
to such other customer.
4.5 In the event that Buyer receives an offer from a viable source to supply
similar Products of all types provided hereunder in similar quantities and
at a lower total cost than that offered by Seller and under substantially
similar terms as those offered by Seller in this Agreement, Buyer shall
have the obligation to give Seller the option of meeting such lower total
cost. In the event Seller does not meet such lower total cost, Buyer shall
be allowed to terminate this Agreement or terminate its obligation to buy
particular Products hereunder, with sixty (60) days written notification,
without further obligation to Seller.
4.6 Freight Terms. The Freight terms under this Agreement unless otherwise
changed by the parties hereto in writing, shall be as follows: FOB Buyers
Dock, Henry Brennen Drive, El Paso, Texas.
ARTICLE V - DELIVERY
5.1 As of the Effective Date, Buyer Shall provide Seller with its good faith
written 4-week rolling forecast by Plant of requirements for Products (the
"Forecast"). Such Forecast shall be updated no less frequently than every
week so that as of each update, the Forecast shall cover a 4-week period.
5.2 Buyer shall issue a purchase order (the "Purchase Order") to Seller
covering all purchases of Products by Buyer pursuant to this Supply
Contract and specifying a scheduled delivery date for the Products (the
"Scheduled Delivery Date"), which such Scheduled Delivery Date shall be
between two (2) and four (4) weeks after the date the Purchase Order is
delivered, or as otherwise agreed by the parties to this Agreement in
writing. Seller shall maintain a maximum lead time ("Lead Time") of four
(4) weeks on all Products identified in Exhibit A hereto. Seller agrees to
supply Products to Buyer within the Lead Time.
<PAGE> 5
5.3 Seller shall also use its reasonable best efforts to supply Products by
the Scheduled Delivery Date. Seller must immediately advise Buyer
details of its inability to supply Products by the Scheduled Delivery
Date.
5.4 if, at any time, Seller is unable to meet Buyer's Scheduled Delivery
Date and delivery requirements reflected in the Purchase Order, Buyer
can elect to purchase the Products affected thereby from an alternate
source. Seller should not reject a Scheduled Delivery Date which is
requested by Buyer at in or after the Lead Time. If Seller is unable to
meet Buyer's Scheduled Delivery Date which is requested by Buyer at or
greater than the Lead Time, Buyer shall recover from the Seller any
excess costs, expenses, or penalties incurred by Buyer, due to the
failure by Seller to supply the Product by the Scheduled Delivery Date.
5.5 If Seller's acts or omissions result in Seller's failure to meet Buyer's
Scheduled Delivery Date or delivery requirements for Products reflected
in the Purchase Order and Buyer requires a more expeditious method of
transportation for the Products than the transportation method
originally specified, then Seller shall ship the Products as
expeditiously as possible at Seller's sole expense.
5.6 Shipments shall be made both in quantities, rounded up to the nearest
multiple of Seller's standard packaging quantity.
5.7 If Buyer's acts or omissions result in Seller's failure to meet Buyer's
delivery requirements for Products reflected in the Purchase Order and
Buyer requires a more expeditious method of transportation for the
Products, other than the transportation method originally specified,
then Seller shall ship the Products as expeditiously as possible at
Buyer's sole expense.
5.8 Subject to Article XI hereof, if the material forecasted in accordance
with Article 5.1 is not purchased in 60 days, the Seller will notify the
Buyer and the Buyer will issue a purchase order to the Seller for this
material within five (5) days from notification for immediate delivery.
ARTICLE VI - TECHNICAL ASSISTANCE
6.1 Upon request of Buyer, Seller agrees to provide reasonable technical
assistance in reviewing the cause of any performance problems
experienced by Buyer in any component, sub-assembly and final assembly
that contains components produced using Seller's Products supplied
pursuant to this Supply Contract; provided, however, that such
performance problem is reasonably believed by Buyer to be caused by
Seller's Products.
6.2 Seller agrees to use best efforts to provide resources to engineer,
manufacture and provide to Buyer the most technically advanced, highest
quality, and commercially competitive Product available in the wire
industry.
