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Exhibit 2.1
[EXECUTION COPY]
BICC Cables Corporation
BICC Cables Canada Inc.
Pyrotenax USA Inc.
and
GK Technologies, Incorporated
ASSETS SALE AND
PURCHASE AGREEMENT
relating to
the sale and purchase of the energy cable Operations of
BICC Cables Corporation, Pyrotenax USA Inc. and BICC Cables Canada Inc.
Dated April 6, 1999
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TABLE OF CONTENTS
Page
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Background........................................................................................................2
1 Interpretation.............................................................................................3
1.1 Definitions...........................................................................14
1.2 Subordinate Legislation...............................................................14
1.3 [Intentionally Omitted]...............................................................14
1.4 Schedules, etc........................................................................14
1.5 Conflict..............................................................................14
1.6 Information...........................................................................14
1.7 Knowledge.............................................................................15
1.8 Accounting Standards..................................................................15
2 Agreement to Sell the Acquired Assets.....................................................................15
2.1 Sale and Purchase of Acquired Assets..................................................15
2.2 Assumption of Liabilities.............................................................15
2.3 Indemnification.......................................................................19
3 Consideration.............................................................................................28
3.1 Amount and Payment....................................................................28
3.2 Adjustments...........................................................................28
3.3 Method of Payment.....................................................................28
4 Conditions................................................................................................29
4.1 Conditions Precedent..................................................................29
4.2 Responsibility for Satisfaction.......................................................30
4.3 Termination...........................................................................31
5 Action Pending Closing....................................................................................31
5.1 Vendors' General Obligations..........................................................32
5.2 Restrictions on Vendors...............................................................32
5.3 Purchasers' General Obligations.......................................................34
6 Closing...................................................................................................34
6.1 Date and Place........................................................................34
6.2 Closing Events........................................................................34
6.3 Payment of Price......................................................................35
7 Representations and Warranties............................................................................35
7.1 Representations and Warranties from the Vendors;
Incorporation of Schedule 8.................................................35
7.2 Warranties from the Purchasers........................................................35
7.3 UPDATING TO CLOSING...................................................................35
8 [Intentionally Omitted]...................................................................................36
9 Net Asset Statement, and Adjustments to the Purchase Price................................................36
9.1 Basis of Preparation of Net Asset Statement...........................................36
9.2 Preparation of Net Asset Statement....................................................36
9.3 Net Asset Statement...................................................................40
10 Transfer Taxes............................................................................................41
11 Post-Closing Date Contract payments received by the Vendors...............................................41
12 Defective Product or Service..............................................................................41
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12.1 Responsibility Allocation ...........................................................41
12.2 Definitions...........................................................................41
12.3 Vendor receives claim.................................................................42
12.4 Purchaser receives claim..............................................................42
12.5 Vendors receive claim for post-Closing product or service.............................43
12.6 Claim made for product or service spanning Closing....................................43
12.7 Indemnities reduced by recovery from third parties....................................43
13 Third Party Consents......................................................................................44
13.1 Failure to Assign.....................................................................44
13.2 Indiana Lease.........................................................................45
14 Employees.................................................................................................47
15 Employee Benefit Arrangements.............................................................................47
16 Environmental.............................................................................................47
17 Post-Closing Obligations..................................................................................47
17.1 The Assumed Liabilities...............................................................47
17.2 Bonds and Guarantees..................................................................48
17.3 Vendors' General Obligations..........................................................48
17.4 Vendors' Continuing Obligation........................................................48
17.5 Change of Name........................................................................49
17.6 ......................................................................................50
17.7 Investment Canada Act.................................................................50
18 Guarantees ...............................................................................................51
18.1 Vendors' Guaranteed Obligations.......................................................51
18.2 Guaranty..............................................................................51
18.3 Purchaser's Guaranteed Obligations....................................................51
18.4 Guaranty..............................................................................51
19 Other Provisions..........................................................................................52
19.1 Announcements.........................................................................52
19.2 Confidential Information..............................................................52
19.3 Permitted Disclosure, etc.............................................................54
19.4 Integration...........................................................................55
19.5 Successors and Assigns; No Third-Party Beneficiaries..................................55
19.6 Amendments and Waivers................................................................56
19.7 Remedies..............................................................................56
19.8 Third Party Costs.....................................................................56
19.9 Costs to Assign Contracts.............................................................56
19.10 Interest..............................................................................57
19.11 Set-Off...............................................................................57
19.12 Long Stop Limitation of Liability.....................................................57
19.13 Exclusivity...........................................................................58
19.14 Notices...............................................................................58
19.15 Severance.............................................................................60
19.16 References to the Reporting Accountants...............................................60
19.17 General Services and Supply Agreement.................................................60
19.18 Counterparts..........................................................................60
19.19 Governing Law and Submission to Jurisdiction..........................................61
19.20 Settlement Attempt....................................................................62
19.21 Appointment of Process Agents.........................................................62
19.22 Currency..............................................................................63
19.23 Certain Restrictive Covenants.........................................................63
19.24 Reliance by Purchasers; Disclosure of Representation and Warranties...................66
19.25 Section Headings......................................................................66
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19.26 References............................................................................66
19.27 Cooperation...........................................................................66
19.28 Bulk Sales............................................................................66
SCHEDULES
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Schedule 1 Operations
Schedule 2 [Intentionally Left Blank]
Schedule 3 Allocation of Purchase Price
Schedule 4 Certain Third Party Consents
Schedule 5 Warranties Not Updated to Closing
Schedule 6 Closing Events; US Vendors Accounting Periods; ▇▇▇▇ of Sale;
Tax Deed of Covenant
Schedule 7 Net Asset Statement
Schedule 8 Representations and Warranties given by the Vendors under
Section 7.1
Schedule 9 Warranties from the Purchasers
Schedule 10 Transfer Taxes
Schedule 11 Employees
Schedule 12 Employee Benefit Arrangements
Schedule 13 [Intentionally Left Blank]
Schedule 14 Intentionally Left Blank
Schedule 15 Intellectual Property
Schedule 16 Environment
Schedule 17 Excluded Assets
Schedule 18 Bonds and Guarantees
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THIS AGREEMENT is made on April 6, 1999 among
(1) BICC CABLES CORPORATION
a company incorporated in Delaware, the United States
whose principal place of business is at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇;
(2) PYROTENAX USA INC. (together with BICC Cables Corporation, the
US VENDOR), a company incorporated in Delaware, the United
States.
(3) BICC CABLES CANADA INC. (the CANADIAN VENDOR)
a company incorporated under the federal laws of Canada whose
principal place of business is at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ 155;
(4) BICC PLC (the VENDORS' GUARANTOR)
a company incorporated in England and Wales
whose registered office is at ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇ ▇▇▇;
(5) GK TECHNOLOGIES, INCORPORATED (the US PURCHASER)
a company incorporated in New Jersey, the United States
whose principal place of business is at ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇;
(6) GK TECHNOLOGIES, INCORPORATED (the CANADIAN PURCHASER) a
company incorporated in New Jersey, the United States
whose principal place of business is at ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇; and
(7) GENERAL CABLE CORPORATION (the PURCHASERS' GUARANTOR) a
company incorporated in Delaware, the United States
whose principal place of business is at ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
BACKGROUND
The Vendors' Guarantor engages in the energy cables business worldwide,
both directly and indirectly, through various subsidiaries and joint ventures,
including through the US Vendor and the Canadian Vendor. The Purchasers'
Guarantor and the Vendors' Guarantor intend to enter into transactions for the
sale by the Vendors' Guarantor of its worldwide energy cables business. The
parties intend that the portion of the energy cables business conducted
worldwide other than in North America be transferred to Affiliates of the
Purchasers' Guarantor under the Non-North American Agreements and that the
portion of the energy cables business conducted in North America be
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transferred to US Purchaser and Canadian Purchaser pursuant to the terms and
conditions of this Agreement.
NOW, THEREFORE, intending to be legally bound hereby, the parties
hereto agree as follows:
1 INTERPRETATION
In this Agreement, including its Schedules, the headings shall not
affect its interpretation and, unless the context otherwise requires, the
provisions in this Section 1 apply:
1.1 DEFINITIONS
ACCOUNTS RECEIVABLE means (a) any right to payment for goods sold,
leased or licensed or for services rendered, whether or not it has been earned
by performance, whether billed or unbilled, and whether or not it is evidenced
by any Contract; (b) any note receivable; or (c) any other receivable or right
to payment of any nature, in each case arising in the ordinary course of the
Operations, but excluding any Excluded Assets;
ACQUIRED ASSETS means the US Assets and the Canadian Assets;
AFFILIATE means, relative to any person, any other person which,
directly or indirectly, controls or is controlled by or under common control
with such person. For the purposes of this definition, "control" (including
correlative terms such as "controlling", "controlled by" and "under common
control with") means, relative to any person, the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such person, whether through the ownership of voting stock, by
agreement or otherwise; provided, however, that beneficial ownership of 20% or
more of the voting stock of a person shall be deemed to be control;
AGREED UPON NET ASSET VALUE has the meaning given to it in Section
9.3.3;
AGREEMENT means this Assets Sale and Purchase Agreement;
ASBESTOS LIABILITIES has the meaning given to it in Section 2.3.2(f);
ASSUMED LIABILITIES means, collectively, the US Assumed Liabilities and
the Canadian Assumed Liabilities, and ASSUMED LIABILITY means any one of such
Assumed Liabilities;
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BALANCE SHEET DATE means December 31, 1998;
BULK SALES LAWS means the Uniform Commercial Code Bulk Transfer
provisions of any Jurisdiction (or any similar Laws of any applicable
Jurisdiction) relating to bulk sales which are applicable to the sale of the
Acquired Assets hereunder;
BUSINESS DAY means a day on which banks are open for business in London
and New York City (excluding Saturdays, Sundays and public holidays);
CANADIAN ASSETS means all right, title, and interest in and to, as the
same shall exist on the Closing Date, all of the assets, business, properties
and rights of every nature, kind and description of the Canadian Vendor used in
or relating to the Canadian Business, wheresoever located and whether or not
reflected on the books and records of the Canadian Vendor, including all of its
prepayments, deposits and escrows, Accounts Receivable, Inventory, Tangible
Property, Real Property, Permits, Software, Contract Rights (other than Contract
Rights with respect to the Contracts identified on Schedule 13) Intangible
Property and goodwill, and claims, causes of action and other legal rights and
remedies related to the foregoing; provided, however, that, any term or
provision hereof to the contrary notwithstanding, the Canadian Assets shall not
include any of the Excluded Assets;
CANADIAN ASSUMED LIABILITIES has the meaning given to it in Section
2.2.4;
CANADIAN BUSINESS means the energy cables business conducted by the
Canadian Vendor which, together with the US Business, constitutes the
Operations, summary details of which are contained or referred to in Schedule 1;
CANADIAN EXCLUDED LIABILITIES has the meaning given to it in Section
2.2.6;
CASH EQUIVALENTS means "cash equivalents" as defined by the accounting
policies and principles set out in Schedule 7;
CLOSING means the closing of the sale and purchase of the Acquired
Assets and the assumption of the Assumed Liabilities pursuant to this Agreement;
CLOSING DATE means the date on which the Closing takes place;
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COLLECTIVE BARGAINING AGREEMENTS means the legally recognized
agreements, including benefit agreements, letters of understanding and
identified past practices between US Vendor or Canadian Vendor and any labor
union or organization lawfully recognized to represent the employees of any
facility;
CODE means the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder;
COMBINED ACCOUNTS means the accounts of the US Vendor and the Canadian
Vendor relating to the Operations for the twelve-month financial period ended on
the Balance Sheet Date, extracted from the aggregated accounts of the Global
Operations for such financial period audited by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, copies of which
are included in the Disclosure Letter;
CONFIDENTIAL INFORMATION has the meaning given to it in Section 19.3.3;
CONTINUING EMPLOYEES means those employees of the US Vendor or the
Canadian Vendor who will become employees of Purchaser on or after Closing;
CONTRACT RIGHT means any right, power or remedy of any nature under any
Contract, including rights to receive property or services or otherwise derive
benefits from the payment, satisfaction or performance of another person's
obligations, rights to demand that another person accept property or services or
take any other actions, and rights to pursue or exercise remedies or options;
CONTRACTS means any written or oral contract, agreement, instrument,
order, arrangement, commitment or understanding of any nature, including sales
orders, purchase orders, leases, subleases, data processing agreements,
maintenance agreements, license agreements, sublicense agreements, loan
agreements, promissory notes, instruments, security agreements, pledge
agreements, deeds, mortgages, guaranties, indemnities, warranties, employment
agreements, consulting agreements, sales representative agreements, joint
venture agreements, buy-sell agreements, options or warrants including
quotations or tenders for contracts which remain open for acceptance;
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DATA ROOM means collectively the data room containing documents
relating to the Vendors and its Affiliates at the offices of Linklaters &
Paines, 1345 Avenue of the Americas, New York, New York, at the US Vendor's
Lawyers and at ▇▇▇▇▇▇ & Elliot, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇;
DISCLOSURE LETTER means the letter which is arranged in Sections
corresponding to the Sections of this Agreement of even date with this Agreement
from the Vendors to the Purchasers disclosing (i) information, in reasonable
detail, which constitutes exceptions to the Warranties and (ii) details of other
matters referred to in this Agreement;
DOLLAR or $ means United States dollar;
EMPLOYEE BENEFIT ARRANGEMENTS means (i) any "employee welfare benefit
plan" or "employee pension benefit plan" (as those terms are respectively
defined in sections 3(1) and 3(2) of ERISA), (ii) any pension, retirement or
supplemental pension plan or deferred compensation plan, incentive compensation
plan, savings plan, stock plan, retiree medical benefit, unemployment
compensation plan, vacation pay, severance pay, bonus or benefit arrangement,
insurance or hospitalization program or any other fringe benefit arrangements
for any current or former employee, director, consultant or agent, whether
pursuant to legislation, contract, arrangement, custom or informal
understanding, which does not constitute an employee benefit plan (as defined in
section 3(3) of ERISA), or (iii) any employment agreement;
EMPLOYEES means all persons employed by US Vendor or the Canadian
Vendor in the Operations, including, those persons on short or long-term
disability, leave of absence or legally required leave;
EMPLOYMENT LETTER means the letter from the Purchasers to the Vendors
supplied on the date hereof, as it may be updated in accordance with the terms
of Schedule 11, indicating which Employees with employment Contracts listed on
Section 1.1 of Schedule 12 of the Disclosure Letter will become Continuing
Employees (as to whom Purchasers will assume such employment Contracts) and
which Employees will not become Continuing Employees (which non-Continuing
Employees may include persons who may receive consulting agreements from the
Purchasers for a fixed period of time);
ENCUMBRANCE means any claim, charge, mortgage, easement, leasehold,
assessment, restriction, reservation, security, lien, security interest, pledge,
option, equity, power of sale,
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conditional sale, prior assignment, hypothecation or encumbrance, burden,
charge, adverse claim or third party right of any kind or nature whatsoever;
EXCLUDED ASSETS means the assets described or referred to in Schedule
17 which are excluded from the sale and purchase of the Acquired Assets set
forth in this Agreement;
EXCLUDED LIABILITIES has the meaning given to it in Section 2.2.6, and
includes all Asbestos Liabilities, ▇▇▇▇▇▇ Liabilities and Trenton Liabilities;
GENERAL SERVICES AND SUPPLY AGREEMENT means the service and supply
agreement to be entered into with effect from or following Closing, between or
among one or more of the persons included in the Vendors' Group and one or more
persons included in the Purchasers' Group;
GLOBAL OPERATIONS means the Operations (as defined herein) and the
"Operations" (as defined in the Non-North American Sale and Purchase Agreement),
taken as a whole;
GOVERNMENTAL AUTHORITY means any international, national, federal,
state, provincial, local, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, or any court or tribunal,
in each case whether of the United States or Canada or other jurisdiction;
HOLDING COMPANY means a company which controls, whether pursuant to an
agreement with other shareholders or otherwise, a majority of the voting rights
of another company;
INCOME TAX ACT (CANADA) means the Income Tax Act (Canada), R.S.C. 1985,
c.1 (5th Supp.), as amended, and the regulations prescribed thereunder;
IMPROVEMENTS mean all buildings and all other structures, parking
areas, fixtures or other improvements on, over or under the Land;
INCLUDING means including without limitation;
INTANGIBLE PROPERTY means any name, corporate name, fictitious name,
registered or unregistered trademark, trademark application, service ▇▇▇▇,
service ▇▇▇▇ application, trade name, brand name, product name, slogan, trade
secret, Know-how, patent, patent application, copyright,
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copyright application, design, logo, formula, invention, product right,
technology, or other intangible asset of any nature, whether in use, under
development or design, or inactive;
INVENTORY means all raw materials, supplies, work in progress,
packaging materials, finished goods, parts and any other inventory of any nature
whatsoever;
JUDGMENT means any order, writ, injunction, citation, award, decree or
other judgment of any nature of any foreign, federal, state, provincial or local
court, governmental body, administrative agency, regulatory authority or
arbitration tribunal;
JURISDICTIONS means the United States and Canada;
KNOW-HOW means confidential and proprietary industrial and commercial
information and techniques in any form (including paper, electronically stored
data, magnetic media, film and microfilm) including drawings, formula, test
results, reports, project reports and testing procedures, shop practices,
instruction and training manuals, tables of operating conditions, market
forecasts, specifications, quotations, tables, lists and particulars of
customers and suppliers, marketing methods and procedures, show-how and
advertising copy;
LAND means all that certain Real Property of the US Vendor or Canadian
Vendor (other than Excluded Assets) upon which the Improvements are located, as
more particularly described in Schedule 1 attached hereto and made a part
hereof, together with all property rights, easements, tenements, hereditaments,
rights-of-way, development rights, air rights, entitlements, unused densities,
privileges and appurtenances thereto; all leases, rents and profits derived
therefrom, all right, title and interest of the US Vendor and/or the Canadian
Vendor in and to any land lying in the bed of any street, road, highway or
avenue, open or proposed, public or private, in front of or adjoining all or any
part of the Land to the center line thereof, all right, title and interest of
the US Vendor and/or the Canadian Vendor in and to any unpaid award or payment
included in the Acquired Assets which may now or hereafter be payable in respect
of any taking, by condemnation of any portion of the Land or Improvements by any
Governmental Authority; and all right, title and interest of the US Vendor
and/or the Canadian Vendor in and to any unpaid award included in the Acquired
Assets for damage or destruction to the Land or any part thereof by reason of
any fire or other casualty, or resulting from any change of grade of any street,
road, highway or avenue adjacent to the Real Property of the US Vendor of the
Canadian Vendor; all strips and gores adjoining, and adjacent to the Land; and
all oil, gas and mineral rights;
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LAW means any provision of any foreign, federal, state, provincial or
local law, statute, ordinance, charter, constitution, treaty, code, rule,
Canadian guideline, policy or protocol, or regulation;
LEASED PROPERTY means the leased Real Property brief details of which
are set out in Schedule 1;
LIABILITIES means all liabilities, indebtedness, claims, demands,
damages, deficiencies, Judgments, actions, causes of action, duties and
obligations of every description, whether deriving from contract, common law,
statute or otherwise, whether present or future, actual or contingent,
ascertained or unascertained or disputed and whether owed or incurred severally
or jointly or as principal or surety;
LOSS OR LOSSES means all losses, Liabilities, costs (including costs of
investigation, interest costs, fines, penalties, and legal fees and costs),
charges, expenses, actions, proceedings, investigations, claims and demands;
MANAGEMENT ACCOUNTS means the unaudited management accounts relating to
the Operations for the financial period ending on February 28, 1999;
▇▇▇▇▇▇ LIABILITIES has the meaning given to it in Section 2.3.2(g);
MATERIAL CONTRACTS has the meaning given to it in Section 5.3.1 of
Schedule 8;
NET ASSET STATEMENT has the meaning given to it in Section 9.1;
NET ASSET VALUE means the aggregate of the value of the Acquired Assets
less the aggregate of all Assumed Liabilities as shown in the Net Asset
Statement;
NON-NORTH AMERICAN AGREEMENTS means the Non-North American Sale and
Purchase Agreement, the Non-North American Subsidiary Agreements and the
Non-North American Tax Deed of Covenant;
NON-NORTH AMERICAN SALE AND PURCHASE AGREEMENT means the Sale and
Purchase Agreement entered into on the date hereof between, among others, the
Vendors' Guarantor and the
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Purchasers' Guarantor in connection with the sale of the worldwide energy cables
operations of the Vendors' Guarantor other than the Operations;
NON-NORTH AMERICAN SUBSIDIARY AGREEMENTS means the Subsidiary
Agreements as defined in the Non-North American Sale and Purchase Agreement;
NON-NORTH AMERICAN TAX DEED OF COVENANT means Tax Deed of Covenant as
defined in the Non-North American Sale and Purchase Agreement;
OPERATIONS means, collectively, the US Business and the Canadian
Business, including without limitation, those operations briefly described on
Schedule 1 attached hereto and made a part hereof;
PAYMENT ACCOUNT DETAILS means, in relation to any payment to be made
under or pursuant to this Agreement, the name, account number, account location
and other details specified by the payee and necessary to effect payment
(whether by wire or other electronic means of transfer) to the payee;
PERMIT means any license, permit, approval, waiver, order,
authorization, consent, certificate of occupancy, order, warrant, confirmation,
permission, certificate, right or privilege of any nature, granted, issued,
approved or allowed by any Governmental Authority;
PERSON means any natural person, sole proprietorship, joint venture,
corporation, firm, association, partnership, limited liability partnership,
limited liability company, cooperative, estate, government, trust, governmental
body, administrative agency, regulatory authority or any other entity, whether
acting in an individual, fiduciary or other capacity;
(POUND) means British pounds sterling;
PURCHASE PRICE has the meaning given in Section 3.1;
PURCHASERS means the US PURCHASER and the CANADIAN PURCHASER and
PURCHASER means any of such Purchasers;
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PURCHASERS' GROUP means the Purchasers, their Subsidiaries and their
holding company, as such group may from time to time exist;
REAL PROPERTY means any real estate, Land, building, condominium, town
house, structure or other real property of any nature, all shares of stock or
other ownership interests in cooperative or condominium associations or other
forms of ownership interest through which interests in real estate may be held,
all leasehold estates with respect to any of the foregoing, and all appurtenant
and ancillary rights thereto, including easements, covenants, water rights,
sewer rights and utility rights, including, without limitation, the Improvements
and the Leased Properties, or any one or more of them;
RELEVANT PURCHASER means, when used to reflect any matter relating to
the purchase of the Canadian Assets, the Canadian Purchaser, and when used to
reflect any matter relating to the purchase of the US Assets, the US Purchaser;
RELEVANT VENDOR means, when used to reflect any matter relating to the
sale of the Canadian Assets, the Canadian Vendor, and when used to reflect any
matter relating to the sale of US Assets, the US Vendor;
REPORTING ACCOUNTANTS means Ernst & Young LLP, or another nationally
recognized firm of independent public accountants that are independent of the
Vendors' Group and the Purchasers' Group and are selected by agreement of the US
Vendor and the US Purchaser;
RESTRICTIVE COVENANTS has the meaning given in Section 19.23;
SCHEDULE 4 CONTRACTS has the meaning given to it in Section 2.3.2(e);
SENIOR EMPLOYEE means any Employee whose annual cash compensation
exceeds $90,000 or its local equivalent;
SENIOR EXECUTIVES means ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III, ▇▇▇▇ ▇. Berndorff,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ Prior, ▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇
▇▇▇▇▇▇;
SOFTWARE means any computer program, operating system, applications
system, firmware or software of any nature, whether operational, under
development or inactive, including all object
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code, source code, technical manuals, user manuals and other documentation
therefor, whether in machine-readable form, programming language or any other
language or symbols, and whether stored, encoded, recorded or written on disk,
tape, film, memory device, paper or other media of any nature;
SUBSIDIARY means, relative to any person, (x) any corporation,
association or other business entity more than 50% of the outstanding shares of
voting stock of which is owned directly or indirectly by such person and (y) any
partnership in which such person is a general partner;
TANGIBLE PROPERTY means any furniture, fixtures, leasehold
improvements, vehicles, equipment (including, without limitation, office,
computer and other equipment), machinery, tools, spare parts, forms, supplies
and other tangible personal property of any nature, whether such is owned or
leased;
TAX means any federal, state, provincial, local, or foreign income,
gross receipts, license, payroll, employment, health, social services,
education, excise, severance, stamp, occupation, premium, windfall profits,
environmental (including Taxes under Code Section 59A) customs, duties, capital
stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, goods and services, registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not;
TAX DEED OF COVENANT means the deed of covenant against liability for
Tax to be entered into by the US Vendor and the Canadian Vendor indemnifying the
US Purchaser and the Canadian Purchaser, as applicable;
TAX RETURN means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof;
TAX STATUTE OF LIMITATIONS DATE means the close of business on the 90th
day after the expiration of the applicable statue of limitations in respect of
the relevant Tax, including any extensions thereof (or if such date is not a
Business Day, the next Business Day);
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THIRD PARTY CONSENTS means all consents, permits, approvals,
authorizations or waivers required from third parties, other than Governmental
Authorities, for or necessary as a result of the conveyance, transfer,
assignment, novation or subletting of any of the Acquired Assets to any
Purchaser, including the Third Party Consents set forth on Schedule 4, and THIRD
PARTY CONSENT means any one of the Third Party Consents;
TRENTON LIABILITIES has the meaning given to it in Section 2.3.2(h).