<PAGE> 6
6.3 Seller shall assist Buyer's product engineering department with technical
issues regarding Seller's current Products and shall provide any
reasonable resources necessary to Buyer to resolve these issues.
ARTICLE VII - NOTICES
7.1 All notices required or permitted hereunder shall be in writing and
shall be deemed to be properly given when personally delivered to an
officer or designated representative of the party entitled to receive
the notice or when sent by certified or registered first class mail,
postage prepaid, or by telecopy, hand delivery, or overnight courier,
properly addressed to the party entitled to receive such notice at the
address stated below:
If to Seller:
International Wire Group, Inc.
101 South Hanley Road, Suite 1050
St. Louis, Missouri 63105
Attn: President and Chief Operating Officer
International Wire Group, Inc.
If to Buyer:
Wire Harness Industries, Inc.
101 South Hanley Road, Suite 1050
St. Louis, Missouri 63105
Attn: President, Wire Harness Industries, Inc.
ARTICLE VIII - QUALITY
8.1 Seller expressly warrants to Buyer and to purchasers of Buyer's Products
that at the time of delivery the Products called for by this Supply
Contract (including tooling, if any), or any Purchase Order pursuant
hereto, will conform to the applicable specifications, and the drawings,
samples and/or descriptions relating thereto, furnished to Seller from
Buyer.
8.2 At all times, Seller expressly warrants that the Products called for by
this Supply Contract, or any Purchase Order issued pursuant hereto, will
be free from material defects in materials and workmanship.
8.3 Seller warrants that it will use its best efforts to ensure that all
Products and/or services provided herein shall conform in all material
respects to the Buyer's furnished specifications. Upon written request,
Seller shall provide to Buyer copies of such documents and records
reasonably requested by Buyer in order to verify compliance with this
Supply Contract including this Section 9.3, provided, however, that
Seller shall not be required to provide Buyer with any
<PAGE> 7
documents or records that it determines in good faith to confidential and
competitively sensitive or which would violate applicable Law.
8.4 If Seller provides Products to Buyer that do not conform to the Buyer's
furnished specifications or are otherwise defective or do not conform to a
Purchase Order issued pursuant to this Agreement, Buyer shall handle and
be responsible for every claim of damage or injury that is based upon a
breach of the foregoing warranty.
8.5 Seller agrees to use its best efforts to track claims of nonconforming
Products, and to work with Buyer to reduce the numbers of such claims by
improving the Products to eliminate defects and/or nonconformities.
ARTICLE IX - CONFIDENTIALITY
9.1 "Propriety Information" shall for the purpose of this Supply Contract,
mean information disclosed by Buyer or Seller (the "Disclosing Party") to
the other party (the "Receiving Party") and identified in writing or other
tangible form at the time of disclosure or, within thirty (30) days of oral
disclosure, as "Proprietary."
9.2 Except as required by law, judicial or governmental order, discovery
request, other legal process or pronouncement or the rules of any national
stock exchange or the Nasdaq Stock Market (collectively, "Law"), the
Receiving Party shall protect as proprietary and keep confidential all
Proprietary Information in accordance with the terms of this Article 9
including, but not limited to, designs, processes, drawings,
specifications, reports, data, terms and conditions and other technical or
business information and the features of all parts, equipment, tools,
gauges, patterns, and other items furnished or disclosed to the Receiving
Party by the Disclosing Party (hereinafter referred to as "Proprietary
Goods"). Unless otherwise provided herein or authorized by the Disclosing
Party in writing, the Receiving Party shall use such Proprietary
Information or Proprietary Goods, and the features thereof, only in the
performance of its obligations under this Supply Contract. Upon completion
or termination of this Supply Contract, or any Purchase Order pursuant
hereto, the Receiving Party shall, at the Disclosing Party's expense, make
such disposition of all such Proprietary Information or Proprietary Goods
as herein required or as may be subsequently requested by the Receiving
Party, including, but not limited to, any studies, analyses, compilations,
or other materials prepared in whole or in party based on said Proprietary
Information or Proprietary Goods.