US ASSETS means all right, title, and interest in and to, as the same
shall exist on the Closing Date, all of the assets, business, properties and
rights of every nature, kind and description of the US Vendor used in or
relating to the US Business, wheresoever located and whether or not reflected on
the books and records of the US Vendor, including without limitation, all of its
prepayments, deposits and escrows, Accounts Receivable, Inventory, Tangible
Property, Real Property, Permits, Software, Contract Rights (other than Contract
Rights with respect to the Contracts identified on Schedule 13), Intangible
Property and goodwill, and claims, causes of action and other legal rights and
remedies related to the foregoing; provided, however, that any term or provision
hereof to the contrary notwithstanding, the US Assets shall not include any of
the Excluded Assets;
US ASSUMED LIABILITIES has the meaning given to it in Section 2.2.1;
US BUSINESS means the energy cables business conducted by the US Vendor
which, together with the Canadian Business, constitutes the Operations;
US EXCLUDED LIABILITIES has the meaning given to it in Section 2.2.3;
US VENDOR'S LAWYERS means ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇ of ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇;
VENDOR OWNED REAL PROPERTY means the Real Property owned by the US
Vendor or the Canadian Vendor that is used in the Operations and is not an
Excluded Asset;
VENDORS means the US Vendor and Canadian Vendor and VENDOR means any of
such Vendors;
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VENDORS' GROUP means the US Vendor, the Canadian Vendor, the Vendors'
Guarantor and each Subsidiary of the Vendors' Guarantor, as such group may from
time to time exist; provided, however, that after giving effect to the Closing,
Vendors' Group shall cease to include the Group Companies, as defined in the
Non-North American Sale and Purchase Agreement;
WARRANTIES means the representations and warranties of the Vendors
contained in this Agreement (including the Schedules hereto) and the Tax Deed of
Covenant and WARRANTY means any one of the Warranties.
1.2 SUBORDINATE LEGISLATION
Any reference to a statutory provision shall include any rules or
regulations made from time to time under that provision which are in force at
the date of this Agreement.
1.3 [INTENTIONALLY OMITTED]
1.4 SCHEDULES, ETC.
References herein to this Agreement shall include the Schedules and
Subschedules to this Agreement and references to Sections are to Sections to
this Agreement or Sections to the Schedules and/or Subschedules.
1.5 CONFLICT
The provisions of this Agreement shall control in the event of any
conflict between the provisions in this Agreement and the Non-North American
Sale and Purchase Agreement with respect to the matters set forth in this
Agreement.
1.6 INFORMATION
Any reference herein to books, records or other information means
books, records or other information in any form including paper, electronically
stored data, magnetic media, film and microfilm.
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1.7 KNOWLEDGE
Any Warranty or statement of the Vendors qualified by the expression
"to the best knowledge of" or "so far as a person is aware" or any similar
expression with respect to any Vendor shall be deemed to refer to the actual
knowledge, as of the date such Warranties are made or deemed to be made, of such
Senior Executives after having made due and careful inquiry.
1.8 ACCOUNTING STANDARDS
Unless otherwise specified, all accounting terms used herein shall be
interpreted, and all accounting determinations and computations hereunder shall
be made, in accordance with the accounting policies and principles referred to
in Section 1 of Schedule 7 (exclusive, however, of Sections 2 and 3 of such
Schedule).
2 AGREEMENT TO SELL THE ACQUIRED ASSETS
2.1 SALE AND PURCHASE OF ACQUIRED ASSETS
Subject to the terms and conditions of this Agreement and the Tax Deed
of Covenant at Closing, the US Vendor shall sell the US Assets to the US
Purchaser, and the Canadian Vendor shall sell the Canadian Assets to the
Canadian Purchaser, and the US Purchaser shall purchase the US Assets and the
Canadian Purchaser shall purchase the Canadian Assets, in each case with the
benefit of the Warranties, covenants and indemnities contained in this
Agreement, free from all Encumbrances (except as expressly provided in this
Agreement or disclosed in the Disclosure Letter).
2.2 ASSUMPTION OF LIABILITIES
2.2.1 US ASSUMED LIABILITIES
Subject to Sections 2.2.2 and 2.2.3, the US Purchaser shall
assume, duly and punctually pay, satisfy, discharge, perform or fulfill all of
the following Liabilities of the US Vendor (collectively, the US ASSUMED
LIABILITIES):
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(a) arising under the Permits and Contracts of the US
Vendor (other than the Contracts listed on Schedule 17 and the employment
Contracts for Employees named in the Employment Letter who will not be
Continuing Employees);
(b) expressly assumed by the US Purchaser or any
other Relevant Purchaser (other than the Canadian Purchaser) elsewhere under
this Agreement; or
(c) any other Liabilities of the US Vendor, but only
to the extent that they are taken into account in the calculation of, or
provided for in, the Net Asset Statement.
2.2.2 TREATMENT OF CERTAIN PRE-CLOSING US LIABILITIES
Notwithstanding anything to the contrary contained in Section
2.2.1, unless included (or provided for) in the calculation of Liabilities in
the Net Asset Statement, US Purchaser shall not assume or be deemed to have
assumed any Liability of the US Vendor described below:
(a) to perform any obligation or pay any Liability of
the US Vendor which was required to be performed or paid prior to Closing;
including, payment of any salaries, compensation (excluding unused vacation,
sick or severance pay, whether or not accrued) rents, Taxes, utility charges and
any and all fees and charges due under the Permits and Contracts transferred or
assigned to or held in trust for or held for the benefit of the US Purchaser
pursuant to this Agreement for periods prior to Closing; or
(b) for or in respect of any product manufactured
and/or sold or service performed by the US Vendor prior to Closing, except to
the extent (but only to the extent) that such Liability in respect of any
product manufactured or service performed has resulted from any US Purchaser's
breach of its obligations under Section 12 hereof.
2.2.3 US EXCLUDED LIABILITIES
Notwithstanding anything to the contrary contained herein, US
Purchaser does not assume and shall in no event be liable for any Liabilities of
the US Vendor to any person, whether fixed or inchoate, known or unknown,
liquidated or unliquidated, secured or unsecured, contingent or otherwise,
except for those Liabilities specifically assumed by US Purchaser in Section
2.2. All
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Liabilities of the US Vendor not so assumed (collectively, US EXCLUDED
LIABILITIES) shall be and remain solely US Vendor's responsibility;
2.2.4 CANADIAN ASSUMED LIABILITIES
Subject to Sections 2.2.5 and 2.2.6, the Canadian Purchaser
shall assume, duly and punctually pay, satisfy, discharge, perform or fulfill
all of the following Liabilities of the Canadian Vendor (collectively, the
CANADIAN ASSUMED LIABILITIES):
(a) arising under the Permits and Contracts of the
Canadian Vendor (other than the Contracts listed on Schedule 17 and the
employment Contracts for Employees named in the Employment Letter who will not
be Continuing Employees);
(b) expressly assumed by the Canadian Purchaser
elsewhere under this Agreement; or
(c) any other Liabilities of the Canadian Vendor, but
only to the extent that they are taken into account in the calculation of, or
provided for in, the Net Asset Statement.
2.2.5 TREATMENT OF CERTAIN PRE-CLOSING CANADIAN LIABILITIES
Notwithstanding anything to the contrary contained in Section
2.2.4, unless included (or provided for) in the calculation of Liabilities in
the Net Asset Statement, Canadian Purchaser shall not assume or be deemed to
have assumed any Liability of the Canadian Vendor described below:
(a) to perform any obligation or pay any Liability of
the Canadian Vendor which was required to be performed or paid prior to Closing;
including payment of any salaries, compensation (excluding unused vacation, sick
or severance pay, whether or not accrued) rents, Taxes, utility charges and any
and all fees and charges due under the Permits and Contracts transferred or
assigned to or held in trust for or held for the benefit of the Canadian
Purchaser pursuant to this Agreement for periods prior to Closing; or
(b) for or in respect of any product manufactured
and/or sold or service performed by the Canadian Vendor prior to Closing, except
to the extent (but only to the extent) that
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such Liability in respect of any product manufactured or service performed has
resulted from any Canadian Purchaser's breach of its obligations under Section
12 hereof.
2.2.6 CANADIAN EXCLUDED LIABILITIES
Notwithstanding anything to the contrary contained herein,
Canadian Purchaser does not assume and shall in no event be liable for any
Liabilities of the Canadian Vendor to any person, whether fixed or inchoate,
known or unknown, liquidated or unliquidated, secured or unsecured, contingent
or otherwise, except for those Liabilities specifically assumed by Canadian
Purchaser in Section 2.2. All Liabilities of the Canadian Vendor not so assumed
(collectively, CANADIAN EXCLUDED LIABILITIES and together with the US Excluded
Liabilities, EXCLUDED LIABILITIES) shall be and remain solely Canadian Vendor's
responsibility.
2.2.7 SPECIAL PROVISIONS RELATING TO CERTAIN ENVIRONMENTAL
ISSUES
Notwithstanding any term or condition set forth in Schedule 16 relating to
environmental matters:
(a) US Vendor, upon receiving a request for payment,
from time to time, from US Purchaser, shall within thirty (30) days thereafter,
reimburse Purchaser dollar for dollar up to an aggregate maximum amount of
$500,000 for Purchasers' reasonable expenses (including internal overhead costs)
for machine guarding at any of the facilities used in the Operations. US
Vendor's obligations under this clause (a) shall constitute Vendors' sole
obligation to Purchasers for machine guarding and machine guarding obligations
relating to the Operations.
(b) US Vendor, upon receiving a request for payment,
from time to time, from US Purchaser, shall within thirty (30) days thereafter,
reimburse US Purchaser dollar for dollar up to an aggregate maximum amount of
$500,000, less any amount paid by US Vendor prior to Closing, for installation
of a cooling water recirculation system and other equipment or modifications
necessary to meet wastewater discharge limits at the Malvern, Arkansas facility.
"Other equipment" for this purpose includes a dry cure byproduct filter box; a
sump evaporator and an electric byproduct precipitator. US Vendor's obligations
under this clause (b) shall constitute Vendors' sole obligation to Purchasers
for improvements necessary to meet wastewater discharge limits at the Malvern,
Arkansas facility.
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(c) US Vendor, upon receiving a request for payment,
from time to time, from US Purchaser, shall within thirty (30) days thereafter,
reimburse US Purchaser dollar for dollar up to an aggregate maximum amount of
$350,000 for installation of a wastewater recirculation system or other
wastewater system modifications necessary to meet wastewater discharge limits at
the Wilimantic, Connecticut facility. US Vendor's obligations under this clause
(c) shall constitute Vendors' sole obligation to Purchasers for improvements
necessary to meet wastewater discharge limits at the Wilimantic, Connecticut
facility.
2.3 INDEMNIFICATION
The parties hereto agree as follows:
2.3.1 Survival; Assertion of Claims, etc.
(a) All representations, warranties and covenants of
the parties to this Agreement contained in this Agreement (or the Schedules
hereto) shall survive the Closing and continue in effect for the following
periods:
(i) The covenants of each party to this
Agreement shall continue until the obligations required to be performed or
satisfied by the covenants have been performed or satisfied;
(ii) The representations and warranties of the
US Vendor and Canadian Vendor shall expire as follows: (x) with respect to the
representations and warranties relating to the environment set forth on Schedule
16, five years after the Closing Date; (y) with respect to the representation
and warranties relating to Tax matters as set forth in the Tax Deed of Covenant,
until the end of the applicable Tax Statute of Limitations Date; and (z) with
respect to all other representations and warranties, two years after the Closing
Date; and
(iii) The representations and warranties of the
Purchasers' Guarantor and the Purchaser shall expire two years after the Closing
Date.
(b) Each party to this Agreement must assert any
claim for indemnification involving a representation, warranty or covenant
against the other party before the expiration of any applicable survival period.
Any indemnity claim pursuant to this Section 2.3 shall
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(if it has not been previously satisfied, settled or withdrawn) be deemed to be
withdrawn six months after the relevant time limit set forth above unless legal
proceedings in respect of such claim (i) have been commenced and (ii) are being
pursued in good faith and with reasonable diligence. Notwithstanding any
provision to the contrary contained in this Agreement (other than the preceding
sentence), so long as such indemnity claim is asserted timely, such claim will
continue to be valid and assertable even though the survival period may
subsequently expire before such claim is resolved.
(c) All claims for indemnification pursuant to this
Agreement or the Tax Deed of Covenant shall be subject to the limitations,
notice requirements, time periods and other terms and conditions of this Section
2.3.
2.3.2 INDEMNIFICATION OF PURCHASERS' INDEMNIFIED GROUP
The US Vendor and the Canadian Vendor shall, jointly
and severally, indemnify, defend and hold harmless the US Purchaser, the
Canadian Purchaser, the Purchasers' Guarantor and their officers, directors,
Affiliates, agents and representatives (collectively, the PURCHASERS'
INDEMNIFIED GROUP) from and against any and all Losses (including for purposes
of Section 2.3.2(e) only, consequential damages) with respect to the following:
(a) any misrepresentation or breach of Warranty,
covenant or agreement of the US Vendor or the Canadian Vendor contained in this
Agreement (or the Schedules hereto);
(b) any and all of the Vendors' Excluded Liabilities
whether known or unknown on the date hereof or on the Closing Date, and whether
or not such Liabilities constitute or arise from a breach of any Warranty made
by either Vendor herein, including any such Liability which is deemed to be, or
becomes, a Liability of any member of the Purchasers' Indemnified Group by
virtue of any applicable Law and which is not otherwise assumed by the
Purchasers under this Agreement;
(c) without duplication, any Losses which any member
of the Purchasers' Indemnified Group may suffer by reason of any member of the
Purchasers' Indemnified Group taking any reasonable action to avoid, resist or
defend against any Liability arising in connection with or referred to in
Section 2.3.2(a) or Section 2.3.2(b);
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(d) subject to the provisions of the Tax Deed of
Covenant, any Liability in respect of any Tax which each Relevant Purchaser is
indemnified against pursuant to the Tax Deed of Covenant;
(e) the Purchasers' failure to (i) receive any
necessary Third Party Consent with respect to any of the Contracts listed on
Schedule 4 (the SCHEDULE 4 CONTRACTS) or (ii) otherwise provide the Purchasers
with the economic benefits of the Schedule 4 Contracts;
(f) the presence or alleged presence of or exposure
by any person to any asbestos or asbestos-containing materials in any of the
materials or products manufactured, sold, or otherwise distributed by the US
Vendor or the Canadian Vendors prior to Closing, including such goods and
materials as are in process or in inventory as of the Closing Date (any such
Losses described in this clause (f) being, collectively, the ASBESTOS
LIABILITIES);
(g) any Liability in respect of lead detected in the
fill material at the Real Property used in the Operations located at Marion,
Indiana (the MARION LIABILITIES); provided that Purchaser does not voluntarily
undertake a sampling program within the fill area in an attempt to further
characterize the nature and extent of the alleged presence of lead or any other
constituent or compound at the Marion, Indiana Real Property site, nor does
Purchaser voluntarily undertake any soil-intrusive construction activities in
said fill area; and provided further that Vendors shall not be liable as result
of the foregoing to Purchaser for any claim by Purchaser for property damage to
Purchaser's Marion, Indiana Real Property arising out of or with respect to the
presence of lead in fill material as described herein. The provisions of Section
7.4 of Schedule 16 to this Agreement shall apply to any Remedial Action (as
defined in Schedule 16) required to be performed at the Marion, Indiana Real
Property; and
(h) any Liability in respect of solvent detected in
the soil or groundwater at the Trenton, Ontario facility (the TRENTON
LIABILITIES); provided that no Vendor shall be liable as result of the foregoing
to any Purchaser for any claim for property damage to the Trenton, Ontario Real
Property arising out of or with respect to the solvent in the soil or
groundwater as described herein. The provisions of Section 7.4 of Schedule 16 to
this Agreement shall apply to any Remedial Action (as defined in Schedule 16)
required to be performed at the Trenton, Ontario Real Property.
2.3.3 INDEMNIFICATION OF VENDORS' INDEMNIFIED GROUP
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The Purchaser and the Canadian Purchaser shall,
jointly and severally, indemnify, defend and hold harmless the US Vendor, the
Canadian Vendor and the Vendors' Guarantor and their officers, directors,
Affiliates, agents and representatives (the VENDORS' INDEMNIFIED GROUP) from and
against any and all Losses with respect to any of the following:
(a) any misrepresentation or breach of any
representation, warranty, covenant or agreement of the Purchasers contained in
this Agreement (or in any Schedule hereto);
(b) all Assumed Liabilities and any other Liability
to the extent such Liability arises as a result of the acts or omission of any
Purchaser and/or any other person in the course of carrying on the Operations
after Closing, including any such Liability which is or is deemed to be or
becomes a Liability of any member of the Vendors' Indemnified Group by virtue of
any applicable Law and which is not otherwise an Excluded Liability; and
(c) any Losses which any member of the Vendors'
Indemnified Group may suffer by reason of any member of the Vendors' Indemnified
Group taking any reasonable action to avoid, resist or defend against any
Liability referred to in Section 2.3.3(a) or (b).
2.3.4 Procedure
If any third party shall notify any party to this
Agreement (an INDEMNIFIED PARTY) with respect to any matter which may give rise
to a claim for indemnification against any other party (an INDEMNIFYING PARTY)
under this Section 2.3, then the Indemnified Party shall notify the Indemnifying
Party thereof promptly; provided, however, that no delay on the part of the
Indemnified Party in notifying any Indemnifying Party shall relieve the
Indemnifying Party from any liability or obligation hereunder, except to the
extent otherwise expressly provided herein or to the extent (but solely to the
extent) the Indemnifying Party thereby is damaged. In the event any Indemnifying
Party notifies the Indemnified Party within 15 days after the Indemnified Party
has given notice of the matter that the Indemnifying Party is assuming the
defense thereof, (i) the Indemnifying Party will defend the Indemnified Party
against the matter with counsel of its choice reasonably satisfactory to the
Indemnified Party, (ii) the Indemnified Party may retain separate co-counsel at
its sole cost and expense (except that the Indemnifying Party will be
responsible for the fees and expenses of the separate co-counsel to the extent
counsel to the Indemnified Party concludes reasonably that it has a conflict of
interest), (iii) the Indemnified Party will not consent to the entry of any
Judgment or enter into any settlement with respect to the matter without the
written
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consent of the Indemnifying Party (not to be withheld or delayed unreasonably),
and (iv) the Indemnifying Party will not consent to the entry of any Judgment
with respect to the matter, or enter into any settlement which does not include
a provision whereby the plaintiff or claimant in the matter releases the
Indemnified Party from all Liability with respect thereto, without the written
consent of the Indemnified Party (not to be withheld or delayed unreasonably).
If the Indemnifying Party fails to notify the Indemnified Party within 15 days
after the Indemnified Party has given notice of the matter that the Indemnifying
Party is assuming the defense thereof, the Indemnified Party may defend against
the matter in any manner it reasonably may deem appropriate.
2.3.5 LIMITATIONS ON INDEMNIFICATION
(a) No person included in the Purchasers' Indemnified
Group shall be entitled to any recovery with respect to any claim for
indemnification under this Agreement or the Tax Deed of Covenant in respect of
any such claim arising from any single circumstance or series of related
circumstances if the amount of such claim (excluding interest, costs and
expenses) does not exceed $20,000; provided that claims relating to a series of
related circumstances shall be aggregated for this purpose;
(b) No person included in the Purchasers' Indemnified
Group shall be entitled to recover with respect to any claim for indemnification
under this Agreement or the Tax Deed of Covenant until the aggregate amount of
all such claims exceeds $750,000 (the BASKET), in which event the Purchasers'
Indemnified Group shall, subject to the other provisions of this Section 2.3.5
be entitled to such indemnification for all amounts, including all amounts
forming any part of the Basket; and
(c) The aggregate amount of Liability of the Vendors'
Guarantor, US Vendor, Canadian Vendor and any other member of Vendors' Group
under this Agreement, the Tax Deed of Covenant and the Non-North American
Agreements shall not exceed (pound)160 million (the CAP), it being understood
that any Liabilities for indemnification arising under Section 2.3.2(e) of this
Agreement or Clause 11.4 of the Non-North American Sale and Purchase Agreement
shall not be applied against the Cap but shall only be applied against and shall
be limited to the Contract Cap (as defined below).
(d) Any term or provision of this Section 2.3.5 to
the contrary notwithstanding, (i) no provision of clauses (a), (b) or (c) of
this Section 2.3.5 shall apply to (x) any
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Excluded Liabilities (including Asbestos Liabilities, ▇▇▇▇▇▇ Liabilities and
Trenton Liabilities), (y) any Liability resulting from any breach of any
Warranty set forth in Section 8.1.1, 8.4.1 or 9.9.15 of Schedule 8 or (z) any
Liability in respect of any matter described to Clause 2.3.1 or 8.10 of the Non-
North American Sale and Purchase Agreement, and (ii) the aggregate amount of
Liability of the Vendors' Guarantor, US Vendor, Canadian Vendor and any other
member of Vendors' Group under Section 2.3.2(e) of this Agreement and Clause
11.4 of the Non-North American Sale and Purchase Agreement shall not exceed
(pound)10 million (the CONTRACT CAP), it being understood that any amount of
Liability under such Section 2.3.2(e) and Clause 11.4 shall be applied against
the Contract Cap only and shall not be applied against the Cap.
2.3.6 INSURANCE PROCEEDS
Notwithstanding any contrary provision in this
Section 2.3, any recovery with respect to a claim asserted hereunder will be
reduced by the amount of any insurance proceeds actually recovered by the
claimant which directly relates to such claim. The indemnified party agrees to
diligently pursue all claims covered by any insurance policy.
2.3.7 TAXES
In calculating the Liability of the Vendors or
Vendors' Guarantor under this Section 2.3, there shall be taken into account the
amount (if any) by which any Tax for which a Relevant Purchaser would otherwise
have been accountable or liable to be assessed is actually reduced or
extinguished as a result of the matter giving rise to such Liability. The amount
of such reduction or extinguishment shall be reasonably determined (in writing
with appropriate detail) by the independent certified accounting firm or
chartered accountants which prepares or reviews the relevant Tax Returns on
behalf of the Relevant Purchaser. A copy of such determination shall be
delivered promptly to the Vendors' Guarantor upon its request.