9.3 In protecting the Disclosing Party's Proprietary Information in accordance
with Article 9.2 above, the Receiving Party agrees to exercise reasonable
steps at the Disclosing Party's expense to safeguard the confidentiality of
the Proprietary Information consistent with the steps the Receiving Party
uses to safeguard its own information consistent with the steps the
Receiving Party uses to safeguard its own information of like kind and,
except as required by Law, not to disclose any part of it to any third
person except to such of the Receiving Party's employees, advisors, counsel
and other representatives as need to know such information for
<PAGE> 8
the purpose of performing obligations under this Supply Contract and whom
such party has directed to preserve the confidentiality of the Proprietary
Information.
9.4 No right or license, either express or implied, under any patent,
copyright, trade secret, for Proprietary Information, Proprietary Goods or
other information is granted hereunder.
9.5 The obligations of this Article 9 shall survive the termination of this
Supply Contract for a period of two (2) years following such termination.
9.6 The Article 9 shall not affect the Receiving Party's rights to use or
disclose information:
(a) which is or may hereafter be in the public domain; or
(b) which the Receiving Party can show was known to it prior to the
disclosure by the Disclosing Party pursuant to the terms of this
Supply Contract; or
(c) which is disclosed to the Receiving Party by a third party and, to the
knowledge of the Receiving party, was not disclosed by such third
party in violation of any agreement between the Disclosing Party and
such third party; or
(d) which is or may hereafter be disclosed by the Disclosing Party to a
third party without similar restrictions on disclosure or use; or
(e) which is independently developed by the Receiving Party without the
use of the Proprietary Information or Proprietary Goods; or
(f) which is required to be disclosed by Law, provided that notice of such
disclosure is promptly provided to the Disclosing Party in order that
it may have every reasonable opportunity to intercede in such process
to contest such disclosure.
ARTICLE X - TERMINATION
10.1 In the event of a material breach of the terms of this Supply Contract by
either party hereto, the non-defaulting party may notify the defaulting
party of such default, specifying in reasonable detail the nature of such
default. Upon receipt of such notice, the parties shall promptly meet and
jointly develop, in good faith, a plan setting forth the steps to be
implemented to enable the defaulting party to cure the default and
prospectively comply with the terms and conditions of this Supply Contract,
which plan shall include the time period for implementing such plan which
shall in no even exceed 30 days (the "Action Plan"). If the defaulting
party does not comply with the terms of the Action Plan within the time
period(s) specified therein, the non-defaulting party may, in addition to
any other rights and
<PAGE> 9
remedies it may have at law or in equity, unless such default is cured
within thirty (30) days of such party's failure to comply with the
Action Plan, either (a) terminate the Supply Contract, or (b) if the
material breach of this Supply Contract is due to Seller's failure to
deliver certain Products in accordance herewith, cancel any Purchase
Order or portion thereof relating to those Products and/or eliminate
such Products from Buyer's purchase requirements pursuant to this
Supply Contract.
10.2 Either party shall also have the right to immediately terminate this
Agreement or any Purchase Order issued pursuant hereto without further
cost or liability to such party in the event of (i) the appointment of
a receiver or trustee for the other party, or (ii) the execution by the
other party of any assignment for the benefit of creditors; provided,
that the petition, appointment or assignment referenced in
sub-paragraphs (i) through (ii) above is not vacated or nullified
within fifteen (15) days of such event.
ARTICLE XI - CANCELLATION OF PURCHASE ORDER
11.1 Without limiting the generality of the foregoing, the Buyer may, by
giving written notice to Seller, terminate any Purchase Order issued
pursuant hereto, in whole or in part, if at any time Buyer's customers
terminate a related agreement, Purchase Order with Buyer for any
reason.
11.2 After Seller's receipt of such notice of termination, Seller shall
immediately terminate all work under Buyer's Purchase Order. Buyer's
liability to Seller with respect to such termination shall be limited
to (x)(i). The purchase price set forth in this Supply Contract for
Products not salable to Seller's other customers or useable in Seller's
other operations in the ordinary course of business over a reasonable
period of time, (ii) Seller's verifiable incurred manufacturing costs
for work in process at the date of notice of termination (not to
exceed the number of Products ordered and reflected in the Forecast
through the manufacturing interval) and (iii) Seller's purchase price
of raw material and components necessary through forecasted lead time,
including finished goods inventory not returnable or useable in
Seller's other operations in the ordinary course of business over a
reasonable period of time, minus (y) any salvage value thereof.
11.3 Buyer shall have no obligation to Seller if Buyer terminates its
purchase se of Seller's default in accordance with the provisions of
Article 11 hereof.
ARTICLE XII - INSPECTION
12.1 Buyer and, if the face of any order issued pursuant hereto bears United
States federal government prime contract number or the Buyer otherwise
advises Seller of the existence of such contract, representatives of
the United States federal government, shall have the right to inspect
and test Seller's Manufacturing Facility, goods, materials and
workmanship at reasonable times and places, and upon reasonable prior
notice, including, when practicable, during manufacture;
<PAGE> 10
and if any such inspection or test is made on the premises of Seller,
Seller shall furnish without cost to Seller all reasonable existing
facilities and assistance for a safe and convenient inspection or test.
Buyer's inspection of the Products, whether during manufacture, prior to
delivery or within a reasonable time after delivery, shall not
constitute acceptance of any work-in-process or finished Products.
12.2 Notwithstanding prior inspection, payment for, or use of the Products,
Buyer shall have the right to reject any of such Products which do not
conform to the requirements of this Supply Contract within thirty (30)
days from the date of delivery of the Products. All such rejected items
shall be returned to seller. In the event that Buyer shall improperly
return Products that conform in all material respects with the terms of
this Supply contract, then Buyer shall pay all reasonable costs and
expenses incurred by Seller in connection with such improper return by
Buyer. Should Buyer in such case repair the Products, all terms and
conditions set forth herein shall remain in full force and effect as to
the Products furnished by Seller.
ARTICLE XIII - PACKAGING; SHIPPING
13.1 Seller agrees to (a) pack, label and ship Products in accordance with
Buyer's standards, (b) make no charge for handling, packaging, storage,
transportation or drayage of Products except as otherwise provided
herein; and (c) provide with each shipment packing slips with Buyer's
Purchase Order number marked thereon. Seller shall reimburse Buyer for
all reasonable and foreseeable out-of-pocket expenses incurred by Buyer
as a result of Seller's improper packing, labeling, routing or shipping.
13.2 The labels on each package and identification of the Products on packing
slips, bills of lading and invoices shall be sufficient to enable Buyer
to easily identify the Products purchased. Seller further agrees to
promptly render, after delivery of Products or performance of services,
correct and complete invoices to Buyer.
ARTICLE XIV - INFRINGEMENT INDEMNITY
14.1 As to any of the Products manufactured or supplied to a design or
specification furnished by Buyer. Buyer shall indemnify and save
harmless Seller, its subsidiaries, affiliates, controlling persons and
successors from any claim, suit, demand, loss, damage, liability and
expense (including reasonable attorneys fees) alleging that the same in
and of itself infringes any United States or foreign patent, copyright,
trademark, semiconductor ship product mask work right or any other
proprietary right, except that the design or specification shall be
deemed to be not furnished by Buyer if the subject matter giving rise to
the claim of infringement either (a) was derived from, or selected by,
the Seller, or (b) relates to materials, compositions, alloys or
processes relating thereto. As to any of the Products manufactured or
supplied other than to a design or specification furnished by Buyer,
Seller shall indemnify and save harmless Buyer and its
<PAGE> 11
successors from any claim, suit, cause of action, demand, loss, damage,
liability and expense (including reasonable attorneys fees) alleging
that any use or resale of the same in and of itself infringes, or
constitutes inducement to infringe, any United States or foreign
patent, copyright, trademark, semiconductor chip product mask work
right or any other proprietary right, except that the design or
specification shall be deemed to be not furnished by Buyer if the
subject matter giving rise to the claim of infringement either (a) was
derived from, or selected by, the Seller, or (b) relates to materials,
compositions, alloys or processes relating thereto.