2.3.8 CONTINGENT LIABILITIES
No person included in the Purchasers' Indemnified
Group shall be entitled to recover with respect to any claim for indemnification
under this Agreement or the Tax Deed of Covenant in respect of any Liability
which is contingent unless and until such contingent liability becomes an actual
liability and is due and payable; provided that this Section 2.3.8 shall not
operate to avoid an indemnity claim made in respect of a contingent liability
within the applicable time limits
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specified in Section 2.3.1 if such indemnity claim is asserted on a timely basis
and in accordance with Section 2.3.1 (even if such liability does not become an
actual liability until after the expiry of such period).
2.3.9 PROVISIONS IN THE ACCOUNTS
No person included in the Purchasers' Indemnified
Group shall be entitled to recover with respect to any claim for indemnification
under this Agreement or the Tax Deed of Covenant in respect of any such claim if
any allowance, provision or reserve is made for the matter giving rise to such
claim in the Net Asset Statement (regardless of whether the allowance, provision
or reserve is adequate to cover such claim).
2.3.10 OTHER LIMITATIONS
No person included in the Purchasers' Indemnified
Group shall be entitled to recover with respect to any claim for indemnification
under this Agreement or the Tax Deed of Covenant in respect of any matter, act,
omission or circumstance (or any combination thereof) (including the aggravation
of a matter or circumstance) to the extent that the same would not have occurred
but for:
(a) any change in accounting or Tax policy, basis or
practice introduced or becoming effective after the Closing Date;
(b) the effectiveness of, or any change in, any Law,
rule or regulation or, to the extent generally available, any published
administrative practice of any Governmental Authority, including any increase in
the rates of Tax or any imposition of Tax or any withdrawal of relief from Tax,
occurring after the date of this Agreement; or
(c) any act or omission of a Relevant Purchaser or
any member of the Purchasers' Group, or their respective directors, employees or
agents or successors in title, which occurs after the Closing and which is
outside the ordinary course of business.
2.3.11 NET BENEFIT
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To the extent that, as a result of any event or
circumstance giving rise to a claim for indemnification, a person included in
the Purchasers' Indemnified Group receives a corresponding savings or net
benefit resulting from such event or circumstance, the amount of such claim for
indemnification shall be reduced by the amount of such savings or benefit. In
the case of any Tax Matter, the amount of such savings or benefit shall be
reasonably determined (in writing with appropriate detail) by the independent
certified accounting firm or chartered accounting firm which prepares or reviews
the relevant Tax Returns on behalf of the Relevant Purchaser. A copy of such
determination shall be delivered promptly to the Vendors' Guarantor upon its
request.
2.3.12 MITIGATION OF LOSS
Each Purchaser hereby covenants and agrees, for
itself and each other member of the Purchaser's Indemnified Group, for the
benefit of the members of the Vendors' Group, that after a claim for indemnity
under this Agreement, the Non-North American Agreements or the Tax Deed of
Covenant has arisen or is reasonably likely to arise, it shall take all
commercially reasonable actions to mitigate the Losses of the members of the
Vendors' Group under this Section 2.3; provided that (x) all reasonable costs
and expenses (including overhead and administrative costs and expenses) of the
Purchasers or any other member of Purchasers' Indemnified Group resulting from
such actions shall be reimbursed by the Vendors and (y) no Purchaser shall be
required to take any action under this Section 2.3.12 which is outside of the
ordinary course of the Operations.
2.3.13 PRIOR RECEIPT
If any member of the Vendors' Group pays an amount in
discharge of any claim for indemnity under this Agreement or the Tax Deed of
Covenant and a member of the Purchasers' Indemnified Group subsequently recovers
(whether by payment, discount, credit, relief or otherwise) from a third party a
sum which is referable to the subject matter of such claim and which would not
otherwise have been received by such member of the Purchasers' Indemnified
Group, the Purchasers shall pay, or shall procure that the Relevant Purchaser
pays, to the US Vendor or the Canadian Vendor, as applicable, an amount equal to
the lesser of (i) the sum recovered from the third party less any reasonable
costs and expenses incurred in obtaining such recovery or (ii) the amount
previously paid by the member of the Vendors' Group to discharge such claim for
indemnity.
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2.3.14 DOUBLE CLAIMS
The members of the Purchasers' Indemnified Group
shall not be entitled to recover from any member of the Vendors' Group under
this Agreement, the Non-North American Agreements or the Tax Deed of Covenant
more than once in respect of the same damage suffered. In furtherance and not in
limitation of the foregoing, the member of the Vendors' Group shall not be
liable in respect of any breach of this Agreement if and to the extent that the
Losses are or have been included in a claim under the Tax Deed of Covenant or
the Non-North American Agreements which has been satisfied, nor shall the
members of the Vendors' Group be liable in respect of a claim under the Tax Deed
of Covenant or the Non-North American Agreements if and to the extent that the
Losses are or have been included in a claim for breach of this Agreement which
has been satisfied.
2.3.15 ENVIRONMENTAL CLAIMS
In the event of any conflict between this Agreement
and the provisions of Schedule 11, 12 or 16, the provisions of such Schedule
shall supersede and control any conflicting Sections of this Agreement.
2.3.16 CONSEQUENTIAL AND PUNITIVE DAMAGES
No member of the Purchasers' Indemnified Group shall
be entitled to indemnification pursuant to this Agreement (i) with respect to
consequential damages arising out of or in connection with this Agreement,
except no such limitation shall apply with respect to such damages arising out
of or in connection with the breach of the Restrictive Covenants or the failure
to obtain the Third Party Consents or otherwise provide the Purchasers with the
economic benefits of the Schedule 4 Contracts as set forth in Section 2.3.2(e),
or (ii) with respect to punitive damages arising out of or in connection with
this Agreement other than resulting from Vendors' fraud. In furtherance of the
foregoing, no member of the Purchasers' Indemnified Group shall institute,
directly or indirectly, and each Purchaser hereby permanently waives, on its
behalf and on behalf of all other members of Purchasers' Indemnified Group, any
right to commence any action or proceeding of any kind claiming consequential or
punitive damages; provided, however, no such limitation or waiver shall apply
to, and any member of the Purchasers' Indemnified Group shall continue to have
the right to commence an action or proceeding claiming consequential damages
with respect to the breach of the Restrictive Covenants or the failure to obtain
the Third Party
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Consents or otherwise provide the Purchasers with the economic benefits of the
Schedule 4 Contracts as set forth in Section 2.3.2 (e) or claiming punitive
damages with respect to Vendors' fraud.
3 CONSIDERATION
3.1 AMOUNT AND PAYMENT
(a) The aggregate consideration for the purchase of the
Acquired Assets and the assumption of the Assumed Liabilities pursuant to this
Agreement shall be an amount (such amount, as adjusted pursuant hereto, the
PURCHASE PRICE) which is equal to (pound)104.4 million;
(b) The Purchase Price and the Assumed Liabilities shall be
allocated as set out in Schedule 3. The consideration is exclusive of any
transfer Taxes in respect of which the provisions of Schedule 10 shall apply.
The Purchase Price shall be paid by the US Purchaser on behalf of itself and the
Canadian Purchaser to the US Vendor on behalf of itself and the Canadian Vendor,
or as otherwise agreed by the US Purchaser and the US Vendor. The determination
of the allocations of the Purchase Price and the amount of Assumed Liabilities
among the Acquired Assets as set forth on Schedule 3 shall be made in accordance
with Section 1060 of the Code and by mutual agreement of the US Vendor and the
US Purchaser with respect to the US Assets and by mutual agreement between the
Canadian Vendor and Canadian Purchaser with respect to the Canadian Assets. Each
of the US Vendor, the Canadian Vendor, the Vendors' Guarantor and the Relevant
Purchaser shall sign and submit all necessary forms to report this transaction
for Tax purposes of any Governmental Authority, in whichever combination
necessary, in accordance with Schedule 3, and shall not take a position for Tax
purposes inconsistent therewith.
3.2 ADJUSTMENTS
The Purchase Price may be reduced or increased in accordance
with the provisions of Section 9 or in accordance with any other provisions of
this Agreement stated to take effect as an adjustment to the Purchase Price. Any
adjustment to the Purchase Price shall be allocated as provided by Temp. Treas.
Reg. Sec. 1.1060-IT(f) (or any successor regulation).
3.3 METHOD OF PAYMENT
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Wherever in this Agreement provision is made for payment by
one party (the PAYER) to another (the PAYEE), such payment shall be made by wire
transfer of immediately available funds to an account designated by the payee as
specified in the Payment Account Details of the payee.
4 CONDITIONS
4.1 CONDITIONS PRECEDENT
The respective obligations of the parties to this Agreement to
consummate the transactions to be performed by them pursuant to this Agreement
are subject to the satisfaction of the following conditions:
4.1.1 the passing at a general meeting of the Vendors'
Guarantor of a resolution to approve the transactions contemplated by this
Agreement;
4.1.2 the Non-North American Sale and Purchase Agreement
becoming unconditional in accordance with its terms (other than the satisfaction
of any condition relating to this Agreement);
4.1.3 any waiting period applicable to the acquisition of the
Acquired Assets under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
as amended (the HSR ACT) shall have terminated or expired;
4.1.4 no action, suit or proceeding shall be pending or
threatened before any Governmental Authority wherein an unfavorable Judgment,
order, decree, stipulation, injunction or charge would (i) prevent consummation
of any of the transactions contemplated by this Agreement, or (ii) cause any of
the transactions contemplated by this Agreement to be rescinded following
consummation (and no such Judgment, order, decree, stipulation, injunction or
change shall be in effect); and
4.1.5 the Non-North American Sale and Purchase Agreement shall
not have terminated pursuant to Section 4.5 as a result of a Material Adverse
Effect (as defined in such agreement).
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4.2 RESPONSIBILITY FOR SATISFACTION
4.2.1 The Vendors shall use their best efforts to ensure the
satisfaction of the condition set out in Section 4.1.1 as soon as reasonably
practicable after the date hereof subject to compliance by the directors of the
Vendors' Guarantor with their fiduciary duties.
4.2.2 The Vendors' Guarantor shall, as soon as reasonably
practicable after the date hereof, mail a circular to the shareholders of the
Vendors' Guarantor so as to inform them of this Agreement and so as to convene
the general meeting of the Vendors' Guarantor referred to in Section 4.1.1 on or
before May 15, 1999.
4.2.3 Each of the US Purchaser and US Vendor will as soon as
practicable after the date hereof make all filings which are required to be made
with any Governmental Authority under the HSR Act in connection with the
transactions contemplated by this Agreement. Notwithstanding the foregoing, with
respect to the HSR Act, neither the US Vendor nor the US Purchaser shall be
required to:
(i) divest or hold separate any assets including
assets of any Affiliate; or
(ii) agree to any limitation on their respective
freedom of action with respect to, or their ability to retain any of their (or
their Affiliate's) other assets or businesses.
4.2.4 The US Purchaser and US Vendor shall promptly inform
each other of all communications with any Governmental Authority in connection
with the condition referred to in Section 4.1.3.
4.2.5 Without limitation to the generality of the provisions
set forth in this Section 4.3, all requests and inquiries from any Governmental
Authority shall be dealt with by the US Vendor and the US Purchaser in
consultation with each other.
4.2.6 The Vendors and the Purchasers shall each use all
reasonable commercial efforts to cause the condition set forth in Section 4.1.2
to be satisfied as soon as reasonably practicable.
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4.2.7 The Vendors' Guarantor shall promptly give notice to the
US Purchaser of the satisfaction of the condition set out in Section 4.1.1, but
not later than the close of business on the day following satisfaction of such
condition.
4.2.8 The US Purchaser shall promptly give notice to the
Vendors' Guarantor of satisfaction of the condition in Section 4.1.3, but not
later than the close of business on the day following the satisfaction of each
such condition.
4.3 TERMINATION
4.3.1 The parties to this Agreement may terminate this
Agreement as follows:
(a) the parties to this Agreement may terminate this
Agreement by mutual written consent of all the parties at any time prior to the
Closing;
(b) the Purchasers may terminate this Agreement by
giving written notice to the Vendors at any time prior to the Closing if the
Closing shall not have occurred on or before July 31, 1999 by reason of the
failure of any condition precedent under Section 4.1 (unless the failure results
primarily from either Purchaser being in material breach of any warranty, or
covenant contained in this Agreement); or
(c) the Vendors may terminate this Agreement by
giving written notice to the US Purchaser at any time prior to the Closing if
the Closing shall not have occurred on or before July 31, 1999 by reason of the
failure of any condition precedent under Section 4.1 (unless the failure results
primarily from the Vendors being in material breach of any Warranty, or covenant
contained in this Agreement).
4.3.2 In the event of termination of this Agreement as
provided in Section 4.3.1, this Agreement shall forthwith become void and have
no effect, without any liability or obligation on the part of any party, other
than the provisions of Sections 19.1, 19.2 and 19.8 and except to the extent
that such termination results from the willful and material breach by a party of
any of its representations, warranties, covenants or other agreements set forth
in this Agreement.
5 ACTION PENDING CLOSING
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5.1 VENDORS' GENERAL OBLIGATIONS
Pending Closing the Vendors shall:
5.1.1 conduct the Operations as a going concern in the
ordinary course of business; and
5.1.2 subject to Section 5.3, allow the Purchasers and their
agents, upon reasonable notice and at reasonable times, reasonable access to the
Vendors' personnel, facilities and assets and to all existing books, records,
Tax Returns, work papers and other documents and information relating to the
Operations; permit and assist Purchasers and Purchasers' representatives to
contact the Vendors' customers, prospects and suppliers; and provide Purchasers
and Purchasers' representatives with such copies of the existing books, records,
Tax Returns, work papers and other documents and information relating to the
Operations and with such additional financial, operating and other data and
information regarding the Operations, as Purchasers may reasonably request;
provided that the obligations of the Vendors under this Section shall be subject
to any applicable confidentiality agreements relating to the Operations and
shall not extend to allowing access to information which is reasonably regarded
as confidential to the activities of Vendors' Group otherwise than in connection
with the Operations.
5.2 RESTRICTIONS ON VENDORS
5.2.1 Without prejudice to the generality of Section 5.1.1,
between the period from the date hereof to the Closing Date, the Vendors shall
discuss with representatives of the Purchasers (nominated in advance by the
Purchasers for such purpose and agreed to in writing by the US Vendor) in
reasonable detail those actions that are material to the Operations, and the
Vendors shall not, without the prior written consent of the Purchasers, which
consent in the case of subsection (h) will not be unreasonably withheld or
delayed :
(a) conduct the Operations in any manner except in
the ordinary course of business it being agreed and understood that all
established procedures for the approval of Contracts shall continue to be
followed; or
(b) except for liabilities incurred in the ordinary
course of business (which for purposes hereof shall include budgeted capital
expenditures within the approval limits of the
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general management of the Operations), pay or incur or agree to pay or incur any
amount, obligation or Liability relating to such Operations (absolute or
contingent) (including in respect of any purchase, lease or other acquisition of
assets) that is more than $150,000 in any specific case or $400,000 in the
aggregate; or
(c) grant any general or uniform increase in the
rates of pay or benefits to the Employees (or any class thereof) in excess of
3.5% per annum; or, except in connection with any severance or termination that
will occur prior to Closing, enter into any new severance agreement that would
be required to be disclosed pursuant to the Warranties contained herein; or
enter into any collective bargaining agreement with respect to the Operations
other than as may be required by Law or Contract; or
(d) except in the ordinary course of business, sell,
transfer, mortgage, encumber, abandon or otherwise dispose of any assets or
Liabilities relating to the Operations, except (x) for dispositions of property
not greater than $400,000 in the aggregate, (y) dispositions of Inventory
relating to the Operations in the ordinary course of business or (z) as
contemplated by this Agreement; or
(e) grant credit to any customer or distributor of
the Operations on terms substantially more favorable than the terms on which
credit has been extended to such customer or distributor in the past or change
the terms of any credit previously extended; or
(f) settle any dispute, waive any right or cancel any
debt or claim on behalf of or relating to the Operations other than in the
ordinary course of business or that involves a payment or loss of benefit to the
Operations in excess of $150,000;
(g) take any action or omit to take any action, which
action or omission will result in a breach of its Warranties and covenants
contained herein;
(h) enter into any Material Contract; provided that
this covenant shall not apply to (i) any Material Contract resulting from the
submission in the of ordinary course of business of any bid or tender on or
prior to the date hereof for the supply or manufacture of products or services
or (ii) any supply or delivery of products pursuant to a purchase order under
any supply Contract in effect on the date hereof; or
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(i) make any material changes in the terms or
conditions of employment of, or employ, or agree to employ, any Senior Employee.
5.2.2 Between the date hereof and the Closing, the Vendors
shall, in good faith, use all commercially reasonable efforts to preserve the
Operations intact, retaining the services of the current employees, salesmen,
contractors, agents and representatives of the Operations and maintaining the
good will of suppliers, customers and persons having business relations in
respect of the Operations.
5.2.3 Between the date hereof and the Closing, the Vendors
shall (i) conduct the Operations in the ordinary course in a manner consistent
with past practices, (ii) maintain all material Insurance policies, Permits and
the material Contracts which are material to the Operations in full force and
effect and (iii) comply in all material respects with all applicable Permits and
Laws.
5.3 PURCHASERS' GENERAL OBLIGATIONS
Each Purchaser hereby covenants and agrees that, prior to
Closing, only those employees, directors, agents, representatives or advisors of
Purchasers who have been identified in writing to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III, ▇▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇ ▇. Berndorff shall communicate with any employees, agents,
representatives, advisors, suppliers, customers or prospects of the Vendors
regarding the transactions contemplated by this Agreement or visit any of the
Real Properties.
6 CLOSING
6.1 DATE AND PLACE
Closing shall take place at the offices of US Vendor's Lawyers
or at such other location agreed to by the parties, on the last Business Day of
the US Vendor's accounting period (as set out in Part 2 of Schedule 6) which
occurs after each of the conditions precedent set forth in Section 4.1 is
satisfied or waived as permitted pursuant to this Agreement or at such other
place, time or date as may be agreed between the US Purchaser and the US Vendor,
provided that such later date shall be the last Business Day of an accounting
period of the US Vendor;
6.2 CLOSING EVENTS
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On Closing, the parties shall cause the events set forth in
Part 1 of Schedule 6 for which they are respectively responsible to occur.
Either party may waive the obligations of the other party as set forth in Part 1
of Schedule 6.
6.3 PAYMENT OF PRICE
At the Closing against delivery of the Acquired Assets free
and clear of all Encumbrances (except for such Encumbrances expressly permitted
in this Agreement), and assumption of the Assumed Liabilities pursuant to the
terms of this Agreement, the US Purchaser on behalf of itself and the Canadian
Purchaser shall pay the US Vendor on behalf of itself and the Canadian Vendor,
in the manner specified in Section 3.3, an amount which is equal to the amount
set forth in Section 3.1.
7 REPRESENTATIONS AND WARRANTIES
7.1 REPRESENTATIONS AND WARRANTIES FROM THE VENDORS; INCORPORATION
OF SCHEDULE 8
Knowing that the Purchasers are relying thereon, each of the Vendors,
jointly and severally, represent and warrant to the Purchasers as set forth on
Schedule 8, and, with respect to Vendors' Warranties set forth therein,
Schedules 11 and 16, subject in each case to any matter which is disclosed in
the Disclosure Letter.
7.2 WARRANTIES FROM THE PURCHASERS
Knowing that the Vendors are relying thereon, each of the
Purchasers, jointly and severally, represent and warrant to the Vendors as set
forth on Schedule 9 and, with respect to Purchasers' representations and
warranties set forth therein, Schedules 11 and 16.
7.3 UPDATING TO CLOSING
7.3.1 The Vendors further represent and warrant to the
Purchasers that:
(i) subject to matters disclosed in the Disclosure
Letter, the Warranties (other than those set out in Schedule 5) shall be true
and accurate in all respects and not misleading in any respect at Closing, in
each case as if they had been given at Closing; and
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(ii) if prior to Closing, any Vendor shall become
aware of any event or circumstance which results in or is reasonably likely to
result in any of the Warranties being unfulfilled, untrue, misleading or
incorrect in any material respect at Closing, the US Vendor shall promptly
notify the US Purchaser in writing thereof prior to Closing.
7.3.2 The Purchasers further represent and warrant to the
Vendors that if prior to the Closing, any Purchaser shall become aware of any
event or circumstance which results in or is reasonably likely to result in any
of the Warranties being untrue, misleading or incorrect in any material respect
at Closing, such Purchaser shall promptly notify the US Vendor in writing
thereof prior to Closing.
8 [INTENTIONALLY OMITTED]
9 NET ASSET STATEMENT, AND ADJUSTMENTS TO THE PURCHASE PRICE
9.1 BASIS OF PREPARATION OF NET ASSET STATEMENT
As soon as practicable and in any event not later than 40 days
following the Closing Date, the US Vendor shall prepare, or cause to be
prepared, a statement (the NET ASSET STATEMENT) of the aggregate amount of the
Acquired Assets less the aggregate amount of the Assumed Liabilities as at
Closing, determined in accordance with the principles set forth in Schedule 7.
9.2 PREPARATION OF NET ASSET STATEMENT
9.2.1 The draft Net Asset Statement shall be delivered to the
US Purchaser by the US Vendor within 60 days following the Closing Date. Prior
to such delivery, the US Vendor shall so far as is practicable consult with the
US Purchaser with a view to reducing the potential areas of disagreement
relating to such draft Net Asset Statement.
9.2.2 In order to enable the US Vendor to prepare and the US
Vendor's accountants to review the draft Net Asset Statement, the Purchasers
shall keep up-to-date and make available to the US Vendor's representatives and
to the US Vendor's accountants all books and records relating to the Operations
during normal office hours and co-operate with them with regard to the
preparation and review of the draft Net Asset Statement. The Purchasers agree,
in so far as it is reasonable to do so, to make available the services of the
Employees (at reasonable times and
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upon reasonable notice and at reasonable intervals) to assist the US Vendor in
the performance of its duties under this Agreement.
9.2.3 Unless within 60 days of delivery of the draft Net Asset
Statement pursuant to Section 9.2.1, the US Purchaser gives notice to the US
Vendor that it disagrees with the draft Net Asset Statement or any item thereof,
which notice shall state the reasons for such disagreement in reasonable detail
and specify the adjustments which in the US Purchaser's opinion should be made
to the draft Net Asset Statement in order to comply with the requirements of
this Agreement (the US PURCHASER'S DISAGREEMENT NOTICE), the draft Net Asset
Statement shall be final and binding on the parties for all purposes. If the US
Purchaser timely delivers a valid US Purchaser's Disagreement Notice within such
60-day period, the parties shall attempt in good faith to reach agreement in
respect thereof and, if they are unable to do so within 21 days of such
notification, either party may by notice to the other require that the draft Net
Asset Statement be referred to the Reporting Accountants (an APPOINTMENT
NOTICE).
9.2.4 Within 21 days of the giving of an Appointment Notice,
the US Vendor may by notice to the US Purchaser indicate that, in the light of
the fact that the US Purchaser has not accepted the draft Net Asset Statement in
its entirety, it wishes the Reporting Accountants to consider matters relating
to the Net Asset Statement in response to those specified in the US Purchaser's
Disagreement Notice, such notice stating in reasonable detail the reasons for
such additional consideration and in what respects the US Vendor believes that
the draft Net Asset Statement should be altered (the US VENDOR'S DISAGREEMENT
NOTICE).
9.2.5 The Reporting Accountants shall be engaged jointly by
the parties on the terms set out in this Section 9.2 and otherwise on such terms
as shall be agreed; provided that neither party shall unreasonably (having
regard, inter alia, to the provisions of this Section 9.2) refuse its agreement
to terms proposed by the Reporting Accountants or by the other party. If the
terms of engagement of the Reporting Accountants have not been settled within 30
days of their identity having been determined (or such longer period as the
parties may agree) then, unless one party is unreasonably refusing its agreement
to those terms, those accountants shall be deemed never to have become the
Reporting Accountants and new Reporting Accountants shall be selected in
accordance with the provisions of this Agreement.