14.2 Upon the making of any claim indemnified hereunder, the commencement of
any suit or action having basis in such claim, or a belief that such a
claim is likely or imminent, the party against whom such claim is made,
or suit or action commenced, shall promptly notify the other in writing,
and the party required to assume liability therefor under the foregoing
provisions shall promptly assume and diligently conduct the entire
defense thereof, at its own cost and expense; provided, that the party
not required to assume liability shall have the right, insofar as its
interests are affected, at its sole election and at its own cost and
expense, to request the court to permit it to intervene in any such suit
or action or to cooperate in the defense thereof with the party required
to assume liability, without releasing any obligation, liability or
undertaking of the latter party.
ARTICLE XV - AMENDMENT
15.1 Except as otherwise provided herein, no modification of this Supply
Contract or any Purchase Order issued pursuant hereto shall be binding
on Seller or Buyer unless made by a formal written document (either a
Change Notice, Supplement, or Purchase Order Amendment) signed by
Buyer and Seller. The only representatives of Buyer empowered to direct
changes or to agree to modifications of this Agreement are the
respective President's of the Buyer and Seller. No recommendations or
suggestions by Buyer or others to Seller shall be binding on Buyer
unless made in accordance with this Article 15.
ARTICLE XVI - ASSIGNMENT
16.1 Except as otherwise provided herein, performance of this Supply
Contract, or any Purchase Order issued pursuant hereto, and all
obligations relating thereto, shall not be assigned or delegated by
either party without the prior written consent of the other party, such
consent not to be unreasonably withheld.
16.2 Claims for money due or to become due to Seller from Buyer arising out
of this Supply Contract, or any Purchase Order issued pursuant hereto,
may be assigned, But Buyer shall be under no obligation to pay the
assignee unless and until Buyer shall have received, written notice of
the assignment, a true copy of the instrument of assignment, suitable
documentary evidence of Seller's authority so to assign, and a release
from the Seller.
<PAGE> 12
16.3 Except as required by applicable Law, in no event shall copies of this
Supply Contract, any Purchase Order issued pursuant hereto, or of any
plans, specifications, or other similar documents relating to work under
this Supply Contract be disclosed or furnished to any assignee or to any
other person without the prior written consent of the Buyer.
Notwithstanding any such assignment, Seller shall continue to be bound by
the obligations of Article 9 hereof.
ARTICLE XVII - FORCE MAJEURE
17.1 Any delay or failure of either party to perform its obligations hereunder
or under any Purchase Order issued pursuant hereto shall be excused if,
and to the extent that it is caused by an event or occurrence beyond the
reasonable control of the party and without its fault or negligence, such
as, by way of example and not by way of limitation, acts of God, action by
any governmental authority (whether valid or invalid), fires, floods,
windstorms, explosions, urban disturbance and riots, natural disasters,
wars, sabotage, or court injunction or order (a "Force Majeure
Condition"); provided that written notice of such delay (including the
anticipated duration of the delay) shall be given by the affected party to
the other party within twenty-four (24) hours or as early as practicable
taking into account the Force Majeure Condition. During the period of such
delay or failure to perform by Seller, Buyer, at its option, may suspend
this Supply Contract, purchase Products from other sources during such
period, without any liability to Seller, or have Seller provide the
Products from other sources in quantities and at times requested by Buyer
and at the price set forth in this Supply Contract, plus any additional
costs and expenses incurred by Seller in connection therewith as a result
of the Force Majeure Condition. If requested by the Buyer, Seller shall,
within twenty-four (24) hours of such request, provide reasonable
assurance that the delay will cease within six (6) months. If Buyer cannot
provide the Seller a reasonable assurance then the Buyer may immediately
cancel the Agreement or any Purchase Order issued pursuant hereto without
any further liability to Seller. In the event of any period that Seller is
not supplying Buyer with Products due to a Force Majeure Condition, the
Initial Term or any Option Term then in effect shall automatically be
extended by such period.
ARTICLE XVIII - COMPLIANCE WITH LAWS;
COUNTRY OF ORIGIN INFORMATION; CERTIFICATION
18.1 In the performance of this Supply Contract, Seller shall comply in all
material respects with all federal, state and local laws, ordinances,
rules and regulations which may be applicable to Seller's performance of
its obligations hereunder in the country to which Seller's Products are
delivered to Buyer hereunder. Seller hereby certifies that the goods
called for by this Supply Contract, or any Purchase Order issued pursuant
hereto have been or will be produced in compliance in all material
respects with such applicable laws or ordinances.