9.2.6 Except to the extent that the parties agree otherwise,
the Reporting Accountants shall determine their own procedure except that:
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(a) apart from procedural matters and as otherwise
set out in this Agreement, the Reporting Accountants shall determine only:
(i) whether any of the arguments for an
alteration to the draft Net Asset Statement put forward in the US Purchaser's
Disagreement Notice or the US Vendor's Disagreement Notice is correct in whole
or in part; and
(ii) if so, what alterations should be made
to the draft Net Asset Statement in order to comply with the requirements of
this Agreement;
(b) the Reporting Accountants shall apply the
principles set out in Schedule 7;
(c) the Reporting Accountants shall make their
determination pursuant to Section (a) above as soon as is reasonably practicable
but in any event, unless otherwise specified, within 40 days of the referral to
them; and
(d) the procedure of the Reporting Accountants shall:
(i) provide the parties a reasonable
opportunity to make written and oral submissions to them;
(ii) require that the parties supply each
other with a copy of any written submissions at the same time as they are made
to the Reporting Accountants;
(iii) permit each party to be present while
oral submissions are being made by any other party; and
(iv) provide that the Reporting Accountants
shall not be entitled to determine the scope of their own jurisdiction.
9.2.7 The Reporting Accountants' determination pursuant to
Section 9.2.6(a) shall (i) be made in writing and delivered to the parties
promptly and (ii) unless otherwise agreed by the parties include reasons, in
reasonable detail, for each relevant determination.
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9.2.8 The determination of the Reporting Accountants of any
matter falling within their jurisdiction shall be final and binding on the
parties upon delivery thereof pursuant to Section 9.2.7, except in the event of
manifest error (when the relevant part of their determination shall be void and
the matter shall be remitted to the Reporting Accountants for correction). In
particular, without limitation, the determination of the Reporting Accountants
shall be deemed to be incorporated into the draft Net Asset Statement, which
shall then be final and binding on the parties except in the case of manifest
error as provided herein.
9.2.9 The expenses of the Reporting Accountants shall be borne
as they shall direct at the time they make any determination under Section
9.2.6(a) or, in the absence of such direction, equally between the US Purchaser,
on the one hand, and the US Vendor, on the other.
9.2.10 The parties shall co-operate with the Reporting
Accountants and comply with their reasonable requests made in connection with
the carrying out of their duties under this Agreement. In particular, without
limitation, the Purchasers shall keep up to date and, subject to reasonable
notice, make available to the Vendors' representatives, the Vendors' accountants
and the Reporting Accountants, all books and records relating to the Operations
during normal office hours during the period from the appointment of the
Reporting Accountants to the making of the relevant determination.
9.2.11 Subject to Section 9.2.12, nothing in this Section 9.2
shall entitle a party or the Reporting Accountants access to any information or
document which is protected by legal professional privilege, or which has been
prepared by the other party or its accountants or other professional advisors
with a view to assessing the merits of any claim or argument.
9.2.12 A party shall not be entitled by reason of Section
9.2.11 to refuse to supply such part or parts of documents as contain only the
facts on which the relevant claim or argument is based.
9.2.13 Each party and the Reporting Accountants shall, and
shall cause each of their respective accountants and other advisors to keep all
information and documents provided to them pursuant to this Section 9.2
confidential and shall not use the same for any purpose, except for use in
connection with the preparation of the Net Asset Statement, the proceedings of
the Reporting Accountants or another matter arising out of this Agreement or in
defending any claim or argument or alleged claim or argument relating to this
Agreement or its subject matter.
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9.3 NET ASSET STATEMENT
Once the US Vendor and the US Purchaser reach (or pursuant to
Section 9.2.3 are deemed to reach) agreement on the draft Net Asset Statement or
the draft Net Asset Statement is finally determined at any stage of the
procedures set out in this Section 9:
9.3.1 the draft Net Asset Statement as so agreed or determined
shall constitute the Net Asset Statement for the purposes of this Agreement and
shall be final and binding on the parties; and
9.3.2 the Net Asset Value shall be derived from the Net Asset
Statement.
9.3.3 NET ASSETS
The parties hereto agree as follows:
(a) if the Net Asset Value is less than (pound)138
million (the AGREED UPON NET ASSET VALUE), then the US Vendor
(on behalf of itself and the Canadian Vendor) shall pay to the
US Purchaser (on behalf of itself and the Canadian Purchaser)
an amount equal to the difference between the Agreed Upon Net
Asset Value and the Net Asset Value; or
(b) if the Net Asset Value is more than the Agreed
Upon Net Asset Value, then the US Purchaser (on behalf of
itself and the Canadian Purchaser) shall pay to the US Vendor
(on behalf of itself and the Canadian Vendor) an amount equal
to the difference between the Net Asset Value and the Agreed
Upon Net Asset Value;
such payment to be made no later than the third Business Day following agreement
or determination of the Net Asset Statement in accordance with this Section 9;
9.3.4 Where any payment is required to be made pursuant to
this Section 9.3:
(a) interest shall accrue on the relevant amount
calculated from the Closing Date in accordance with Section 19.10;
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(b) the Purchase Price shall be deemed reduced or
increased accordingly; and
(c) the allocation of the consideration in Schedule 3
shall be adjusted accordingly in such manner as the US Vendor on behalf of
itself and the Canadian Vendor and the US Purchaser on behalf of itself and the
Canadian Purchaser shall agree in accordance with Schedule 3.
10 TRANSFER TAXES
The provisions of Schedule 10 shall apply.
11 POST-CLOSING DATE CONTRACT PAYMENTS RECEIVED BY THE VENDORS
To the extent that any payment is made to the Vendors in
respect of any Contract after the Closing Date, the Vendors shall receive the
same as trustee and pay the same to the Purchasers (net of any Tax payable by
the Vendors thereon) as soon as reasonably practicable following receipt.
12 DEFECTIVE PRODUCT OR SERVICE
12.1 RESPONSIBILITY ALLOCATION
The Vendors and the Purchasers agree that any defective
product (as defined in Section 12.2 below) manufactured (as defined in Section
12.2 below) and/or sold or defective service (as defined in Section 12.2 below)
supplied prior to Closing in connection with the Operations shall be the
responsibility of the US Vendor or Canadian Vendor, as the case may be; and that
any defective product manufactured and/or sold or defective service supplied
after Closing in connection with the Operations shall be the responsibility of
the US Purchaser or Canadian Purchaser, as the case may be.
12.2 DEFINITIONS
A "defective product" or a "defective service" means a product
or service supplied or provided in connection with the Operations that does not
conform to its express or implied
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contractual requirements, whether in terms of performance, quality, time of
delivery or in any other respect. A product shall be considered as
"manufactured" when it has successfully passed through final testing at the
factory of the Operations and any reference to manufacturing or manufacture in
this Section 12 shall have such a meaning.
12.3 VENDOR RECEIVES CLAIM
(a) If, following Closing, a Vendor receives a claim from any
person in respect of a defective product manufactured and/or sold or defective
service supplied before Closing, it shall inform the Purchasers immediately and
take steps to investigate, report on, and take (in its view) appropriate and
prompt remedial action in respect of such defective product or defective
service.
(b) If the claim can be settled by a payment alone, the US
Vendor or the Canadian Vendor, as appropriate, shall be responsible for meeting
the contractual obligations of the supplier/provider of the defective product or
defective service in that respect.
(c) If the claim involves the supply of a replacement and/or
the removal, repair and reinstallation of the defective product or the
re-engineering or re-doing of work pursuant to a service supplied, the Relevant
Purchaser shall, perform the necessary work for such Vendor, at Purchaser's
fully absorbed manufacturing cost plus 5%.
(d) If the claim involves both a payment and the repair or
replacement of a product or part of a product or the re-engineering or other
re-doing of work in respect of a service, the payment shall remain the
responsibility of the Vendors, but the provisions of clause (c) above shall
apply to the repair, replacement or re-engineering.
12.4 PURCHASER RECEIVES CLAIM
If, following Closing, a claim in respect of a defective
product manufactured and sold or defective service supplied before Closing is
received by the US Purchaser or Canadian Purchaser, such Purchaser shall
promptly notify the Vendors of the claim and:
12.4.1 if, in the joint opinion of US Vendor and US Purchaser,
the claim is partly or wholly justified on contractual grounds, the US Purchaser
or the Canadian Purchaser, as appropriate, shall take all reasonable steps as
instructed by the Relevant Vendor, without prejudicing
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the legitimate interests of the Vendors, to repair, replace and make good the
defective product or defective service and/or compensate the claimant to the
extent appropriate in accordance with the terms of the relevant applicable
contract. The US Vendor and/or the Canadian Vendor shall indemnify and hold
harmless the Relevant Purchaser against all Losses which arise in connection
with the repair, replacement or making good of the defective product or
defective service, provided that if the Losses result from the repair or
replacement of a product or part of a product or the re- engineering or other
re-doing of work in respect of a service, the US Vendor's and Canadian Vendor's
obligation with respect to such indemnity shall be limited to the Relevant
Purchaser's fully absorbed manufacturing cost of such repair plus 5%; and
12.4.2 where the US Vendor and the US Purchaser are unable to
reach agreement on the extent to which the claim is justified and how it is to
be dealt with within 21 days of either party receiving notice of the claim (both
parties acting reasonably and negotiating in good faith), the Purchasers shall
be entitled to take such action with respect to the claim as they believe is
appropriate, provided, however, in dealing with the claim each Purchaser shall
use its commercially reasonable efforts to minimize the costs.
12.5 VENDORS RECEIVE CLAIM FOR POST-CLOSING PRODUCT OR SERVICE
If a claim in respect of a defective product manufactured and
sold or defective service supplied after Closing is made against a Vendor, it
shall inform the Purchasers promptly and the Purchasers shall be solely
responsible for such claim, and the Purchasers shall indemnify and hold harmless
the Vendors against all Losses which arise in connection with such claim.
12.6 CLAIM MADE FOR PRODUCT OR SERVICE SPANNING CLOSING
If a claim is made against the Vendors or Purchasers after
Closing in respect of a defective product partly manufactured or defective
service partly supplied in the period both before and after Closing, unless the
defect can be clearly established as being wholly attributable to acts or
omissions either before or after Closing (in which case either Section 12.3,
Section 12.4 or 12.5 (as the case may be) above shall apply), the costs to
satisfy the claim shall be shared equally between the Relevant Vendor and the
Relevant Purchaser.
12.7 INDEMNITIES REDUCED BY RECOVERY FROM THIRD PARTIES
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Indemnities applicable under this Section 12 shall be reduced
to the extent a Vendor or a Purchaser is able to recover any costs incurred
either from insurance or from a third party, and each of the Vendors and the
Purchasers undertake to use all commercially reasonable efforts to review the
possibility of all such recoveries and act accordingly, keeping the other fully
informed of its actions, and (in the case of legal proceedings) consulting with
the other at each stage of the proceedings.
13 THIRD PARTY CONSENTS
13.1 FAILURE TO ASSIGN
If the Vendors cannot assign to the Relevant Purchaser at
Closing any of the Contracts which are being transferred to Relevant Purchaser
pursuant to this Agreement because a required Third Party Consent has not been
obtained, then such Contracts shall not be assigned by the Vendors at Closing,
but:
13.1.1 shall be held in trust for or for the benefit of the
Relevant Purchaser from Closing until such Third Party Consent is obtained, at
which time the Relevant Vendor shall assign such Contracts to the Relevant
Purchaser. Pending such assignment the Relevant Purchaser shall perform (as
agent or sub-contractor of the Relevant Vendor) all the obligations of the
Relevant Vendor thereunder and the Relevant Vendor shall otherwise cooperate in
any reasonable arrangements proposed by the Relevant Purchaser designed to
obtain for the Relevant Purchaser the benefits of the Contract which is being
held in trust for or for the benefit of the Relevant Purchaser. If such Contract
prohibits the Relevant Purchaser from acting as an agent or sub-contractor of
the Relevant Vendor, then, if requested by the Relevant Purchaser, the Relevant
Vendor shall do (or cause to be done) all such acts as may be required for the
performance of such Contract so as to provide the Relevant Purchaser with the
benefits, subject to the burdens on the basis provided in this Agreement, of
such Contract;
13.1.2 the Relevant Vendor shall, at the request of the
Relevant Purchaser and at the cost of the US Vendor, make or assist the Relevant
Purchaser in making application for and obtaining any such Third Party Consent,
such that the Third Party Consent is effective from Closing. The Relevant
Purchaser shall supply to the Relevant Vendor such information and references
regarding the financial position of the Relevant Purchaser as may reasonably be
requested by the Relevant Vendor and shall enter into such direct covenants in
favour of any relevant third party as
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may reasonably be requested in respect of any rents, royalties, fees or other
outgoings or liabilities for which the Relevant Purchaser will subsequent to
Closing become liable. If required by any third party, the Relevant Purchaser
shall give such reasonable additional covenants requested by any third party as
a condition to receiving such Third Party Consent and shall generally use all
reasonable endeavours to secure such consent; and
13.1.3 for such time as any Contracts are being held in trust
for or for the benefit of the Relevant Purchaser, the Relevant Vendor will (so
far as it lawfully may) give all reasonable assistance to the Relevant Purchaser
to enable the Relevant Purchaser to enforce its rights under such Contracts.
13.2 INDIANA LEASE
The Lease for the Indianapolis polymer plant (the INDIANAPOLIS
LEASE) shall not be assigned to the Purchasers at Closing, but shall
nevertheless be held in trust for the benefit of the US Purchaser and the US
Purchaser shall be entitled to all of the benefits of the Indianapolis Lease
from and after the Closing. In connection therewith, the US Purchaser shall be
permitted to occupy the facility and operate the plant which is the subject of
the Indianapolis Lease. The US Purchaser shall comply with all of the
obligations of the lessee under the Indianapolis Lease except for the rental
obligations under Section 3 thereof. The parties have agreed that the US Vendor
will pay to the Landlord all rental payments due under Section 3 of the
Indianapolis Lease through and until December 26, 2005. The US Purchaser will
pay to the US Vendor the amount of $336,700 per annum, payable in two equal
installments on each December 15 and June 15 occurring during the period from
the date hereof until December 26, 2005, and the US Purchaser shall perform all
of the other obligations of the US Vendor under the Indianapolis Lease from and
after the Closing; provided, however, that the US Vendor agrees to take such
action as may be reasonably requested by the US Purchaser on its behalf to
maintain, preserve, protect, exercise or the like, any and/or all of the
tenant's rights under the Indianapolis Lease. In the event the US Purchaser
fails to make the payment it is required to make as described above after the
expiration of 10 days after receipt of notice from US Vendor, in addition to any
other remedies which may be available under law or hereunder, the US Vendor may
elect to terminate US Purchaser's right to occupy the facility and recover
possession thereof as if this Agreement constituted a sublease of such premises
to US Purchaser. The US Purchaser shall operate and maintain the facility
pursuant to Section 8 of the
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Indianapolis Lease, shall maintain insurance pursuant to Section 10 of the
Indianapolis Lease, and shall have the right to require the US Vendor to
exercise the lessee's rights under the Indianapolis Lease, including, without
limitation, those rights specified in: Section 11 (Rights to Assign or
Sublease); Section 12 (Lease Renewal; Purchase Options); Section 13 (Notices for
Renewal and Purchase; Determination of Fair Market Value); and Section 14
(Obsolescence Termination); PROVIDED, HOWEVER, that (1) US Purchaser shall have
no right to assign its rights hereunder with respect to the Indianapolis Lease
or to sublease the premises leased thereby without the prior written consent of
US Vendor, such consent not to be unreasonably withheld, delayed or conditioned
and US Purchaser shall have no right to require that US Vendor exercise the
lessee's rights specified in Section 11 of the Indianapolis Lease UNLESS in
either instance (i) US Purchaser shall indemnify and hold US Vendor harmless
from and against any and all liability which may arise as a result of such
assignment or sublease or the exercise of such rights, as the case may be, and
(ii) the form of the indemnity agreement and the financial condition of the
indemnitor shall be reasonably satisfactory to US Vendor; (2) in connection with
any renewal or extension of the term of the Indianapolis Lease, US Vendor shall
be released by the landlord from all prospective liability and obligations
thereunder accruing from and after December 26, 2005, (3) in connection with the
exercise of any purchase option, either (a) US Vendor shall be released by the
landlord under the Indianapolis Lease from all liability and obligations in
connection with the purchase of the Real Property underlying the Indianapolis
Lease or (b) US Purchaser shall indemnify and hold US Vendor harmless from and
against any and all Liability which may arise as a result of the exercise of
such purchase option and shall assume all obligations which relate to the
purchase of such Real Property. The US Vendor agrees that it will neither amend
nor consent to any amendment to the Indianapolis Lease without the prior written
consent of the US Purchaser, which consent may be withheld in the US Purchaser's
sole and absolute discretion. The US Vendor and its Affiliates will have no
further obligation to perform under the Indianapolis Lease after December 26,
2005. The US Purchaser and the Purchasers' Guarantor hereby indemnify and hold
harmless the Vendors' Indemnified Group from and against all Losses that they
may incur under or with respect to the Indianapolis Lease from and after the
Closing Date other than the payment obligations set forth above, or any other
default by the US Vendor pursuant to the terms and provisions of this Section.
The US Vendor and the Vendors' Guarantor hereby indemnify and hold harmless the
Purchasers' Indemnified Group from and against all Losses that they may incur
under or with respect to the Indianapolis Lease from and after the Closing Date
with respect to the US Vendor's failure to perform its obligations under this
Section, or with respect to any lawsuit, action or cause of action brought by
the "Owner Trustee" under the Indianapolis Lease for a default with respect to
the payment obligations set forth above, or the performance of any obligation
required of the US Vendor thereunder.
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14 EMPLOYEES
The terms and conditions set forth in Schedules 11, 11A, 11B and 11C
are hereby incorporated into this Agreement by reference.
15 EMPLOYEE BENEFIT ARRANGEMENTS
The terms and conditions set forth in Schedule 12 are hereby
incorporated into this Agreement by reference.
16 ENVIRONMENTAL
The terms and conditions set forth in Schedule 16 are hereby
incorporated into this Agreement by reference.
17 POST-CLOSING OBLIGATIONS
17.1 THE ASSUMED LIABILITIES
17.1.1 If the Vendors become aware after Closing of any claim
which constitutes or may constitute an Assumed Liability, the Vendors shall as
soon as reasonably practicable give written notice thereof to the Purchasers and
shall not admit, compromise, settle, discharge or otherwise deal with such claim
without prior consultation with and the prior agreement of the Purchasers.
17.1.2 The Vendors shall, at the Purchasers' expense, take
such action as the Purchasers may reasonably request to avoid, dispute, resist,
appeal, compromise, defend or mitigate any claim which constitutes an Assumed
Liability, in each case subject to the Vendors being indemnified and secured to
their reasonable satisfaction by the Purchasers against all Losses which may
thereby be incurred. In connection therewith, the Vendors shall make or cause to
be made available to the Purchasers or their duly authorized agents, at the
Purchasers' cost, on reasonable notice during normal business hours, all
relevant accounting books and records, and correspondence relating to the
Operations which have been retained by the Vendor (and shall permit the
Purchasers to make copies thereof) for the purposes of enabling the Purchasers
to ascertain or extract any information relevant to the claim.
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17.2 BONDS AND GUARANTEES
17.2.1 The Purchasers shall use their best efforts with the
Vendors' assistance to cause, effective from the Closing Date, the release of
the Vendors or any person included in the Vendor Group from any bonds or
guarantees issued by banks or other financial service providers on behalf of any
of them in respect of the Operations (relating to non-completed contracts) as
shown in Schedule 18 (for the period up to and including December 31, 1998, and
after December 31, 1998 to Closing for such bonds or guarantees entered into in
the ordinary course of the Operations) or in any event as soon as practicable
after Closing.
17.2.2 After Closing but prior to such release the Purchasers
will indemnify and hold harmless the Vendors (for themselves and as trustee for
each member of the Vendors' Group) from and against any Losses arising after
Closing in respect of any such bonds or guarantees (including drawings
thereunder) to the extent resulting from actions of the Purchasers or any member
of the Purchasers' Group relating to any such bonds or guarantees referred to in
Section 17.2.1 or their respective underlying contracts or tenders.
17.2.3 After Closing if any of the bonds or guarantees
referred to in Section 17.2.1 are drawn upon, then the Vendors will indemnify
and hold harmless the Purchasers for any Losses in respect of any such bonds or
guarantees (including drawings thereunder) to the extent resulting from the
actions of any Vendor (as the case may be) before Closing as agreed to by the
Vendors and Purchasers.
17.3 VENDORS' GENERAL OBLIGATIONS
If at any time after Closing, any Vendor or any person
included in the Vendors' Group receives any monies (other than insurance
proceeds) in respect of any claim included in the Acquired Assets or in respect
of any Accounts Receivable, then the appropriate Vendor or appropriate person
included in the Vendors' Group shall pay to the Purchasers as soon as reasonably
practicable after receipt of such monies, the amount received.
17.4 VENDORS' CONTINUING OBLIGATION
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Notwithstanding Closing, the Vendors shall execute such
documents and take such actions as the Purchasers may reasonably require for the
purpose of giving to the Relevant Purchaser the full benefit of all the
provisions of this Agreement.
17.5 CHANGE OF NAME
17.5.1 The Purchasers shall, subject to Section 17.5, have the
right to continue to use the trade marks and trade names that are Excluded
Assets on a royalty free, non-exclusive basis for a period of 12 months from the
Closing Date but solely on the products on and in the manner in which they were
being used immediately before Closing; provided that commencing 30 days from
Closing the US Purchaser shall, or shall cause that the Relevant Purchaser
shall, use its reasonable efforts to make clear on all publicity material
(excluding factory signs), bank checks, letterheads and invoices that the US
Business and the Canadian Business are part of the Purchasers' Group.
17.5.2 The Purchasers shall be entitled to use and have the
right to sublicense to any member of the Purchasers' Group (but only for so long
as such person remains a subsidiary (direct or indirect) of the Purchasers'
Guarantor) the name "BICC" only in conjunction with the name "General Cable" as
the name of any corporate entity, partnership, or other vehicle which, in all
cases, is primarily involved in the manufacture, sale or distribution of energy
cables.
17.5.3 The Purchasers shall be entitled to use and have the
right to sublicense to any member of the Purchasers' Group (but only for so long
as such person remains a subsidiary (direct or indirect) of the Purchasers'
Guarantor) the name "Brand ▇▇▇" only preceded by the name "General Cable" as the
name of any corporate entity, partnership or other vehicle which, in all cases,
is solely involved in the manufacture, sale or distribution of Specialty Cables
in the US, Canada or Mexico.
17.5.4 The Purchasers shall not be entitled to register, use
or otherwise employ the name "Brand ▇▇▇" on any Data Cable product wherever
manufactured or sold. The Purchasers acknowledge that the Vendors shall be
entitled to use the name "Brand ▇▇▇" on any Data Cable product world-wide and on
any Specialty Cables (other than sales to customers located in the US, Canada or
Mexico).
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17.5.5 The Vendors shall not be entitled to register, use or
otherwise employ the name "Brand ▇▇▇" on any cable sold to specialty cable
manufacturers located in the US, Canada or Mexico.
17.5.6 For the purpose of this Section 17.5:
"Specialty Cables" means cables sold or for use in
airplanes, ships, locomotives, trucks, or other
forms of vehicular transport (or otherwise
currently manufactured in the US by the Brand ▇▇▇
division of BICC Cables Corporation) other than
Data Cables.
"Data Cables" means cables primarily intended for
the transmission of data in local or wide area
networks, examples being category 5, 6 and 7 data
cables.
17.6 The Vendor hereby grants, and shall cause each member of the
Vendor's Group to grant, to each of the Relevant Purchasers with effect from
Closing a royalty-free, irrevocable, perpetual license to use the Intangible
Property and Know-How that are Excluded Assets and that are required for the
Operations (as conducted at Closing) to be used for the purposes of the
Operations, as each of the Operations develop from time to time, with a right to
sublicense such Intangible Property and Know-How to other members of the
Purchaser's Group.
17.7 INVESTMENT CANADA ACT
17.7.1 The Canadian Purchaser shall, within thirty days after
Closing, give notification of the purchase of the Canadian Assets by the
Canadian Purchaser as required by the Investment Canada Act.
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18 GUARANTEES
18.1 VENDORS' GUARANTEED OBLIGATIONS
In consideration of the Purchasers' Guarantor entering into
the guarantee in Section 18.3, the Vendors' Guarantor hereby unconditionally and
irrevocably guarantees to each of the Purchasers the due and punctual
performance and observance by the Vendors or any of their assignees pursuant to
Section 19.5.1 or 19.5.2 of all their obligations, commitments, undertakings,
warranties and indemnities under or pursuant to this Agreement or the Tax Deed
of Covenant (the VENDORS' GUARANTEED OBLIGATIONS).
18.2 GUARANTY
If and whenever any of the Vendors defaults for any reason
whatsoever in the performance of any of the Vendors' Guaranteed Obligations, the
Vendors' Guarantor shall forthwith upon written demand served in accordance with
this Agreement unconditionally perform (or cause the performance of) and satisfy
(or cause the satisfaction of) the Vendors' Guaranteed Obligations in regard to
which such default has been made in the manner prescribed by this Agreement and
so that the same benefits shall be conferred on the US Purchaser or the Relevant
Purchaser (as the case may be) as it would have received if the Vendors'
Guaranteed Obligations had been duly performed and satisfied by the Relevant
Vendor.
18.3 PURCHASER'S GUARANTEED OBLIGATIONS
In consideration of the Vendors entering into this Agreement,
the Purchasers' Guarantor hereby unconditionally and irrevocably guarantees to
the Vendors the due and punctual performance and observance by the US Purchaser,
the Canadian Purchaser, any Relevant Purchaser or any of their assignees
pursuant to Section 19.5.1 or 19.5.2 of all their obligations, commitments,
undertakings, warranties and indemnities under or pursuant to this Agreement
(the PURCHASER'S GUARANTEED OBLIGATIONS).
18.4 GUARANTY
If and whenever any of the Relevant Purchasers defaults for
any reason whatsoever in the performance of any of the Purchaser's Guaranteed
Obligations, the Purchasers' Guarantor
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shall forthwith upon written demand served in accordance with this Agreement
unconditionally perform (or cause performance of) and satisfy (or cause the
satisfaction of) the Purchaser's Guaranteed Obligations in regard to which such
default has been made in the manner prescribed by this Agreement and so that the
same benefits shall be conferred on the Vendors as it would have received if the
Purchaser's Guaranteed Obligations had been duly performed and satisfied by the
Relevant Purchaser.
19 OTHER PROVISIONS
19.1 ANNOUNCEMENTS
19.1.1 Pending Closing, the Vendors and the Purchasers shall,
subject to the requirements of Law or any regulatory body or the rules and
regulations of any recognized stock exchange, consult together prior to issuing
any formal announcement, press release, circular, or notice to shareholders,
employees, customers, suppliers, distributors and sub-contractors and to any
recognized stock exchange or other authorities or to the media or otherwise
which either party may desire or be required to make regarding this Agreement or
any of the transactions contemplated hereby or thereby.
19.1.2 No party shall, pending Closing, make or authorize or
issue any formal announcement, circular or other communication concerning this
Agreement or any of the transactions contemplated hereby or thereby unless (a)
the other party shall have approved such disclosure or (b) such disclosure is
required by applicable Law or the rules and regulations of an applicable stock
exchange.
19.1.3 If Closing does not take place, the Purchasers shall
forthwith promptly return all accounts, records, documents and papers of or
relating to the Vendors or the Operations which shall have been made available
to them and all copies, abstracts or other records derived from such materials
and expunge any information derived from such materials or otherwise concerning
the subject matter of this Agreement from any computer, wordprocessor or other
device containing information, provided that this shall not apply to information
available from public records or information acquired by a Relevant Purchaser
otherwise than from the Vendors or their agents.
19.2 CONFIDENTIAL INFORMATION
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19.2.1 The Vendors:
(a) shall not, and shall cause all other members of
the Vendors' Group, and each of their respective directors, officers or
employees or advisors or agents or representatives not to, disclose to any
person Confidential Information; and
(b) shall use reasonable efforts to prevent the
disclosure of Confidential Information by any person other than by members of
the Purchasers' Group; and
(c) in the event either Vendor is requested or
required (by oral question or request for information or documents in any legal
proceeding, interrogatory, subpoena, civil investigative demand or similar
process) to disclose any Confidential Information, the Vendors will notify the
Purchasers promptly of the request or requirement so that the Purchasers may
seek an appropriate protective order or waive compliance with the provisions of
this Section 19.2.1(c). If, in the absence of a protective order or the receipt
of a waiver under this Section 19.2.1(c), the Vendors are, on the advice of
counsel, compelled to disclose any Confidential Information to any tribunal, the
Vendors may disclose the Confidential Information to the tribunal. However, the
Vendors shall cooperate with the Purchasers in obtaining, at the reasonable
request and expense of the Purchasers, an order or other assurance that
confidential treatment will be accorded to such portion of the Confidential
Information required to be disclosed as the Purchasers shall designate.
19.2.2 The Purchasers:
(a) shall not, and shall cause all other members of
the Purchasers' Group and each of their respective directors, officers or
employees or advisors or agents not to disclose to any person Confidential
Information; and
(b) shall use reasonable efforts to prevent the
disclosure of Confidential Information by any person other than by members of
the Vendors' Group.
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19.3 PERMITTED DISCLOSURE, ETC.
19.3.1 Section 19.2.1 does not apply to:
(a) disclosure of Confidential Information to or at
the written request of a Relevant Purchaser;
(b) disclosure of Confidential Information required
to be disclosed by Law, regulation, any revenue authority or any stock exchange;
(c) disclosure of Confidential Information to
professional advisors for the purpose of advising a Vendor; provided that such
advisors shall be made aware of the confidential nature of such information;
(d) disclosure of Confidential Information for the
purposes of defending any claim under the Warranties (including making any
claims or counterclaims against third parties pursuant to Section 8.3.2); or
(e) Confidential Information which is in the public
domain other than by the Vendors' breach of Section 19.2.1.
19.3.2 Section 19.2.2 does not apply to:
(a) disclosure of Confidential Information to or at
the written request of a Relevant Vendor;
(b) disclosure of Confidential Information required
to be disclosed by Law, regulation, any revenue authority or any stock exchange;
(c) disclosure of Confidential Information to
professional advisors for the purpose of advising a Relevant Purchaser provided
that such advisors shall be made aware of the confidential nature of such
information; or
(d) Confidential Information which is in the public
domain other than by the Purchaser's breach of Section 19.2.2.
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19.3.3 For the purpose of this Agreement, CONFIDENTIAL
INFORMATION means, (i) for the purposes of Section 19.2.1 all information
relating to the Vendors' business, including but not limited to know-how, trade
secrets, customer and supplier lists, marketing plans and strategies, designs,
pricing and cost information, drawings, technical information and other
proprietary information relating to the Operations or financial or other affairs
(including future plans and targets) of the Vendors and which is not in the
public domain; and (ii) for the purposes of Section 19.3, all information
relating to the business, financial or other affairs (including future plans and
targets) of any company in the Vendors' Group, other than in respect of the
Operations, and which is not in the public domain.
19.4 INTEGRATION
This Agreement, together with the Schedules hereto, the
Disclosure Letter, and the Tax Deed of Covenant constitute the entire agreement
among the parties relating to the subject matter of this Agreement and supercede
all prior oral and written presentations, understandings, agreements,
representations, warranties or other information by or among the parties (or any
of their respective Affiliates, directors, officers, trustees, employees,
agents, accountants, attorneys or other advisors or representatives) with
respect to the subject matter hereof, and no such prior or subsequent oral
understanding, agreement, representation or warranty shall be or be deemed to be
a part of this Agreement, the Schedules hereto, the Disclosure Letter or the Tax
Deed of Covenant except in accordance with Section 19.6.
19.5 SUCCESSORS AND ASSIGNS; NO THIRD-PARTY BENEFICIARIES
19.5.1 Any of the Vendors or Purchasers may, except as
otherwise expressly provided in this Agreement and without the consent of the
other, assign to a wholly owned Subsidiary of such party the benefit of all or
any part of any other party's obligations under this Agreement; provided,
however, that such assignment shall not be absolute but shall be expressed to
have effect only for so long as the assignee remains a wholly owned Subsidiary.
19.5.2 This Agreement is, subject to Section 19.5.1, personal
to the parties to it. Accordingly, no party may, without the prior written
consent of the Purchasers and the Vendors' Guarantor, assign either this
agreement or any of its rights, interests or obligations under this Agreement;
provided, however, the US Purchaser and Canadian Purchaser and the Purchasers'
Guarantor may assign all of their rights hereunder and delegate all of their
obligations hereunder to
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any person to whom the US Purchaser or Canadian Purchaser sells a substantial
part of the assets of the US Business or Canadian Business and the Vendors and
the Vendors' Guarantor may assign all of their rights and delegate all of their
obligations hereunder to any person to whom the Vendors or the Vendors'
Guarantor sell a substantial part of their respective assets. This Agreement
shall bind, benefit, and be enforceable by and against each party hereto and its
successors and permitted assigns.
19.5.3 Unless specifically stated herein, this Agreement shall
not confer any rights or remedies upon any person other than the parties hereto
and their respective successors and permitted assigns.
19.6 AMENDMENTS AND WAIVERS
No amendment of any provision of this Agreement shall be valid
unless the same shall be in writing and signed by each of the parties hereto. No
waiver by any party of any default, misrepresentation, or breach of warranty or
covenant under this Agreement, whether intentional or not, shall be deemed to
extend to any prior or subsequent default, misrepresentation, or breach of
warranty or covenant under this Agreement or affect such occurrence.
19.7 REMEDIES
So far as is permitted by law and except in the case of fraud,
the parties agree and acknowledge that the only remedies available to the
Purchasers in connection with or arising out of this Agreement are set forth in
Section 2.3 of this Agreement.
19.8 THIRD PARTY COSTS
Except as set forth in Schedule 10, the Vendors shall bear all
legal, accounting and other third party costs and expenses incurred by them in
connection with this Agreement, and the Tax Deed of Covenant and the sale of the
Operations. The Purchaser shall bear all such costs and expenses incurred by it
and any other Relevant Purchaser.
19.9 COSTS TO ASSIGN CONTRACTS
The Vendors and Purchasers agree to co-operate and to use all
reasonable commercial efforts prior to and subsequent to Closing to ensure that
all Contracts included in the
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Acquired Assets are lawfully assigned to the Purchasers with effect from the
Closing or as soon as practicable thereafter or that the Purchaser otherwise
receives the benefits of such Contracts. If there are any reasonable costs or
expenses associated with assigning or otherwise transferring such Contracts
(including any rent, royalties, costs of obtaining estoppels or other fees or
payments made or required to be made in connection with the assignment or
transfer of any such Contracts) such reasonable cost or expenses shall be paid
by the Vendors; provided that, except as provided in Section 2.3.2(e), the
Vendors shall not be responsible for any Losses resulting from the failure of
Purchaser to obtain the benefits of any Contract to be assigned or transferred.
Each Purchaser shall take all commercially reasonable actions to eliminate or
reduce any costs or expenses that may be payable by a Vendor hereunder; provided
that (x) all reasonable costs and expenses (including overhead and
administrative costs and expenses) of the Purchasers resulting from such actions
shall be reimbursed by the Vendors and (y) no Purchaser shall be required to
take any action under this Section 19.9 which is outside of the ordinary course
of the Operations.
19.10 INTEREST
If any Vendor or any Relevant Purchaser defaults in the
payment when due of any sum payable under this Agreement or the Tax Deed of
Covenant (whether determined by agreement or pursuant to an order of a court or
otherwise) their Liability shall be increased to include interest on such sum
from the date when such payment is due until the date of actual payment (as well
after as before Judgment) at a rate per annum of 2 per cent above the base rate
for US dollar loans in New York from time to time of The Hong Kong and Shanghai
Banking Corporation Limited. Such interest shall accrue from day to day.
19.11 SET-OFF
Under no circumstances shall any amounts (if any) payable by
any Relevant Purchaser to any Vendor or by any Vendor to any Relevant Purchaser
pursuant to this Agreement be set off against each other or against any amounts
otherwise owing to any such party.
19.12 LONG STOP LIMITATION OF LIABILITY
Notwithstanding any other provision in this Agreement or any
provision in the Tax Deed of Covenant, under no circumstances shall any Vendor
or any other member of the Vendors'
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Group have any liability whatsoever pursuant to this Agreement, or the Tax Deed
of Covenant following the twentieth anniversary of the date of this Agreement.
19.13 EXCLUSIVITY
The Vendors and the Vendors' Guarantor will not (and the
Vendors will not cause or permit any of their Affiliates to) solicit, initiate
or encourage the submission of any proposal or offer from any Person relating to
any (A) liquidation, dissolution or recapitalization, (B) merger or
consolidation, (C) acquisition or purchase of a substantial portion of the
Acquired Assets, or (D) similar transaction or business combination involving
the Operations.
19.14 NOTICES
19.14.1 Any notice, consent or other communication required or
permitted to be given under this Agreement shall be in writing and shall be
sufficiently given or served if delivered or sent:
In the case of any of the Vendors and the Vendors'
Guarantor to such party care of:
BICC plc
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
T: 011-44-171-409-8000
F: 011-44-171-409-0070
Attention: The Company Secretary
of BICC plc.
and
BICC Cables Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: President
T: ▇▇▇-▇▇▇-▇▇▇▇
F: ▇▇▇-▇▇▇-▇▇▇▇
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with copies to
Mayer, Brown, & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇▇
T: ▇▇▇-▇▇▇-▇▇▇▇
F: ▇▇▇-▇▇▇-▇▇▇▇
and, in the case of any
claim relating to environmental matters,
additional copies to
▇▇ ▇▇▇▇▇▇▇▇ & Associates
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
T: ▇▇▇-▇▇▇-▇▇▇▇
F: ▇▇▇-▇▇▇-▇▇▇▇
In the case of any of the Relevant Purchasers or the
Purchasers' Guarantor to such party care of:
General Cable Corporation
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
General Counsel
with a copy to
Blank Rome ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇
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19.14.2 Any such notice or other communication shall be delivered
by hand or sent by fax or registered or certified mail, return receipt
requested, or overnight courier. If sent by fax such notice or communication
shall conclusively be deemed to have been given on the date transmitted if
confirmed within 24 hours thereafter by a signed original sent in one of the
other manners provided in this Section 19.14.2. If sent by registered or
certified mail, return receipt requested such notice or communication shall
conclusively be deemed to have been received three Business Days from the time
of mailing in the case of domestic mail in the United States, or five Business
Days from the time of mailing in the case of international mail. If sent by
overnight courier, such notice or communication shall conclusively be deemed to
have been received one Business Day from deposit for overnight delivery service.
Any party may change its address or fax number for notice purposes by giving
notice of the new address or fax number in accordance with this Section 19.14,
provided that any such change of address shall not be effective unless and until
received.
19.15 SEVERANCE
If any term or provision of this Agreement is held to be illegal
or unenforceable, in whole or in part, under any enactment or rule of Law, such
term or provision or part shall to that extent be deemed not to form part of
this Agreement but the enforceability of the remainder of this Agreement shall
not be affected.
19.16 REFERENCES TO THE REPORTING ACCOUNTANTS
Whenever any matter is referred under this Agreement (other than
Section 9) to the Reporting Accountants for determination, the provisions of
Section 9 which apply to the Reporting Accountants' determination of the Net
Asset Statement shall apply to their determination of any such matter.
19.17 GENERAL SERVICES AND SUPPLY AGREEMENT
The Vendors and the Purchasers hereby agree that they will use
their reasonable efforts to negotiate in good faith by Closing or as soon as
practicable thereafter the terms and conditions of any required General Services
and Supply Agreement.
19.18 COUNTERPARTS
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This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all the counterparts shall together
constitute one and the same instrument.
19.19 GOVERNING LAW AND SUBMISSION TO JURISDICTION
19.19.1 This Agreement and the Tax Deed Of Covenant shall be
construed, and the rights and obligations of the parties hereunder determined,
in accordance with and governed by the internal laws of the State of New York
(as permitted by Section 5-1401 of the New York General Obligations Law (or any
similar successor provision)) without giving effect to any choice of law rule
that would cause the application of the laws of any jurisdiction other than the
internal laws of the State of New York to the rights and duties of the parties;
provided, however, that in the event a claim for an Environmental Loss is made
pursuant to Schedule 16 hereof, the substantive Environmental Laws of the
jurisdiction or jurisdictions where the Real Property in question is located, or
where the Environmental Liability has otherwise arisen, shall apply.
19.19.2 For the purposes of any suit, action or proceeding
involving this Agreement and the Tax Deed of Covenant or any other documents to
be entered into pursuant to them, each of the Vendors, the Vendors' Guarantor,
the Purchasers and the Purchasers' Guarantor hereby expressly submits to the
jurisdiction of all federal and state courts sitting in the State of New York
and agrees that any order, process, notice of motion or other application to or
by any such court or a judge thereof may be served within or without such
court's jurisdiction by registered mail or by service in hand, provided that a
reasonable time for appearance is allowed, and each party agrees that such
courts shall have exclusive jurisdiction over any such suit, action or
proceeding commenced by either or both of said parties. Each of the Vendors, the
Vendors' Guarantor, the Purchasers and the Purchasers' Guarantor hereby
irrevocably waives any objection that it may have now or hereafter to the laying
of venue of any suit, action or proceeding arising out of or relating to this
Agreement and the Tax Deed of Covenant or any other documents to be entered into
pursuant to them, brought in any federal or state court sitting in the State of
New York and hereby further irrevocably waives any claim that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum.
19.19.3 THE PARTIES HERETO IRREVOCABLY WAIVE THE RIGHT TO A JURY
TRIAL IN CONNECTION WITH ANY LEGAL PROCEEDING RELATING TO THIS AGREEMENT
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AND THE TAX DEED OF COVENANT OR ANY OTHER DOCUMENTS TO BE ENTERED INTO PURSUANT
TO THEM OR THE ENFORCEMENT OF ANY PROVISIONS HEREOF OR THEREOF.
19.20 SETTLEMENT ATTEMPT
The parties agree that, except as provided in Section 19.23, any
claim or dispute between them arising out of or in connection with this
Agreement or any alleged breach of this Agreement shall be submitted promptly to
a senior executive of the US Vendor or the Vendors' Guarantor and a senior
executive of the US Purchaser who shall have authority to settle the claim, and
who shall meet in New York, New York, within 30 days of such submission to seek
in good faith an amicable settlement. In seeking an amicable settlement, the
parties may consult with a neutral third party mediator if both agree in
writing. Unless the parties agree to the contrary in writing, any advice or
decision of the mediator shall not be binding. Subject to Section 19.23, any
Claim which is not settled by the parties within sixty (60) days of notice
thereof first being given by either party to the other may be pursued by a party
in any court in accordance with Section 19.19.
19.21 APPOINTMENT OF PROCESS AGENTS
19.21.1 The Vendors' Guarantor irrevocably appoints CT Corporation
as its agent for the service of process in New York in relation to any matter
arising out of this Agreement, and the Tax Deed of Covenant service upon whom
shall be deemed completed whether or not forwarded to or received by the
Vendors' Guarantor.
19.21.2 The Vendors' Guarantor shall inform the Purchasers, in
writing, of any change in the address of its process agent within 28 days of
such change.
19.21.3 If such process agent ceases to have an address in New
York, the Vendors' Guarantor irrevocably agrees to appoint a new process agent
acceptable to the Purchasers and to deliver to the Purchasers within 14 days a
copy of a written acceptance of appointment by its new process agent.
19.21.4 Nothing contained in this Agreement shall affect the right
to serve process in any other manner permitted by law or the right to bring
proceedings in any other jurisdiction for the purposes of the enforcement or
execution of any Judgment or other settlement in any other courts.
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19.22 CURRENCY
19.22.1 With respect to any sum due hereunder, or under the Tax
Deed of Covenant or under any other document to be entered into pursuant hereto
or thereto which is denominated in a currency other than British pounds
sterling, if it is necessary to convert such sum into British pounds sterling,
the parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which, in accordance with normal
banking procedures, the applicable party could purchase British pounds sterling,
with such sum denominated in such other currency, at the Hong Kong and Shanghai
Banking Corporation Limited in London, England, at the close of business on the
Business Day immediately preceding the day on which the conversion is to be
made, without regard to any premiums and costs of exchange payable in connection
with such purchase.
19.22.2 With respect of any sum due from any party to any other
party hereunder, or under the Tax Deed of Covenant or under any other document
to be entered into pursuant hereto or thereto which is denominated in British
pounds sterling, the obligation of the party which owes such sum shall,
notwithstanding any Judgment in a currency other than British pounds sterling,
only be discharged to the extent that on the Business Day next succeeding
receipt by such other party of any sum adjudged to be so due in such other
currency, such party may, in accordance with normal banking procedures, purchase
British pounds sterling with such other currency at the Hong Kong and Shanghai
Banking Corporation Limited in London, England or its successor. If the British
pounds sterling so purchased are less than the sum originally due to such party
in British pounds sterling, each of the parties against whom such Judgment is
rendered agrees, as a separate obligation and notwithstanding any such Judgment,
to indemnify the parties to whom such Judgment is granted against such loss.
19.22.3 If it is necessary to convert an amount (the ORIGINAL
AMOUNT) due hereunder, under the Tax Deed of Covenant or any other document to
be entered into pursuant hereto or thereto expressed in either Canadian Dollars
or U.S. Dollars (the ORIGINAL CURRENCY), the amount expressed in the other
currency shall be the sum which would be required to buy the Original Amount of
the Original Currency using the noon spot rate exchange for New York City
interbank transactions applied in converting the other currency into the
Original Currency published by The Wall Street Journal (Eastern Edition) for
such date.
19.23 CERTAIN RESTRICTIVE COVENANTS
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19.23.1 The covenants set forth in this Section 19.23 (the
RESTRICTIVE COVENANTS) are a material part of this Agreement and are an integral
part of the obligations of the Vendors hereunder, such Restrictive Covenants are
supported by good and adequate consideration, and such Restrictive Covenants are
reasonable and necessary to protect the legitimate business interests of the
Purchasers.
19.23.2 During the period beginning on the Closing Date and ending
on the third anniversary of the Closing Date, except with the Purchasers' prior
written consent, the Vendors shall not, directly or indirectly, in any capacity,
in the United States or Canada:
(a) carry on or otherwise engage or have an interest in any
capacity (whether for profit or otherwise) in, any business which competes with
any of the Operations as operated on the Closing Date anywhere in the world
where the Operations are conducted on the Closing Date;
(b) in relation to the Operations, solicit, seek to obtain or
accept orders from or otherwise do business with or solicit directly or
indirectly any other person to obtain orders from or do business with any person
or firm who or which (i) was a customer, supplier or agent of the Vendors in
relation to the Operations at any time during the two years prior to Closing, or
(ii) at the date of Closing was negotiating to do business with the Vendors in
relation to the Operations, or otherwise interfere or seek to interfere with the
supply of goods or services to or by the Operations, provided that this Section
19.23.2 shall not prohibit the Vendors from doing business with any person who
is or was a customer, supplier or agent of the Vendors prior to Closing in
relation to any business of the members of the Vendors' Group which is not being
transferred under this Agreement; or
(c) solicit, with a view to employment, directly or
indirectly, any Senior Employee who is a Continuing Employee (PROHIBITED
EMPLOYEES) (provided that nothing in this Section 19.23.2(c) shall prevent any
member of the Vendors' Group from making generalized employment searches, by
advertisement or by engaging firms to conduct searches which are not focused on
Prohibited Employees).
19.23.3 The restrictions in clause 19.23.2 shall not operate to
prohibit:
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(a) the Vendors from holding in aggregate up to 10% of the
capital stock of any person if any class of capital stock of such person is
listed on a national market quotation system or recognized stock exchange; or
(b) the Vendors from carrying on any business not sold to the
Purchasers pursuant to the terms of this Agreement, in particular the business
presently carried on under the name "BICC Brand ▇▇▇" with manufacturing
facilities outside the United States, Canada and Mexico to be renamed "Brand
▇▇▇."