<PAGE> 13
18.2 Seller, upon written request, shall furnish any and all documents
necessary for Buyer to obtain export credits and customs drawbacks and
in Seller's possession and control. Seller also shall provide
information and, if necessary, certify such information, as to the
country of origin of the goods provided hereunder and the value added
thereto in each country. Seller will provide such information with
respect to the origin of the raw materials, place of processing, and
assembly of any goods delivered hereunder so as to enable Buyer to
certify such information under the law of the United Sates.
ARTICLE XIX - GOVERNMENT CONTRACT REQUIREMENTS
19.1 If this Supply Contract or any Purchase Order issued pursuant hereto is
a subcontract, or a supply contract comprised solely of commercial items
under a United States federal government prime contract as may, in some
cases, be evidenced by the inclusion of a United States federal
government prime contract, to be included in subcontracts or in supply
contracts of this nature, are hereby incorporated in and made a part of
this Supply Contract. The classification of a contract arising out of
these terms and conditions, or the related Purchase Order, as one
comprising commercial item(s) and the decision as to whether Seller is a
subcontractor or supplier, for purposes of determining which U.S.
Government Regulations apply, shall be that of the Buyer. Seller agrees
to accept the inclusion of all applicable U.S. Government FAR and FAR's
Supplemental Clauses.
19.2 Since the phraseology of the clauses incorporated above has been
primarily designed for government prime contracts, words and phrases in
the foregoing regulations importing the United States federal government
or the prime contractor or their representatives shall, when a fair and
reasonable interpretation of the context of this Supply Contract so
requires in order to express properly the subcontract relationship, be
deemed to refer to Buyer or Seller or their respective representatives;
provided, however, that all references to "Government" in the patent
clauses incorporated herein above shall refer only to the United States
Government and all references to "Contacting Officer" in the clauses
incorporated herein above shall refer to the Government Contacting
Officer for the prime contact; provided, further that all references to
the clause entitled "Disputes" shall be deemed deleted. Copies of such
FAR clauses and information as to the Cognizant Contracting Officer
shall be furnished by Buyer to Seller upon request.
ARTICLE XX - INSURANCE
20.1 Seller shall maintain insurance coverage in amounts not less than the
following:
20.1.1 Worker's Compensation - Statutory Limits for the state or states
in which the work ordered under these terms and conditions is
performed (or evidenced of authority and financial ability to
self-insure);
<PAGE> 14
20.1.2 Comprehensive General Liability Insurance (including
Products/Completed Operations and Blanket Contractual Liability)
in which the limit of liability for personal injury or for
property damage shall be $1,000,000 per occurrence, or a combined
single limit of $1,000,000 per occurrence for Personal Injury and
Property Damage; and
20.1.3 Automobile Liability Insurance (including owned, non-owned and
hired vehicles) in which the limit of liability for personal
injury or for property damage shall be $1,000,000 per occurrence,
or combined single limits of $1,000,000 per occurrence for
Personal Injury and Property Damage.
20.2 At Buyer's request in writing, Seller shall furnish to Buyer certificates
of insurance setting forth the amount(s) of coverage, policy number(s) and
details(s) of expiration for insurance maintained by Seller and, if further
requested in writing by Buyer, such certificates will provide that Buyer
shall receive thirty (30) days prior written notification from the insurer
of any termination or reduction in the amount or scope of coverages.
Seller's purchase of appropriate insurance coverage or the furnishing of
certificates of insurance shall not release Seller of its obligations or
liabilities under any Purchaser Order issued hereunder.
ARTICLE XXI - MISCELLANEOUS
21.1 Seller shall not, without first obtaining the written consent of Buyer, in
any manner use any trademarks or trade name of Buyer in Seller's
advertising or promotional materials.
21.2 In the event of any conflict between this Supply Contract and the
provisions of any Purchase Order issued pursuant hereto, the terms of
this Supply Contract shall govern.
21.3 Captions, as used herein, are for convenience or reference only and shall
not be construed to limit or extend the language of the provisions to which
such captions may refer.