19.23.4 Each of the Vendors expressly acknowledges that it would
be extremely difficult to measure the damages that might result from any breach
of the Restrictive Covenants, and that any breach of the Restrictive Covenants
will result in irreparable injury to the Purchasers for which money damages
could not adequately compensate. If a breach of the Restrictive Covenants
occurs, then the Purchasers shall be entitled, in addition to all other rights
and remedies that they may have at law or in equity, to have an injunction
issued by a court of competent jurisdiction enjoining and restraining the
Vendors and all other persons involved therein from continuing such breach. The
existence of any claim or cause of action that either of the Vendors or any such
other person may have against any member of the Purchasers' Group shall not
constitute a defense or bar to the enforcement of any of the Restrictive
Covenants.
19.23.5 If any Restrictive Covenant, or any part thereof, or the
application thereof, is construed to be invalid, illegal or unenforceable, then
each other Restrictive Covenant, or the other portions of any such Restrictive
Covenant, or the application thereof, shall be affected thereby and shall be
enforceable without regard thereto. If any of the Restrictive Covenants is
determined to be unenforceable because of its scope, duration, geographical area
or other factor, then the court making such determination shall have the power
to reduce or limit such scope, duration, area or other factor, and such
Restrictive Covenant shall then be enforceable in its reduced or limited form.
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19.24 RELIANCE BY PURCHASERS; DISCLOSURE OF REPRESENTATION AND
WARRANTIES
Notwithstanding the right of Purchasers to investigate
the business, Acquired Assets and financial condition of the Vendors and the
Operations, and notwithstanding any knowledge obtained or obtainable by
Purchasers as a result of such investigation (including pursuant to Section
7.3.1(ii) or 7.3.2), Purchasers have the unqualified right to rely upon, and
have relied upon, each of the Warranties, and Purchasers' right to
indemnification based on the Warranties will not be affected by any
investigation conducted with respect to, or any knowledge acquired (or capable
of being acquired) whether before or after the execution and delivery of this
Agreement, with respect to the accuracy or inaccuracy of any such Warranty.
19.25 SECTION HEADINGS
Section and subsection headings in this Agreement are for
convenience of reference only, do not constitute a part of this Agreement, and
shall not affect its interpretation.
19.26 REFERENCES
All words used in this Agreement shall be construed to be of
such number and gender as the context requires or permits.
19.27 COOPERATION
The parties hereto agree to cooperate fully with each other
and to execute and deliver such further documents, certificates, agreements and
instruments and to take such other actions as may be reasonably requested to
evidence or reflect the transactions contemplated by this Agreement and to carry
out the intent and purposes of this Agreement.
19.28 BULK SALES
Purchasers hereby waive compliance by the Vendors with Bulk
Sales Laws with respect to the transactions contemplated hereby and in
connection herewith.
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IN WITNESS WHEREOF this Agreement has been duly executed as of the date
first above written.
BICC CABLES CORPORATION
By /s/ H.P. Berndorff
------------------------------
Name: H.P. Berndorff
-----------------------------
Title: Vice President
----------------------------
PYROTENAX USA INC.
By /s/ H.P. Berndorff
------------------------------
Name: H.P. Berndorff
-----------------------------
Title: Vice President
----------------------------
BICC CABLES CANADA INC.
By /s/ H.P. Berndorff
--------------------------------
Name: H.P. Berndorff
-----------------------------
Title: Secretary - Treasurer
----------------------------
BICC PLC
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Title: Director
----------------------------
GK TECHNOLOGIES,
INCORPORATED, in its capacity as US
Purchaser and Canadian Purchaser
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Title: Executive Vice President
----------------------------
GENERAL CABLE CORPORATION
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Title: Executive Vice President
----------------------------
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SCHEDULE 1
OPERATIONS
The Operations shall include, without limitation, the
following operations:
1. VENDOR OWNED REAL PROPERTIES
----------------------------
1 MARSHALL, TX SITE
Design, manufacture and distribution of utility cables,
Technology research and development
2 MALVERN, AK SITE
Design, manufacture and distribution of utility cables
3 DUQUION, IL SITE
Design, manufacture and distribution of utility cables
4 WILLIMANTIC, CT SITE
Design, manufacture, marketing and distribution of cable and
accessories. The site also includes executive offices and
operations for the Brand-▇▇▇ product lines
▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ SITE Design and manufacture of bare cables
6 JACKSON, TN SITE
Design, manufacture, distribution and assembly of Brand-▇▇▇ cable
and accessories
7 MARION, IN SITE
Design, manufacture and distribution of Brand-▇▇▇ cables and
accessories
▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ SITE
Design, manufacture and distribution of utility cables and
aluminum strip
▇ ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ SITE
Design, manufacture and distribution of utility cables
▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ SITE
Design, manufacture and distribution of utility cables
11 TRENTON, ONTARIO SITE
Design, manufacture, distribution and marketing of mineral
insulated electrical cable and electronic controllers. The site is
also used for research and development, includes customer service
area, executive offices and operations management for
BICC-Pyrotenex.
2. LEASED PROPERTIES
-----------------
12 INDIANAPOLIS, IN SITE
Technology research and development center
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13 INDIANAPOLIS, IN SITE
Manufacture of Polymenic compounds for cable insulation
14 WEST NYACK, NY SITE
Headquarters for the North American Business
Headquarters for the utility cable business
15 CALGARY, ALBERTA SITE Sales offices for BICC Cables Canada Inc.
▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ SITE Sales offices for BICC Cables Canada Inc.
17 TORONTO, ONTARIO SITE
Headquarters for BICC Cables Canada Inc.
Sales offices for the certificate insurers and for ▇▇▇▇-▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ SITE
Light assembly of mineral insulated cable units and electronic
controllers
19 HOUSTON, TEXAS SITE
Light assembly and distribution center for mineral insulated
cables
20 SYRACUSE, NEW YORK SITE
Sales and administrative office for BICC-Pyrotenex products
manufactured in Canada and sold in the US.
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SCHEDULE 2
[INTENTIONALLY LEFT BLANK]
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SCHEDULE 3
ALLOCATION OF PURCHASE PRICE
The Purchase Price shall be allocated between the US Business and the Canadian
Business as follows:
(1) (2) (3) (4)
NAME OF VENDOR JURISDICTION PARTICULARS OF ALLOCATION
CANADIAN/US BUSINESS
3.1 US Vendor US Sale of assets (pound)96 million
3.2 Canadian Vendor Canada Sale of assets (pound)8.4 million
The allocation of the Purchase Price among each of the Acquired Assets
shall be agreed between the Relevant Vendor and the Relevant Purchaser by
reference to the Acquired Assets respective values, as provided in Section
3.1(b) of the Agreement.
Adjustments to the Purchase Price (pursuant to Section 9 or otherwise)
shall be allocated as determined by the US Purchaser on behalf of itself and the
Canadian Purchaser in their reasonable discretion.
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SCHEDULE 4
CERTAIN THIRD PARTY CONSENTS
- Agreement dated September 1997 between Ace and the Canadian Vendor
concerning rights of first refusal.
- Agreement dated February 5, 1999 with Houston Wire & Cable.
- Nondisclosure Agreement with BrandRex and GEC (undated).
- Product Supply Agreement with Air Products dated January , 1994 for
requirements.
- Supply Agreement dated July 1, 1994 with Bekaert for ACSR products.
- Agreement dated April 1, 1997 with BICC Cables for PUC products.
- All Sumitomo confidentially and development Agreements (undated).
- Customer Agreement between BICC Cables Corporation and IBM Corporation,
effective from January 1, 1998 to December 31, 2000
- All agreements (including license and service agreements) relating to
software, hardware or systems which support the Operations, other than
agreements relating to software which is generally commercially
available.
- Unless otherwise repaid or defeased by the US Vendor, consent of the
Trustee and Bondholders in connection with the $9 million Industrial
Development Revenue Bond among the Industrial Development Board of the
City of Jackson, Tennessee, BICC Cables Corporation, First America
National Bank and Chemical Securities Inc. (relating to the Lease dated
May 1, 1991) with respect to: (a) the assignment of the obligations
under the bonds to the US Purchaser, and (b) the assignment of the
obligations under the Guaranty from the Vendors' Guarantor to the
Purchasers' Guarantor, and (c) the release of the US Vendor and the
Vendors' Guarantor of any of their respective obligations thereunder.
- Consent of General Electric Capital Corporation to assignment to US
Purchaser of Master Lease Agreement (as it may be extended or renewed)
between General Electric Capital Corporation and BICC Cables
Corporation, dated as of July 2, 1991, unless the parties otherwise
agree prior to Closing that US Vendor will purchase the equipment
subject to such Master Lease Agreement.
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SCHEDULE 5
WARRANTIES NOT UPDATED TO CLOSING
Section
-------
4.2.2(b)
4.2.2(c)
5.3.1
5.3.2(ii)
5.3.4
6.1.1
6.1.2
6.5.4
8.4.2(b)
8.4.3
8.4.5(a)
8.4.5(b)(iii)
9.4
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SCHEDULE 6
PART 1
CLOSING EVENTS
1 On the Closing Date the Vendors shall deliver to the US Purchaser or the
Canadian Purchaser, as the case may be, the following:
1.1 DOCUMENTS OF TRANSFER. Such absolute bills of sale, assignments, special
warranty deeds, endorsements, affidavits (including, without limitation,
Internal Revenue Code Section 1445 (FIRPTA) and title affidavits), and
other instruments and documents of sale, transfer, assignment and
conveyance as Purchasers may reasonably require, in order to lawfully,
effectively and properly sell, transfer, assign, purchase and convey to
Purchasers good right, title and interest in and to all of the Acquired
Assets, as required herein, in each case substantially in the form
attached hereto on Part 3 of this Schedule or Schedule 15, as the case
may be, with respect to personal property and Intangible Property and in
such other form reasonably acceptable to the Vendors and Purchasers with
respect to all other property, dated as of the Closing Date, and duly
executed and, if necessary, acknowledged by the US Vendor or the Canadian
Vendor, as applicable;
1.2 Physical Delivery. Those Acquired Assets which are capable of transfer by
delivery;
1.3 BOOKS AND RECORDS. All books, records and other information relating to
the Operations or Continuing Employees of the Operations and all
information relating to customers, suppliers, agents and distributors;
1.4 RESOLUTIONS. Copies of the resolutions duly adopted by the Board of
Directors or shareholders of each of the Vendors, authorizing the
respective entity to enter into and perform its obligations under this
Agreement and any other agreements contemplated hereby, certified by
proper officers of the respective entity as in full force and effect on
and as of the Closing Date;
1.5 TAX DEED OF COVENANT. The Tax Deed of Covenant duly executed by the
Covenantors named therein, in substantially the form attached hereto on
Part 4 of this Schedule;
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1.6 GOOD STANDING CERTIFICATES. Good standing certificates for US Vendor and
Canadian Vendor from their jurisdictions of incorporation and each
jurisdiction where they are required to qualify to do business as a
foreign corporation, dated no earlier than 15 days before the Closing
Date;
1.7 THIRD PARTY CONSENTS. The original signed copies of all Third Party
Consents that have been obtained prior to the Closing;
1.8 INCUMBENCY CERTIFICATES. Certificates of the Secretaries of each Vendor
as to the incumbency and signatures of their respective officers
executing this Agreement or any agreements contemplated hereby;
1.9 OTHER DOCUMENTS. All other agreements, certificates, instruments and
documents reasonably requested by the Purchasers in order to fully
consummate the transactions contemplated by this Agreement and carry out
the purposes and intent of this Agreement.
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SCHEDULE 6
PART 2
VENDOR'S ACCOUNTING PERIODS
Set out below are the dates of the last Business Day of the Vendor's relevant
accounting periods (which end on Saturdays by convention) for the first four
periods following the signing of this Agreement:
April 3, 1999
May 1, 1999
May 29, 1999
July 3, 1999
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SCHEDULE 6
PART 3
FORM OF ▇▇▇▇ OF SALE
▇▇▇▇ OF SALE
------------
REFERENCE IS MADE to that certain Assets Sale and Purchase Agreement, dated
April 6, 1999 (the PURCHASE AGREEMENT), among BICC Cables Corporation, Pyrotenax
USA Inc. (together with BICC Cables Corporation, the US VENDOR), BICC Cables
Canada Inc. (the "CANADIAN VENDOR"), BICC plc (the VENDORS' GUARANTOR), GK
Technologies, Incorporated (referred to as both the US PURCHASER and the
CANADIAN PURCHASER and General Cable Corporation (the PURCHASERS' GUARANTOR).
Unless otherwise defined, capitalized terms used herein have the meanings
provided in the Purchase Agreement.
KNOW THAT the undersigned, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, intending to be legally bound
hereby, does hereby sell, assign, transfer, bargain, convey and deliver, subject
to and in accordance with the Purchase Agreement, the [US] [Canadian] Assets,
together with the [US] [Canadian] Assumed Liabilities to the [US] [Canadian]
Purchaser, to have and hold such [US] [Canadian] Assets unto such Purchaser, its
successors and assigns, to and for its proper use and benefit from this date and
forever thereafter.
Notwithstanding the foregoing, the undersigned reserves and does not sell or
transfer to the [US] [Canadian] Purchaser any right, title or interest in or to
any of the Excluded Assets or any of the Excluded Liabilities.
Pursuant to the Purchase Agreement, the undersigned shall, at any time and from
time to time, at the reasonable written request of the [US] [Canadian]
Purchaser, execute and deliver such Purchaser all other and further instruments
as are reasonably necessary to effectuate the transfers contemplated pursuant to
the Purchase Agreement.
WITNESS the due execution and delivery of this ▇▇▇▇ of Sale on this ___ day of
_____________________, 1999.
BICC CABLES CORPORATION
By:
--------------------------
Name:
Title:
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SCHEDULE 6
PART 4
FORM OF TAX DEED OF COVENANT
THIS TAX DEED OF COVENANT (the DEED) is made on ___________, 1999 BETWEEN:
(1) BICC CABLES CORPORATION, a company incorporated in Delaware, the United
States, whose principal place of business is at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇;
(1a) PYROTENAX USA INC. (together with BICC Cables Corporation, the
US VENDOR), a company incorporated in Delaware, the United
States;
(2) BICC CABLES CANADA INC. (the CANADIAN VENDOR), a company incorporated
under the laws of Canada, whose principal place of business is at ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ 155;
(3) BICC PLC (the VENDORS' GUARANTOR:), a company incorporated in England and
Wales, whose registered office is at ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇ ▇▇▇;
(4) GK TECHNOLOGIES, INCORPORATED (the US PURCHASER), a company incorporated
in New Jersey, the United States, whose principal place of business is at
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇;
(5) GK TECHNOLOGIES, INCORPORATED (the CANADIAN PURCHASER), a company
incorporated in New Jersey, the United States, whose principal place of
business is at ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇; and
(6) GENERAL CABLE CORPORATION (the PURCHASERS' GUARANTOR), a company
incorporated in Delaware, the United States, whose principal place of
business is at ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
WHEREAS this Deed is entered into pursuant to the provisions of an
Agreement dated _______________, 1999 and made by and between the parties set
forth above (the AGREEMENT).
IT IS AGREED as follows:
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1. INTERPRETATION
In this Deed , including Exhibit A attached hereto, the headings shall
not affect its interpretation and:
1.1 words and expressions defined in the Agreement shall have the same
meaning wherever used in this Deed and the provisions of Sections 1.2 and
1.5 of the Agreement shall be deemed to be incorporated in this Deed;
1.2 the following expressions bear the following meanings namely:
"CLAIM" includes any liability to make a payment of Taxes and any notice,
demand, assessment, letter or other document issued by or for any Governmental
Authority indicating that any Purchaser is or may be placed or sought to be
placed under a liability to make a payment of Taxes;
"LIEN" means any mortgage, lien, charge, restriction, pledge, security
interest, option, easement, encroachment or encumbrance;
"TRANSACTION" includes any transaction, circumstance, act or event of
whatever nature;
1.3 references to "PROFITS" include income, profits or gains (including capital
gains) and references to profits earned, accrued or received include
profits deemed to have been or treated as earned, accrued or received for
Tax purposes.
2. REPRESENTATIONS OF US VENDOR
2.1 Subject as hereinafter provided or disclosed on Exhibit A attached hereto,
the US Vendor hereby represents to the US Purchaser that:
(a) There are no Tax Liens (other than Liens for current Taxes not
yet due and payable) upon the Acquired Assets. All Taxes which
US Vendor is required by Law to withhold or collect, including
sales and use Taxes, and amounts required to be withheld for
Taxes of employees and other withholding Taxes, have been duly
withheld or collected and, to the extent required, have been
paid over to the proper Governmental Authorities or are held in
separate bank accounts for such purpose.
(b) The US Vendor is not a "foreign person" as defined in Section
1445(f)(3) of the Code.
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(c) The US Vendor has filed all material Tax Returns that it was
required to file. All such Tax Returns were correct and complete
in all material respects. All material Taxes currently owed by
the US Vendor (whether or not shown on any Tax Return have been
paid or provision for which has been made. The US Vendor has
never received notice by a Taxing authority in a jurisdiction
for which no material Tax Return has been filed that it is or
may be subject to Tax by or in that jurisdiction.
(d) There is no material dispute or claim concerning any Tax
liability of the US Vendor either (A) claimed or raised by any
Governmental Authority in writing or (B) as to which the US
Vendor has knowledge.
(e) The US Vendor has not waived any statute of limitations in
respect of Taxes nor agreed to any extension of time with
respect to a Tax liability or deficiency.
(f) The US Vendor has not made and is not obligated to make any
payment that will not be deductible under Section 280G of the
Code.
3. REPRESENTATIONS OF THE CANADIAN VENDOR
3.1 Subject as hereinafter provided or disclosed on Exhibit A attached hereto,
the Canadian Vendor represents to the Canadian Purchaser:
(a) The Canadian Vendor has duly and timely filed with the
appropriate Governmental Authority all Tax Returns required to
be filed by it and has duly completed and correctly reported all
income required to be reported thereon in all material respects;
(b) The Canadian Vendor has duly and timely paid all Taxes,
including all installments on account of Taxes for the current
year, that are due and payable by it.
(c) The Canadian Federal and provincial income and capital Tax
liabilities of the Canadian Vendor have been assessed by the
relevant Governmental Authority and notices of assessment or
notifications that no Tax is payable have been issued to it by
the relevant Governmental Authorities prior to 1997.
(d) There are no actions, suits, proceedings, investigations, audits
or claims now pending or, to the knowledge of the Canadian
Vendor or the Vendors' Guarantor, threatened
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against the Canadian Vendor in respect of any Taxes and there
are no matters under discussion, audit or appeal with any
Governmental Authority relating to Taxes.
(e) The Canadian Vendor has duly and timely withheld from any
amounts paid or credited by it to or for the account or benefit
of any Person, including, without limitation, any of its
employees, officers and directors and any non-resident Person,
the amount of all Taxes and other deductions required by
applicable Law to be withheld from any such amount, and has duly
and timely remitted the same to the appropriate Governmental
Authority.
(f) The Canadian Vendor is duly registered under subdivision (d) of
Division V of Part IX of the Excise Tax Act (Canada) with
respect to the goods and services Tax and harmonized sales Tax
and under Division I of Chapter VIII of Title I of the Quebec
Sales Tax Act with respect to the Quebec sales Tax, and its
registration numbers are 87399 2842RT and 10188220737,
respectively.
(g) The Canadian Vendor has not filed any elections, designations or
similar filings for purposes of the Income Tax Act (Canada) or
any relevant provincial Tax statute that would affect any of the
Canadian Assets.
(h) The Canadian Vendor is not a non-resident of Canada for purposes
of the Income Tax Act (Canada).
4. COOPERATION.
4.1 Each of the Vendors shall make available to the Relevant Purchaser, such
records as such Relevant Purchaser may reasonably require for the
preparation of any Tax Returns or other similar reports or forms required
to be filed by such Relevant Purchaser and such records as the Relevant
Purchaser may require for the defense of any audit, examination,
administrative appeal or litigation of any such Tax Return or any other
report or form.
4.2 Each of the Relevant Purchasers shall make available to the Vendors, such
records as such Vendor may reasonably require for the preparation of any
Tax Returns or other similar reports or forms required to be filed by such
Vendor and such records as the Vendor may require for the defense of any
audit, examination, administrative appeal or litigation of any such Tax
Return or any other report or form.
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5. BULK SALES. The Relevant Vendor shall use reasonable commercial efforts to
comply with the Laws of any jurisdiction relating to the bulk sale or
transfer of assets for Tax purposes that may be applicable to the transfer
of the U.S. Assets or the Canadian Assets, as the case may be, as soon as
practicable after the date hereof, and the Relevant Vendor shall indemnify
the Relevant Purchaser from any Losses to such Relevant Purchaser resulting
from any noncompliance in accordance with Section 7 of this Deed.
6. CANADIAN ELECTIONS.
6.1 GST ELECTION. The Canadian Vendor and the Relevant Purchaser shall jointly
elect under subsection 167(l) of Part IX of the Excise Tax Act (Canada) and
any provincial legislation imposing a similar value added or multi-staged
Tax, that no Tax be payable with respect to the sale and purchase of the
Canadian Assets pursuant to this Agreement. The Canadian Vendor and the
Canadian Purchaser shall make such election in the prescribed form
containing prescribed information pursuant such Laws and the Canadian
Purchaser shall file the joint election in compliance with the requirements
of the Excise Tax Act (Canada) and any provincial legislation imposing a
similar value added or multi-staged Tax.
6.2 ELECTION. The Canadian Vendor and the Canadian Purchaser shall jointly
elect in prescribed form to have section 22 of the Income Tax Act (Canada)
apply to the sale of the Accounts Receivable by the Canadian Vendor to the
Canadian Purchaser.
7. INDEMNIFICATION.
7.1 BREACHES OF REPRESENTATIONS AND COVENANTS. Subject to the provisions set
forth in Section 9, the US Vendor and the Canadian Vendor (as is applicable
"COVENANTOR") agree to indemnify the US Purchaser and the Canadian
Purchaser, respectively, against, and agree to hold harmless from, any and
all Losses incurred or suffered by them arising out of or in connection
with any of the following:
(a) any breach of or any inaccuracy in any representation or warranty made
by the relevant Covenantor in this Tax Deed of Covenant set forth in
Sections 2, 3, 4 and 5; or
(b) any breach of or failure by the relevant Covenantor to perform any of
its covenants or obligations set forth in this Tax Deed of Covenant.
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7.2 EXCLUSIONS FROM INDEMNIFICATION. For the avoidance of doubt, this Section 7
shall not cover any Tax liability by reference to any profits earned,
accrued or received after Closing or in respect of or arising from any
Transaction effected or deemed to have been effected after Closing (except
to the extent that such item is properly accounted for in Tax periods
ending on or prior to Closing).
8. PRORATION OF REAL ESTATE TAXES. All real estate, personal property and ad
valorem Taxes relating to the US Assets and the Canadian Assets which shall
have accrued and become payable prior to Closing shall be paid by the US
Vendor and the Canadian Vendor, respectively. All such Taxes which shall be
accrued but unpaid shall be prorated to Closing; provided, however, that
the parties hereby agree to promptly make appropriate payments which are
required to adjust the prorations to reflect the actual amount of such
Taxes payable when such amount is determined by the appropriate
Governmental Authority. In connection with the proration of Taxes, in the
event that actual Tax figures are not available at Closing, proration of
Taxes shall be based upon 105% of the actual Taxes for the preceding year
for which actual Tax figures are available. The amount due one party as the
result of such proration shall be paid to the other party at Closing.
9. EXCLUSIONS
9.1 Neither the US Vendor nor the Canadian Vendor shall be liable under Section
7 above, respectively:
(a) in respect of any Tax liability to the extent that adequate
provision or reserve for such Tax liability was made in the Net
Asset Statement or to the extent that such Tax liability was
discharged prior to Closing; or
(b) to the extent that such Tax liability arises or is increased as
a consequence of any change in the accounting policy or practice
adopted by the Relevant Purchaser after Closing (except with
respect to any change made to correct any erroneous or improper
historic Tax accounting policies or practices, if any, of the
Relevant Vendor); or
(c) to the extent that the liability would not have arisen but for
or is increased by a Transaction effected by the Covenantor
prior to Closing at the request or with the approval of the
Relevant Purchaser; or
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(d) to the extent that recovery has been made in respect of the same
subject matter under the Agreement and any payment made by (or
procured by) the Covenantor under this Deed shall reduce by that
amount any claim in respect of the same subject matter by the
Relevant Purchaser under the Agreement.
9.2 The provisions of Section 2.3 of the Agreement shall have effect as if
expressly incorporated in this Deed and in the case of conflict between
the provisions of the Agreement and this Deed, this Deed shall prevail.
10. CLAIMS
10.1 If the Relevant Purchaser becomes aware after Closing of any Claim which
could give rise to a liability of a Covenantor under this Deed, the
Relevant Purchaser shall procure that notice thereof is given as soon as
reasonably practicable to the Covenantor in the manner hereinafter
provided. As regards any such Claim, the Covenantor shall be entitled at
its own expense in its absolute discretion to take such action as it
shall deem necessary to avoid, dispute, deny, defend, resist, appeal,
compromise or contest such Claim and any adjudication in respect thereof
in the name of and on behalf of the Relevant Purchaser concerned, or to
require the Relevant Purchaser concerned to take any such action.
Notwithstanding the foregoing, however, the Covenantor shall allow the
Relevant Purchaser reasonable opportunity to participate in any such
proceedings, negotiations or appeal. The Covenantor shall also have the
right at its own expense in its absolute discretion to conduct or direct
the conduct of any related proceedings, negotiations or appeals.
10.2 The Relevant Purchaser will not, without the written consent of the
Covenantor, compromise or settle any Claim or agree any matter which may
affect the outcome of any dispute or negotiation with any Tax authority
in relation to a Claim which may result in a liability under this Deed.
10.3 The Relevant Purchaser will give all such information and assistance as
the Covenantor or its professional advisers reasonably request, including
access to premises and personnel, and the right to examine and copy any
accounts, documents and records, for the purpose of Section 10.1 above,
limited in scope to the subject matter of the Claim. The Covenantor
agrees to keep all such information confidential and only to use it for
such purpose.
11. DUE DATE FOR PAYMENT
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11.1 The due date for payment under this Section 11 shall be as follows:
(a) where a liability of the Covenantor under Section 7 arises from
a liability of a Relevant Purchaser to make a payment of Taxes
which has not at the date of the notice under Section 10.1 been
made, no later than the date which falls ten (10) days prior to
the latest date on which such Tax liability becomes payable to
the relevant Governmental Authority in order to avoid a
liability to interest or penalties accruing (and if such date
falls on a Saturday or Sunday, the next Business Day).
(b) in any other case, ten (10) days after service by the Relevant
Purchaser of a notice containing a written demand in respect of
the matter for which the Covenantor is liable.
11.2 The provisions of Section 19.10 of the Agreement are expressly
incorporated herein by reference.
12. RELEVANT PURCHASER'S INDEMNITY
12.1 The Relevant Purchaser hereby covenants with the Covenantor to pay to the
Covenantor an amount equal to any Tax liability for which the Covenantor
becomes liable in consequence of the failure by the Relevant Purchaser to
discharge any Tax liability within a specified period or otherwise where
such Tax liability arises in circumstances such that the Relevant
Purchaser would not have been entitled to make a claim against the
Covenantor under Section 7 of this Deed in respect of any Tax liability
which has been the subject of a Claim by the Relevant Purchaser under
this Deed which has been satisfied.
12.2 Any amount paid by the Relevant Purchaser to the Covenantor pursuant to
this Section 12 shall be paid by way of adjustment to the Purchase Price
under the terms of the Agreement.
13. RECOVERY FROM THIRD PARTIES
If the Covenantor has paid an amount in respect of any Tax liability under
Section 11 hereof and the Relevant Purchaser is entitled at the due date
for the making of that payment to recover from some other person any sum in
respect of the Tax liability which has resulted in that payment becoming
due from the Covenantor, or at some subsequent date becomes entitled to
make such a recovery, then the Relevant Purchaser shall as soon as
reasonably practicable notify the Covenantor of such entitlement and shall,
if so requested by the Covenantor and
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subject to the Relevant Purchaser being indemnified to its reasonable
satisfaction by the Covenantor against all losses (including additional Tax
liabilities), costs, damages and expenses which may thereby be incurred,
take all reasonable steps to enforce that recovery (keeping the Covenantor
informed of the progress of any action taken) and shall account to the
Covenantor for the whole of any unrestricted sum so recovered (including
any interest or repayment supplement paid to the Relevant Purchaser on or
in respect thereof) less any costs and expenses of recovery up to an amount
not exceeding the amount of any such payment previously made by the
Covenantor in respect of the Tax liability which resulted in payment by the
Covenantor pursuant to Section 10.
14. SAVINGS AND OVER-PROVISIONS. The provisions of Section 2.3.7 of the
Agreement are expressly incorporated herein by reference.
15. WITHHOLDINGS AND DEDUCTIONS
15.1 All sums payable by the Covenantor to the Relevant Purchaser under this
Deed shall be paid free and clear of all deductions, withholdings,
set-offs or counterclaims whatsoever except as may be required by law.
15.2 If any deduction or withholding is made from any payment as contemplated
in Section 15.1, the Covenantor shall supply to the Relevant Purchaser
such official receipt, if any, or other evidence of payment to the
relevant authority of the amount deducted or withheld and shall give all
reasonable assistance to enable the Relevant Purchaser to receive a
credit or refund or similar benefit by reason of the deduction or
withholding as promptly as possible.
16. MISCELLANEOUS
The provisions of Section 19 (Other Provisions) of the Agreement shall
apply mutatis mutandis to this Deed, replacing references to the Vendor by
references to the Covenantor and references to the Agreement by references
to this Deed and making any other necessary modifications.
17. ILLEGALITY
If at any time any provision hereof is or becomes illegal, invalid or
unenforceable in any respect under the law of any jurisdiction, neither the
legality, validity or enforceability of such provision under the law of any
other jurisdiction shall in any way be affected or impaired thereby.
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IN WITNESS WHEREOF this document has been duly executed as of the day and
year first above written.
BICC CABLES
By:
--------------------------------
Name:
-------------------------------
Title:
------------------------------
BICC CABLES CANADA INC.
By:
--------------------------------
Name:
-------------------------------
Title:
------------------------------
PYROTENAX USA INC.
By:
--------------------------------
Name:
-------------------------------
Title:
------------------------------
GK TECHNOLOGIES, INCORPORATED,
IN ITS CAPACITY AS US PURCHASER AND
CANADIAN PURCHASER
By:
--------------------------------
Name:
-------------------------------
Title:
------------------------------
GENERAL CABLE CORPORATION
By:
--------------------------------
Name:
-------------------------------
Title:
------------------------------
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EXHIBIT A TO BICC /
GENERAL CABLE TAX
DEED OF COVENANT
PART 1: REPRESENTATIONS OF US VENDOR.
-------------------------------------
DISCLOSURES FOR BICC CABLES CORPORATION
EXTENSIONS
----------
TAX YEAR TYPE EXTENDED DATE
-------- ---- -------------
12/31/94 Federal Income Tax 12/31/99
12/31/93 Federal Income Tax 12/31/99
12/31/94 Federal Employment Tax 12/31/99
12/31/95 Federal Employment Tax 12/31/99
To be provided Illinois Sales and Use Tax To be provided
▇▇▇▇-▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Income Tax 1/31/00
AUDITS
Federal IRS Income Tax Completed through 12/31/95
Federal Employment Tax Years 1994-1997 Open
Connecticut Sales and Use Tax through 7/97 Protest filed 1/99
Illinois Sales and Use Tax in Process Open
New York State Income Tax - Start date 4/6/99 Open (Years 1993-95)
TAX LIENS
---------
New York State Employment Tax Lien removed
STATES WITH INVENTORY AND PLANTS
--------------------------------
Connecticut Plant and Inventory
NYS Headquarters - inventory (Pyro US)
Massachusetts Plant and Inventory
Tennessee Plant and Inventory
Texas Plant and Inventory
Illinois Plant and Inventory
Indiana Plant and Inventory
Arkansas Plant and Inventory
TAX SHARING AGREEMENT WITH OTHER BICC, PLC COMPANIES IN US.
BICC CABLES CORPORATION FILES A CONSOLIDATED RETURN WITH OTHER
BICC, PLC COMPANIES IN THE US.
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PROPERTY TAX
------------
Only issue is for Texas plant for consigned inventory of ▇▇▇▇▇▇▇▇ metals. Taxing
authority will allow rendition to include ▇▇▇▇▇▇▇▇ consigned inventory. Claim in
process for 1998 filing.
NON-FILING
----------
BICC Cables Corporation has registered in Michigan. We do not believe we have
nexus in the state and therefore, have not filed returns. The state has not
contacted us with regard to filing.
IRS AUDIT ISSUES
There are no carryover issues that will effect the assets purchased. Transfer
pricing between the US - Canada and the US - UK was reviewed with no adjustments
proposed.
Employment Tax issues relate to employee loans which will be resolved with the
sale of the business.
PART 2: REPRESENTATIONS OF CANADIAN VENDOR.
-------------------------------------------
Appeal of British Columbia Social Service Tax Assessment dated September 10,
1998. The assessed amount of Tax has been paid.
Notice of Assessment from the Commencement of Quebec dated May 8, 1998 for 1996
payroll Taxes which is under discussion. The assessed amount of Tax has been
paid.
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SCHEDULE 7
NET ASSET STATEMENT
1. The Net Asset Statement shall be prepared in accordance with UK GAAP
prevalent as of December 31, 1998, excluding the impact of FRS 11 and on a basis
consistent with the Combined Accounts and shall be drawn up in accordance with
the provisions of Sections 2 and 3 below and, to the extent not inconsistent
therewith:
1.1 the accounting policies for the Operations as attached to the
Combined Accounts and included in the Disclosure Letter; and to the extent not
inconsistent therewith;
1.2 the accounting policies and principles applied in the preparation
of the audited accounts relating to the BICC Group for the period ended December
31, 1998, excluding the impact of FRS 11, and otherwise;
1.3 in accordance with the accounting policies and principles generally
accepted in the United Kingdom, excluding the impact of FRS 11 as in effect on
December 31, 1998.
2. No account shall be taken of events taking place after Closing and regard
shall only be had to information available to the parties to this Agreement at
Closing.
3. The Net Asset Statement shall be expressed in pounds sterling. Amounts in
other currencies shall be translated into sterling at the exchange rates
specified in the Exchange Cross Rates Table published in the Financial Times,
London Edition, on the Closing Date.
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SCHEDULE 8
REPRESENTATIONS AND WARRANTIES GIVEN BY THE VENDORS UNDER SECTION 7.1
Knowing that Purchasers rely thereon, the Vendors jointly and severally
represent and warrant to the Purchasers as follows:
1. AUTHORITY AND CAPACITY
1.1 Each Vendor and the Vendors' Guarantor is a company duly
incorporated and validly existing under the laws of its jurisdiction of
incorporation. Each Vendor is duly qualified and registered to do business in
each jurisdiction where such qualification or registration is required by
applicable law except where the failure to be so qualified would not have a
material adverse effect on the Operations or the financial condition or results
of operations thereof. Except as set forth on the Disclosure Letter, neither
Vendor has any Subsidiaries nor owns any securities of any corporation or any
other interest in any person. Neither Vendor has agreed or is obligated to make,
or is bound by any Contract under which it may become obligated to make, any
future equity or similar investment in or capital contribution to any other
person.
1.2 Subject to receipt of approval by Vendors' Guarantor's
shareholders, each Vendor and the Vendors' Guarantor has the legal right and
full power and authority to enter into and perform its obligations under this
Agreement and the Tax Deed of Covenant and any other documents to be executed by
such Vendor and the Vendors' Guarantor pursuant to or in connection with this
Agreement.
1.3 This Agreement and the Tax Deed of Covenant, and any other
agreements executed or to be executed in connection herewith or therewith, will
when duly executed, constitute legally valid and binding obligations of each of
the Vendors and the Vendors' Guarantor which are party thereto, enforceable
against each of the Vendors and the Vendors' Guarantor in accordance with their
respective terms, subject as to enforcement of remedies to applicable
bankruptcy, insolvency, reorganization and similar laws affecting generally the
enforcement of rights of contracting parties and to a court's discretionary
authority with respect to the granting of a decree ordering specific performance
or other equitable remedies.
1.4 The execution and delivery of, and the performance by the Vendors
of their obligations under, this Agreement and the Tax Deed of Covenant and any
other documents to be executed by the Vendors pursuant to or in connection with
this Agreement, and the execution and delivery of, and the performance by the
Vendors' Guarantor of its obligations under this Agreement and any other
documents to be executed by the Vendors' Guarantor, will not:
1.4.1 result in a violation of or default under of any
provision of the articles of incorporation, bylaws and/or other charter
documents of any Vendor or Vendors' Guarantor; or
1.4.2 result in a breach of any Judgment to which any Vendor
is a party or by which any Vendor is bound; or
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1.4.3 constitute a violation of any Law that is applicable to
either Vendor or their respective businesses or assets except where the
violation would not have a material adverse effect on the Operations or on the
financial condition or results of operations thereof or on the ability of the
parties to consummate the transactions contemplated by this Agreement; or
1.4.4 Subject to the need to obtain any Third Party Consent,
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under, any Contract or result in the imposition
of any Encumbrance upon any of the Acquired Assets, except where the violation,
conflict, breach, default, acceleration, termination, modification,
cancellation, failure to give notice, or Encumbrance would not have a material
adverse effect on the Operations or on the financial condition or results of
operations thereof, or on the ability of the parties to consummate the
transactions contemplated by this Agreement. Except in regards to the HSR Act or
as disclosed in the Disclosure Letter, the Vendors do not need to give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any Governmental Authority in order for the parties hereto to
consummate the transactions contemplated by this Agreement, except where such
authorization, consent or approval would not have a material adverse effect on
the Operations or on the financial condition or results of operations thereof or
on the ability of the parties hereto to consummate the transactions contemplated
by this Agreement.
1.5 Subject to receipt of approval by the shareholders of Vendors's
Guarantor all corporate action required to be taken by the Vendors and Vendors'
Guarantor validly and duly to authorize the execution and delivery of, and to
exercise their rights and perform their obligations under, this Agreement, the
Tax Deed of Covenant and any other documents to be executed by the Vendors or
Vendors' Guarantor at the Closing pursuant to or in connection with this
Agreement, have been duly taken or will have been duly taken before Closing.
2. DISCLOSURE LETTER AND DATA ROOM; FULL DISCLOSURE
2.1 To the knowledge of the Vendors, no representation or warranty made
by the Vendors in this Agreement or pursuant hereto (a) contains any untrue
statement of material fact; or (b) omits to state any material fact that is
necessary to make the statements made, in light of the circumstances under which
they are made, not false or misleading in any respect.
2.2 The Data Room has been collated by the Vendors in good faith.
3. ACCOUNTS AND RECORDS
3.1 COMBINED ACCOUNTS
The Combined Accounts:
(a) have been prepared on a basis consistent with the
accounting policies and principles set out in Section 1 (including Subsections
1.1, 1.2 and 1.3, but excluding Sections 2 and 3) of Schedule 7;
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(b) fairly present in all material respects the state
of affairs of the Operations as at the Balance Sheet Date for the financial year
ended on that date.
3.2 MANAGEMENT ACCOUNTS
The Management Accounts have been properly prepared in
accordance with the principles set out in Section 1 (including Subsections 1.1,
1.2 and 1.3, but excluding Sections 2 and 3) of Schedule 7.
3.3 ACCOUNTING AND OTHER RECORDS
The statutory books and books of account and other records of
whatsoever kind relating to the Operations are up-to-date and maintained in
accordance with all applicable legal requirements on a proper and consistent
basis and contain complete and accurate records of all matters required to be
dealt with in such books. All such books and records and all other documents
(including documents of title and copies of all subsisting agreements to which
either Vendor is a party) are in the possession (or under the control) of the
Canadian Vendor or the US Vendor, as applicable, and no notice or allegation
that any is incorrect or should be rectified has been received.
3.4 CHANGES SINCE BALANCE SHEET DATE
3.4.1 Since the Balance Sheet Date, the Operations have been
carried on in the ordinary course, without any interruption or alteration in
their nature, scope or manner and so as to maintain the same as a going concern.
3.4.2 Since the Balance Sheet Date, there has been no material
adverse change in the Operations or on the financial condition or results of
operations thereof.
3.4.3 Since the Balance Sheet Date, except in the ordinary
course of business, neither Vendor has created or assumed any Encumbrance upon
any of the Acquired Assets.
3.4.4 Except as set forth on the Disclosure Letter, since the
Balance Sheet Date and prior to the date of this Agreement, neither Vendor has
taken any action that would have required the consent of the Purchasers pursuant
to Section 5.2.1(b), (c), (d), (e) or (f) of the Agreement.
4. LEGAL MATTERS
No reference to any law or Licence (howsoever expressed) in Section 4.1
or 4.2 below shall be deemed to include a reference (directly or indirectly) to
any Environmental Laws (as defined in Schedule 16), and it is expressly
acknowledged that no representation or warranty is given by or on behalf of the
Vendors in this Agreement or otherwise in respect of any Environmental Laws
except as provided in Schedule 16.
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4.1 COMPLIANCE WITH LAWS
The Operations and the ownership, possession and use of the
assets of each Vendor currently comply with all applicable Laws except where
such non-compliance would not have a material adverse effect on the Operations
or on the financial condition or the results of operations thereof. Neither
Vendor is in violation of their respective articles of incorporation, by-laws or
other charter documents. Except as described in the Disclosure Letter, there is
no investigation or inquiry by any Governmental Authority, or Judgment
outstanding or to the knowledge of the Vendors, threatened against either
Vendor, or any person for whose acts or defaults they may be vicariously liable
which would have a material adverse effect upon the Operations or on the
financial condition or the result of operations thereof, nor has any notice or
other communication (official or otherwise) from any Governmental Authority been
issued with respect to an alleged actual or potential violation and/or failure
to comply with any such applicable Law, or requiring it/them to take or omit any
action which would have a material adverse effect on the Operations or on the
financial condition or the results of operations thereof and neither Vendor is
aware of any circumstances which are likely to give rise to any such
investigation or inquiry.
4.2 PERMITS AND CONSENTS
Nothing in this Section 4.2 applies to Permits of Intangible
Property rights (including Software) or environmental Licenses.
4.2.1 All material Third Party Consents which are necessary
for the transfer to a Relevant Purchaser of the Operations or any part thereof
or the entry into or completion of this Agreement are listed in the Disclosure
Letter and have been obtained (other than those still required, details of which
are set out in the Disclosure Letter).
4.2.2(a) All material Permits necessary for carrying on the
Operations as and where now carried on have been obtained, are in full force and
effect and have been and are being complied with in all material respects;
(b) neither Vendor is aware of any reason why any of
such Permits should be suspended, threatened or revoked;
(c) all such Permits which are material to the
Operations are listed on the Disclosure Letter, and true and correct copies of
all such material Permits have been made available to the Purchasers.
4.3 LITIGATION
4.3.1 Except as described in the Disclosure Letter, no breach
of contract, breach of warranty, tort, negligence, infringement, product
liability, discrimination, wrongful discharge or other claim of any nature has
been asserted or, to the knowledge of either Vendor, threatened by or against
either Vendor at any time since January 1, 1997 which if determined adversely to
the
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Vendors would have a material adverse effect on the Operations or the financial
condition or results of operations thereof.
4.3.2 Except as described in the Disclosure Letter, as at the
date hereof, neither Vendor (or any person for whose acts or defaults either
Vendor may be vicariously liable) is involved whether as plaintiff or defendant
or other party in any claim, legal action, proceeding, suit, litigation,
prosecution, investigation, inquiry or arbitration (other than as plaintiff in
the collection of debts arising in the ordinary course of business) which is
material to the Operations or the financial condition or results of operations
thereof and, so far as either Vendor is aware, no such claim, legal action,
proceeding, suit, litigation, prosecution, investigation, inquiry or arbitration
is pending or threatened by or against either Vendor (or any person for whose
acts or defaults either Vendor may be vicariously liable).
4.3.3 As at the date hereof, so far as the Vendors are aware,
there are no investigations, disciplinary proceedings or other circumstances
likely to lead to any such material claim or legal action, proceeding, suit,
litigation, prosecution, investigation, inquiry or arbitration described in
Section 4.3.2.
4.4 ENVIRONMENTAL LIABILITY
The only environmental Warranties relating to the Operations
are contained in Section 2 of Schedule 16.
4.5 INSOLVENCY
4.5.1 No order has been made, petition presented, resolution
passed or meeting convened for the winding up (or other process whereby the
business is terminated and the assets of the company concerned are distributed
amongst the creditors and/or shareholders or other contributories) of either
Vendor, and there are no cases or proceedings under any applicable insolvency,
reorganization or similar laws in any jurisdiction concerning either Vendor,
and, so far as the Vendors are aware, no events have occurred which, under
applicable laws, would justify any such cases or proceedings.
4.5.2 No petition has been presented or other proceedings have
been commenced by or against (i.e., voluntarily or involuntarily) either Vendor
for an administration order to be made (or any other order to be made by which,
during the period it is in force, the affairs, business and assets of the
company concerned, are managed by a person appointed for the purpose by a court
or other Governmental Authority) in relation to either Vendor in relation to the
Operations, nor has any such order been made.
4.5.3 No receiver (including an administrative receiver),
liquidator, trustee, administrator, custodian or similar official has been
appointed in any jurisdiction in respect of the whole or any part of the
business or assets of either Vendor or in respect of any of the Acquired Assets
and, so far as either Vendor is aware, no step has been taken for or with a view
to the appointment of such a person.
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4.5.4 Neither Vendor is insolvent or unable to pay its debts
as they become due.
5. TRADING AND CONTRACTUAL ARRANGEMENTS
5.1 CAPITAL COMMITMENTS
Except as set forth in the Disclosure Letter, there are no
material capital commitments entered into or proposed by or on behalf of the US
Vendor or the Canadian Vendor other than as set forth in the capital budgets.
For these purposes, a material commitment is one involving capital expenditure
of over $400,000.
5.2 ARRANGEMENTS WITH RELATED PERSONS ETC.
5.2.1 Except as described in the Disclosure Letter, there is
no indebtedness (actual or contingent) nor any indemnity, guarantee or security
arrangement between or among either Vendor, any member of the Vendors' Group,
any officer, Senior Employees or director of either Vendor or any husband or
wife of such persons.
5.2.2 Except as described in the Disclosure Letter, or for
Contracts, arrangements or understandings related to compensation or employment,
neither Vendor nor any member of the Vendors' Group is party to any Contract,
arrangement or understanding with any officer, Senior Employee or director of
either Vendor or any husband or wife of such persons, or in which any such
person as aforesaid is interested (whether directly or indirectly), other than
on normal commercial terms in the ordinary course of business.
5.2.3 There are no existing Contracts or arrangements with a
value in excess of $500,000, per annum between or involving either Vendor and
any member of the Vendors' Group other than in the ordinary course of business.