21.4 The provisions of this Supply Contract, together with all exhibits,
schedules and appendices hereto, constitute the complete and exclusive
agreement between the parties hereto and supersede any and all previous
communications, representations or agreements, whether oral or written,
between the parties with respect to the subject matter hereof.
21.5 These terms and conditions hereof shall be governed by and construed in
accordance with the laws of the State of Missouri. Buyer may, but is not
obligated to, bring any action or claim relating to or arising out of this
Supply Contract or any Purchase Order issued pursuant hereto in the
appropriate state or federal court in Missouri, and the Seller hereby
irrevocably consents to personal jurisdiction in any such court, hereby
appointing the Secretary of State of the State of Missouri as its agent for
receiving service of process.
<PAGE> 15
21.6 The failure of either party at any time to require performance by the
other party of any provision of this Supply Contract or any Purchase
Order placed by Buyer from time to time shall in no way affect the
right of such party to require such performance at any time
thereafter. Similarly, the wavier by either party of a breach of any
provision of these terms and conditions or of any order placed by
Buyer from time to time pursuant hereto shall not constitute a wavier
of any succeeding breach of the same or any other provision.
21.7 Seller and Buyer are independent contracting parties and nothing in
this Agreement or any Purchase Order issued pursuant hereto shall make
either party the agent or legal representative of the other party for
any purpose whatsoever, not does it grant either party any authority
to assume or to create any obligation on behalf of or in the name of
the party.
21.8 If any term of this Supply Contract or any Purchase Order issued
pursuant hereto is invalid or unenforceable under any statue,
regulation, ordinance, executive order, or other rule of law, such
term shall be deemed reformed or deleted, but only to the extent
necessary to comply with such statue, regulation, ordinance, executive
order or other rule of law, and the remaining provisions of this
Supply Contract, or any Purchase Order issued pursuant hereto, shall
remain in full force and effect.
21.9 The Seller agrees that all chemical substances, as more fully defined
in the Toxic Substances Control Act (TSCA), comprising or used in the
manufacture of the Products ordered by Buyer are, to the best of
Seller's knowledge, listed in the inventory complied under Section
8(b) of TSCA and are not banned from commercial use under TSCA.
Buyer shall have the right to visit and inspect Seller's Facility
employed in the manufacture of Products to be delivered to Buyer's
facility(s) during normal business hours and upon reasonable prior
written notice to Seller.
[The remainder of this page is intentionally left blank]
<PAGE> 16
IN WITNESS WHEREOF, the parties hereto have made and executed this
Agreement as of the day and year first above written.
WIRE HARNESS INDUSTRIES, INC.
By: /s/ DAVID J. WEBSTER
----------------------------------
Name: David J. Webster
--------------------------------
Title: Senior Vice President
-------------------------------
INTERNATIONAL WIRE GROUP, INC.
By: /s/ DAVID J. WEBSTER
----------------------------------
Name: David J. Webster
--------------------------------
Title: Senior Vice President
-------------------------------
<PAGE> 17
EXHIBIT A
Copper Pounds
-------------
1. 32.0500
2. 32.0500
3. 170.0000
4. 52.8700
5. 52.8700
6. 7.9700
7. 32.0500
8. 32.0500
9. 32.0500
10. 32.0500
11. 32.0500
12. 32.0500
13. 32.0500
14. 32.0500
15. 32.0500
16. 32.0500
17. 32.0500
18. 20.1600
19. 12.6900
20. 7.9700
21. 7.9700
22. 20.1600
23. 32.0500
24. 20.1600
25. 20.1600
26. 20.1600
27. 20.1600
28. 20.1600
29. 20.1600
30. 20.1600
31. 20.1600
32. 20.1600
33. 20.1600
34. 20.1600
35. 20.1600
36. 20.1600
37. 20.1600
38. 20.1600
39. 20.1600
40. 20.1600
<PAGE> 18
41. 20.1600
42. 5.0000
43. 12.6900
44. 12.6900
45. 12.6900
46. 12.6900
47. 12.6900
48. 12.6900
49. 12.6900
50. 12.6900
51. 12.6900
52. 12.6900
53. 12.6900
54. 7.9700
55. 7.9700
56. 7.9700
57. 7.9700
58. 7.9700
59. 7.9700
60. 7.9700
61. 7.9700
62. 7.9700
63. 7.9700
64. 7.9700
65. 7.9700
66. 7.9700
67. 7.9700
68. 7.9700
69. 7.9700
70. 7.9700
71. 7.9700
72. 15.9400
73. 5.0000
74. 5.0000
75. 5.0000
76. 5.0000
77. 5.0000
78. 5.0000
79. 5.0000
80. 5.0000
81. 5.0000
82. 5.0000
83. 5.0000
84. 5.0000
2
<PAGE> 19
85. 5.0000
86. 5.0000
87. 5.0000
88. 5.0000
89. 5.0000
90. 5.0000
91. 5.0000
92. 5.0000
93. 5.0000
94. 5.0000
95. 5.0000
96. 5.0000
3
<PAGE> 20
EXHIBIT B
Last Selling Price
------------------
1. 60.1400
2. 60.1400
3. 327.4100
4. 442.7100
5. 442.7100
6. 13.0000
7. 52.1400
8. 52.1400
9. 52.1400
10. 52.1400
11. 55.1200
12. 55.1200
13. 55.1200
14. 55.1200
15. 55.1200
16. 55.1200
17. 35.6000
18. 27.2700
19. 19.4400
20. 13.0200
21. 13.0200
22. 27.2700
23. 35.6000
24. 34.0900
25. 34.0900
26. 34.0900
27. 34.0900
28. 34.0900
29. 34.0900
30. 34.0900
31. 34.0900
32. 34.0900
33. 34.0900
34. 34.0900
35. 34.0900
36. 34.0900
37. 34.0900
38. 34.5400
39. 34.5400
40. 34.5400
<PAGE> 21
41. 34.5400
42. 21.8000
43. 22.5000
44. 22.5000
45. 22.5000
46. 22.5000
47. 22.5000
48. 21.2900
49. 30.7800
50. 30.7800
51. 38.5300
52. 38.0100
53. 38.0100
54. 15.5800
55. 15.5800
56. 15.5800
57. 15.5800
58. 15.5800
59. 15.5800
60. 15.5800
61. 15.5800
62. 15.5800
63. 23.3100
64. 23.0200
65. 41.9000
66. 41.9000
67. 25.1600
68. 25.1600
69. 25.1600
70. 25.1600
71. 25.1600
72. 72.5000
73. 11.3400
74. 11.3400
75. 11.3400
76. 19.6400
77. 11.3400
78. 11.3400
79. 11.3400
80. 11.3400
81. 11.3400
82. 11.3400
83. 11.3400
84. 11.3400
2
<PAGE> 22
85. 11.3400
86. 11.3400
87. 11.3400
88. 18.3400
89. 18.3400
90. 18.3400
91. 18.3400
92. 10.0900
93. 10.1200
94. 10.1200
95. 10.1200
96. 10.1200
3
<PAGE> 1
EXHIBIT 99.1
INTERNATIONAL WIRE GROUP, INC. ANNOUNCES THE SALE OF ITS WIRE
HARNESS SEGMENT TO VIASYSTEMS GROUP, INC.
ST. LOUIS, March 29, 2000 - International Wire Group, Inc. today announced that
it has completed the sale of its Wire Harness Segment to Viasystems Group, Inc.
(NYSE: VG) for $210 million in cash. Substantially all of the proceeds from the
sale will be used to pay down International Wire's Senior Bank Facility.
International Wire Group, Inc., headquartered in St. Louis, Missouri, is a
leading designer, manufacturer and marketer of wire products, including bare and
tin-plated copper wire and insulated copper wire. The Company's products include
a broad spectrum of copper wire configurations and gauges with a variety of
electrical and conductive characteristics and are utilized by a wide variety of
customers primarily in the appliance, automotive, computer and data
communications and industrial equipment industries.
For further information, please contact David M. Sindelar, Senior Vice President
and Chief Financial Officer, at (314) 727-1701; Mark Semer, Kekst and Company,
at (212) 521-4800.
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