5.3 CONTRACTS
5.3.1 Section 5.3.1 of the Disclosure Letter lists the
following types of Contracts to which either Vendor is a party and which relate
to the Operations (MATERIAL CONTRACTS):
(a) any agreement (or group of related agreements) for the lease
of personal property to or from any person providing for lease
payments in excess of $1,000,000 (one million dollars), per
annum;
(b) any agreement (or group of related agreements) for the
purchase or sale of raw materials, commodities, supplies,
products, or other personal property, or for the furnishing or
receipt of services, the performance of which will extend over
a period of more than one year, or involve consideration in
excess of $2,500,000 (two million five hundred thousand
dollars;
(c) any agreement concerning a partnership or joint venture;
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(d) any agreement (or group of related agreements) under which it
has created, incurred, assumed, or guaranteed any indebtedness
for borrowed money in excess of $1,000,000 (one million
dollars), including any capitalized lease obligation under
which it has imposed a security interest on the Acquired
Assets; and
(e) any other agreement (or group of related agreements) the
performance of which involves consideration in excess of
$2,500,000 (two million five hundred thousand dollars) other
than customer contracts or distribution agreements, the
performance of which involves consideration in excess of
$7,500,000 (seven million five hundred thousand dollars).
The Vendors have delivered to the Purchaser a correct and
complete copy of each written agreement listed in Section 5.3.1 of the
Disclosure Letter (as amended to date) and a written summary setting forth the
terms and conditions of each oral agreement referred to in Section 5.3.1 of the
Disclosure Letter.
5.3.2 With respect to each Material Contract (i) neither
Vendor is in material breach or default, and to the knowledge of the Vendors, no
other party is in breach or default and (ii) no event has occurred which with
notice or lapse of time would constitute a material breach or default, or permit
termination, modification, or acceleration, under the agreement.
5.3.3 Except as set forth on the Disclosure Letter, neither
Vendor is party to any unusual, long-term or onerous commitments, contracts or
arrangements and any such not wholly on an arm's length basis in the ordinary
course of business. For the purposes of this representation and warranty, a
long-term commitment, contract or arrangement is one which is incapable of
termination without cause by either Vendor on 180 days' notice or less.
5.3.4 Except as set forth in the Disclosure Letter, neither
Vendor is party to any agency, distributorship, marketing, purchasing,
manufacturing or licensing agreement or arrangement or any agreement or
arrangement which restricts its freedom to carry on its business as currently
carried on in any part of the world in such manner as it thinks fit so as to
have a material adverse effect on the relevant Operations.
6. EMPLOYEES
6.1 GENERAL
6.1.1 There are no persons employed by the US Vendor or by the
Canadian Vendor as of the date hereof other than the Employees identified in the
Disclosure Letter.
6.1.2 The Disclosure Letter contains and sets forth a complete
list of the following items as of the date of this Agreement:
(a) The details, numbers and categories of Employees
at each facility.
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(b) A list of all persons working at each facility
who are independent contractors, leased employees, consultants or who otherwise
perform work at any facility.
(c) A list and summary, including status, of all
pending grievances brought or filed by individual Employees or a labor union or
organization.
(d) A list and summary, including status, of all
outstanding demands for arbitration brought or filed by individual Employees or
a labor union or organization.
(e) A list of all outstanding workers' compensation
claims and their anticipated valuation and/or reserve amounts.
(f) A list of all outstanding hearing loss claims and
their anticipated valuation and/or reserve amounts.
(g) A list and summary, including status, of all
pending investigations or on-going audits by any local, state/province or
federal/national agencies of any facility, including, without limitations,
claims related to safety, employment discrimination, unfair labor practices,
affirmative action, compensation, benefits or EEO-1 compliance.
(h) A list of all Collective Bargaining Agreements
between US Vendor and Canadian Vendor and the labor unions or organizations that
represent Employees.
(i) A list of all written agreements between US
Vendor or Canadian Vendor and any of their respective labor/labour unions which
might interpret or change the plain language of any Collective Bargaining
Agreement.
(j) A list of all known current organizing efforts by
any labor organization or union of the Employees of any of US Vendor's and
Canadian Vendor's facilities, including inter-union jurisdictional disputes.
(k) A list of all employees, by facility, who have
been laid-off or separated from employment due to economic conditions during the
six (6) months prior to the date of this Agreement.
6.1.3 Except as disclosed in the Disclosure Letter, the
Vendor's facilities have been and are being operated in compliance with all Laws
relating to Employees, including, without limitation, employment standards,
occupational health and safety, pay equity and human rights, document and record
retention, except where the failure to be in compliance would not have a
material adverse effect on the Operations or the financial condition or results
of operations thereof.
6.1.4 There are no employment Contracts relating to Continuing
Employees except those which have been reduced to writing and provided to
Purchaser on or before the date hereof (or described in the Disclosure Letter).
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6.1.5 All written individual Contracts of employment have been
disclosed to the Purchaser in the Disclosure Letter.
6.1.6 Neither the US Vendor nor the Canadian Vendor is party
to any contractual arrangement to make material changes to remuneration or other
benefits or other terms of employment or to establish any new bonus arrangements
for the Employees, except as stated in the Collective Bargaining Agreements
identified in the Disclosure Letter or in the employment Contracts listed in
Schedule 12 Section 1.1, of the Disclosure Letter.
6.1.7 All current assessments under the Workplace, Safety and
Insurance Act (Ontario), the Workers' Health and Safety Commission (CSST)
(Quebec) and the Saskatchewan Workers' Compensation Act in relation to the
Canadian Vendor have been paid or accrued and the Canadian Vendor has not been
subject to any special or penalty assessment under such legislation which has
not been paid.
6.1.8 There are no claims or complaints, except those set
forth in the Disclosure Letter, nor, to the knowledge of the Vendors, are there
any threatened claims or complaints, against the Vendors, before any employment
standards branch, pay equity, human or civil rights tribunal in the United
States or Canada. To the knowledge of the Vendors nothing has occurred which
might lead to a complaint against the Vendors, under any human rights
legislation or employment standards legislation. There are no outstanding
decisions or settlements or pending settlements which place any obligation upon
the Vendors to deal or refrain from doing any act, except as set forth in the
Disclosure Letter.
6.2 TERMINATION OF EMPLOYMENT
6.2.1 There are no claims outstanding on the date of this
Agreement related to breach of contract of service, termination or severance
obligations (either statutory or at common law), compensation for dismissal
(either wrongful or constructive), equal pay, sex, race, disability or other
discrimination with respect to any of the individuals identified on Schedule 11
of this Agreement or the Employment Letter.
6.2.2 As of the date of this Agreement, and except as stated
in Schedule 11 and the Employment Letter, no Senior Employee has given to a
Vendor or received from a Vendor notice terminating his employment or
engagement.
6.2.3 No Liability which remains undischarged as of the date
of this Agreement has been incurred by the US Vendor or the Canadian Vendor for
breach of any contract of service or for termination or separation payments or
for compensation for dismissal (wrongful or constructive), equal pay, sex, race,
disability or other discrimination or failure to comply with any order for the
reinstatement or re-engagement of any of the Continuing Employees.
6.3 DISCLOSURES OF EMPLOYMENT TAXES, EMPLOYEE LOANS AND
COMPENSATION
6.3.1 The Vendors have paid to the appropriate authorities all
Taxes, statutorily required payroll withholdings, and other contributions and
charges due and payable in respect of the
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Employees in respect of their employment by the US Vendor and the Canadian
Vendor up to Closing or such amounts have been or will be accrued for in the Net
Asset Statement.
6.3.2 Particulars of all loans made by the Vendors to
Continuing Employees which are in excess of $15,000 and which shall remain
outstanding at Closing, together with sums owed by the Vendors to any Employee
(other than remuneration and other contractual or customary benefits) which are
in excess of $15,000 are disclosed in the Disclosure Letter.
6.3.3 There are no accrued wages, overtime, bonuses, accrued
vacation or sales commissions owed to any Continuing Employee, other than those
which may be owing for the pay or payment period immediately preceding the
Closing; such payments to be made by Vendors, except as provided in Schedule 12
of the Agreement.
6.4 PAYMENTS ON TERMINATION
6.4.1 All outstanding separation agreements, termination
agreements or settlement agreements, any obligations therein, or obligations to
pay termination or severance pay pursuant to any such agreements or statute,
common law or otherwise, which arises with respect to services provided prior to
Closing (other than those identified on Schedules 11 or 12 or in the Employment
Letter) are Excluded Liabilities.
6.4.2 Without limiting Paragraph 6.4.1, Vendors shall also be
responsible for any and all payments arising out of the special performance
letters dated August 20, 1998, and August 24, 1998, concerning ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
6.4.3 There are no breaches and/or terminations of any
contracts with leased or contingent employees, independent contractors,
consultants or persons who provide labor, but who are the employees of any third
party entity, who perform work at any facility, other than those listed in the
Disclosure Letter.
6.4.4 Within the period of one year preceding the date hereof
neither Vendor in relation to the Operations has been obliged by statute to give
notice of terminations to a relevant authority or started consultations with any
Employee representative body relating to any such termination.
6.5 COLLECTIVE BARGAINING RELATIONSHIPS
6.5.1 Vendors have fully complied with all of their
obligations to bargain with the appropriate unions over the effects of the
transactions contemplated by this Agreement.
6.5.2 There are no outstanding labour tribunal, Saskatchewan
Labour Relations Board, Quebec Labour Court and/or Quebec Labour Commissioner,
Ontario Labour Relations Board proceedings or United States National Labor
Relations Board proceedings or proceedings before the labor relations board of
any state within the United States of any kind, including, without limitations,
any unfair labor practice, enforcement or compliance proceedings or proceedings
which could result in certification of a trade union as bargaining agent or
collective bargaining representative for any
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Employees or dependant contractors of the Vendors not already covered by the
Collective Bargaining Agreements identified in the Disclosure Letter.
6.5.3 There are no strikes or lockouts, as these terms are
defined under both United States labor law and Canadian labour law. Neither
Vendor has any unresolved grievances or pending arbitration matters, other than
those listed on the Disclosure Letter.
6.5.4 To the knowledge of the Vendors there are no
labor/labour problems that might materially affect the value of the facilities
or the Purchaser's ability to operate any facility after the Closing.
6.6 PENSIONS AND OTHER EMPLOYEE BENEFITS
6.6.1 Employee Benefit Arrangements
All of the Employee Benefit Arrangements in which the US
Vendor and/or the Canadian Vendor have entered into, participate, or have
liability for, are listed in Disclosure Letter and are expressly identified
therein as between the US Vendor and the Canadian Vendor, as applicable.
6.6.2 Disclosure
With respect to Employee Benefit Arrangement assumed by
Purchasers, current and complete copies of all written Employee Benefit
Arrangements or, where oral, written summaries of the material terms thereof,
have been provided or made available to the Purchasers together with current and
complete copies of all documents relating to the Employee Benefit Arrangements,
including, without limitation, as applicable, (i) all documents establishing,
creating or amending any Employee Benefit Arrangement; (ii) all trust
agreements, insurance contracts and investment management agreements; (iii) all
Form 5500 financial statements and accounting statements and reports, and
investment reports for each of the last three (3) years and the three (3) most
recent actuarial reports, if applicable (iv) all reports, returns, filings and
material correspondence with any Government Authority in the last three (3)
years; and (v) all booklets, summaries or manuals prepared for or circulated to,
and written communications of a general nature to Employees concerning any
Employee Benefit Arrangements.
6.6.3 Regulation
All of the Vendors' Employee Benefit Arrangements to be
assumed by US Purchaser are, and have been, operated in material compliance with
their provisions and with all applicable laws including, without limitation,
ERISA and the Code and the regulations and rulings thereunder. To the US
Vendor's knowledge all fiduciaries of such Employee Benefit Arrangements have
materially complied with the provisions of such Employee Benefit Arrangements to
be assumed by the US Purchaser and with all applicable laws including ERISA and
the Code and the regulations and rulings thereunder. All of the Canadian
Vendor's Employee Benefit Arrangements are, and have been established,
registered, qualified, administered and operated in material compliance with all
applicable Canadian Laws.
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6.6.4 Claims
With respect to Employee Benefit Arrangements assumed by
Purchasers, except as described in the Disclosure Letter, there are no pending
actions, claims or lawsuits which have been asserted or instituted against any
of the Employee Benefit Arrangements, the assets of any of the trusts under such
Employee Benefits Arrangements, the sponsor, the administrator or against any
fiduciary of any of the Employee Benefits Arrangement (other than routine
benefit claims) nor does US Vendor and/or Canadian Vendor have knowledge of
facts which could form the basis for any such action, claim or lawsuit. Except
as described in the Disclosure Letter, there are no investigations or audits by
any Government Authority of any of Employee Benefit Arrangements to be assumed
by Purchasers, any trusts under such Arrangement, the sponsor, the administrator
or any fiduciary of any of Employee Benefit Arrangements which have been
threatened or instituted nor do US Vendor and/or Canadian Vendor have knowledge
of facts which could form the basis for any such investigation or audit. No
event has occurred respecting any Employee Benefit Plan of the Canadian Vendor
which would entitle any person without the consent of the Canadian Vendor to
wind-up or terminate, in whole or in part any such Employee Benefit Arrangement
or which could reasonably be expected to adversely affect the Tax status
thereof.
6.6.5 Contributions/Benefit Obligations
All material obligations under the Employee Benefit
Arrangements to be assumed by Purchasers (whether pursuant to the terms thereof
or applicable law) have been satisfied, and there are no outstanding defaults or
violations thereunder by the US Vendor or Canadian Vendor nor does either have
any knowledge of any default or violation by any other party to any Employee
Benefit Arrangements.
All contributions or premiums required to be paid to or in
respect of each Employee Benefit Arrangement to be assumed by Purchasers have
been paid in a timely fashion in accordance with the terms thereof and all
applicable law, and no Taxes, penalties or fees are owing or eligible under any
Employee Benefit Arrangements.
Except as noted in the Disclosure Letter, neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment (including,
without limitation, severance, unemployment compensation, golden parachute or
otherwise) becoming due under any Employee Benefit Arrangement, (ii) increase
any benefits otherwise payable under any Employee Benefit Arrangement, or (iii)
result in the acceleration of the time of payment or vesting of any such
benefits to any extent. Except as disclosed in the Disclosure Letter, no
amendments to any Employee Benefit Arrangement of the Canadian Vendor has been
made, nor have any improvements thereto been promised.
6.6.6 Funding
Except as noted in the Disclosure Letter, all Employee Benefit
Arrangements to be assumed by Purchasers are fully funded on an ongoing basis
and on a termination basis with respect to any benefit obligation accrued as of
the date of this Agreement. US Vendor maintains a reserve
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adequate to satisfy timely claims made with respect to the Employee Benefit
Arrangements that the US Purchaser is assuming, including, but not limited to,
claims made under any Employee Benefit Arrangement which provides health and
medical benefits for Employees and retired Employees.
6.6.7 Rights to Excess Assets/Reserves
US Vendor has an unqualified right with respect to any assets
under any Employee Benefit Arrangement assumed by the US Purchaser which exceed
accrued benefit obligations under such Employee Benefit Arrangement. US Vendor
shall have an unqualified right with respect to any unused reserves held with
respect to any Employee Benefit Arrangement assumed by the US Purchaser. Neither
US Vendor nor Canadian Vendor has pledged or otherwise encumbered any excess
assets or reserves except to the extent specifically permitted in the documents
governing the appropriate Employee Benefit Arrangement. The Canadian Vendor has
not received, nor applied for, any payment of surplus out of any Canadian
Employee Benefit Arrangement except in accordance with applicable law nor have
there been any improper transfers of assets from any Canadian Employee Benefit
Arrangement to any other Canadian Employee Benefit Arrangement or otherwise, and
the Canadian Vendor is entitled under the terms thereof and under applicable law
and regulatory policy to fund employer contribution obligations out of the
assets of any Canadian Employee Benefit Arrangement.
7. INTENTIONALLY OMITTED
8. ASSETS AND LIABILITIES
8.1 TITLE
8.1.1 The US Vendor has good title to all of the US Assets and
the Canadian Vendor has good title to all of the Canadian Assets, in each case
other than Intangible Property and Real Property, free and clear of any
Encumbrance, except for Encumbrances listed in Section 8.1.1 of the Disclosure
Letter. The Acquired Assets constitute all of the assets that are necessary to
conduct the Operations in substantially the same manner as such Operations are
conducted as of the date hereof.
8.1.2 All Tangible Property of the Vendors is located at the
offices or facilities of the Vendors, or the Vendors each have the full and
unqualified right to require the return of any of its respective Tangible
Property which is not located at its offices or facilities as soon as practical.
The Acquired Assets other than Tangible Property are, where capable of
possession, in the possession of or under the control of either Vendor, or
either Vendor is entitled to take such possession or control as soon as
practical.
8.2 INSURANCE
The Disclosure Letter sets forth summary details of the
insurances of the Vendors material to the Operations as on the date of this
Agreement.
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8.3 TANGIBLE PROPERTY
All Tangible Property of the Vendors material to the
Operations as currently conducted, wherever located, is in satisfactory working
order, ordinary wear and tear excepted and having regard to the age of such
Tangible Property, and have been properly maintained.
8.4 INTANGIBLE PROPERTY
8.4.1 The US Vendor or the Canadian Vendor owns or has the
right to use pursuant to license, sublicense, agreement, or permission all
Intangible Property which is necessary for the Operations as conducted. Subject
to obtaining any Third Party Consents, each such item of Intangible Property
(other than Software) owned or used by the US Vendor and Canadian Vendor
immediately prior to Closing hereunder will be owned or available for use by the
Purchasers on materially the same terms and conditions immediately subsequent to
Closing hereunder, other than to the extent that the failure to own or use such
Intellectual Property would not have a material adverse effect on the Operations
or the financial condition or results of operations thereof. All fees regarding
such Intangible Property due on or before Closing have been paid in full or are
fully reserved on the Net Asset Statement.
8.4.2 (a) To the knowledge of the US Vendor and the Canadian
Vendor, neither the US Vendor, the Canadian Vendor nor the Operations have
interfered with, infringed upon or misappropriated any Intangible Property
rights of third parties in any material respect.
(b) Neither the US Vendor, nor the Canadian Vendor
has knowledge of any facts or circumstances or has received any complaint,
claim, demand, or notice alleging any such interference, infringement,
misappropriation, or violation (including any claim that the US Vendor or the
Canadian Vendor must license or refrain from using any Intangible Property that
is included on the Acquired Assets rights of any third party). To the knowledge
of the US Vendor and the Canadian Vendor, no third party has interfered with,
infringed upon, misappropriated, or otherwise come into conflict with any
Intangible Property rights that are included in the Acquired Assets of the US
Vendor or the Canadian Vendor in any material respect.
8.4.3 Schedule 15 of this agreement identifies:
(a) each patent (including issuing country, number, current
assignee of record, title and issue date), each trademark and service ▇▇▇▇
registration (including issuing country, number, description of ▇▇▇▇, current
owner of record, classes of goods or services, and issue date), each
unregistered trademark and service ▇▇▇▇ that is material to the Operations for
which no application for registration is pending (including a description of the
▇▇▇▇ and the goods or services with which it is used) and each copyright
registration (including issuing country, number, title or description of work,
current owner of record and issue date) currently in effect, owned by the US
Vendor or the Canadian Vendor and included in the Acquired Assets.
(b) each pending patent application (including country of
filing, serial number, pending patent application (including country of filing,
serial number, current owner of record, title and filing date), application for
registration of a trademark or service ▇▇▇▇ (including country of filing,
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serial number, description of ▇▇▇▇, current owner of record, classes of goods or
services, and filing date), which the US Vendor or Canadian Vendor has made with
respect to any of their Intangible Property which is included in the Acquired
Assets; and
(c) identifies each material license, agreement, or other
permission which the US Vendor or the Canadian Vendor has granted to any third
party with respect to any of the owned Intangible Property that is included in
the Acquired Assets (together with any exceptions). The US Vendor and the
Canadian Vendor have made available to Purchaser correct and complete copies of
all such patents, registrations, applications, permits, agreements and
permissions (as amended to date).
8.4.4 With respect to each item of Intangible Property that
the US Vendor or the Canadian Vendor owns and which is included in the Acquired
Assets, except as otherwise set forth in Schedule 15:
(a) the US Vendor or the Canadian Vendor possesses
all right, title, and interest in and to the item, free and clear of any
Encumbrance, license, or other restriction;
(b) the item is not subject to any outstanding
injunction, Judgment, order, decree, or ruling;
(c) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending or, to the
knowledge of the US Vendor or the Canadian Vendor, is threatened which
challenges the legality, validity, enforceability, use, or ownership of the
item; and
(d) the US Vendor and the Canadian Vendor have not
agreed to indemnify any person for or against any interference infringement,
misappropriation, or other conflict with respect to the item.
8.4.5(a) Schedule 15 identifies each item of Intangible
Property that is included in the Acquired Assets and that is material to the
Operations that any third party owns and that the US Vendor or the Canadian
Vendor uses in the Operations pursuant to license, sublicense, agreement, or
permission. The US Vendor and the Canadian Vendor have made available to the
Purchaser correct and complete copies of all such licenses, sublicenses,
agreements, and permissions (as amended to date).
(b) With respect to each item of Intangible Property
required to be identified in Schedule 15:
(i) the Vendors are not in material breach or
default under any such license, sublicense or agreement;
(ii) to the knowledge of the US Vendor and the
Canadian Vendor, no party to the license, sublicense, agreement, or permission
is in material breach or default,
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(iii) to the knowledge of the Vendors, no event
has occurred which with notice or lapse of time would constitute a material
breach or default or permit termination, modification, or acceleration
thereunder; and
(iv) the US Vendor and the Canadian Vendor have
not granted any sublicense or similar right with respect to the license,
sublicense, agreement, or permission.
8.4.6 The US Vendor and the Canadian Vendor shall execute
Assignments of their respectively-owned Intangible Property in the form set
forth in Exhibit A to Schedule 15.
8.5 INFORMATION TECHNOLOGY
Details of procedures for Year 2000 compliance of the
Information Technology are disclosed on the Disclosure Letter and such
procedures disclose the actual status of the Vendors' efforts with respect to
addressing any Year 2000 issue, including identifying any Information Technology
that is Year 2000 capable. For the purposes of this Section 8.5.1, INFORMATION
TECHNOLOGY means all computer systems, communications systems, software,
computer hardware and other similar information technology used in connection
with or required to carry on the business of either Vendor (as they relate to
the Operations).
9. REAL PROPERTY
In no event shall the Vendors or the Vendors' Guarantor be
liable for a breach of a Warranty contained in this Section 9 in the event that
it is shown that the factual circumstances or matters which (a) give rise to the
claim for a breach of a Warranty would be shown in a commitment to issue title
insurance prepared by a nationally recognized title insurance company or on an
accurate survey of the property in question and (b) shall not materially
adversely interfere with the use of the Real Property in question as it is
currently used.
9.1 REAL PROPERTY
The Real Property included in this transaction is set out in
Schedule 1 and the particulars contained or referred to therein are true and
correct.
9.2 TITLE
The US Vendor or the Canadian Vendor, as the case may be, is
the legal and beneficial owner or lessee, as the case may be, of the Real
Property included in the Acquired Assets.
9.3 RIGHTS AND EASEMENTS
All of the Vendor Owned Real Property has the benefit of such
rights and easements which are necessary for the existing use of such Real
Property. There are no easements which encroach upon any of the Improvements
constructed or located on any of the Vendor Owned Real Property which materially
adversely interfere with the Operations use of such Real Property.
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The US Vendor and Canadian Vendor have such rights of entry and exit to and from
the Real Property included in the Acquired Assets as are reasonably necessary to
conduct their business upon such Real Property.
9.4 PERFORMANCE OF OBLIGATIONS AFFECTING THE REAL PROPERTY
The US Vendor or the Canadian Vendor, as the case may be, has
not received written notice of any material breach of any obligation, condition,
restriction, agreement or statutory requirement affecting the Real Property
included in the Acquired Assets, its occupation of such Real Property or the
existing use thereof, and has no knowledge of any material breach of any
obligation, condition, restriction, agreement or statutory requirement affecting
such Real Property, its occupation of such Real Property or the existing use
thereof.
9.5 DISPUTES AND NOTICES
So far as the US Vendor or the Canadian Vendor, as the case
may be, is aware, there are no outstanding disputes or notices, and neither
Vendor has received written notices, of any outstanding disputes or notices
affecting the Real Property included in the Acquired Assets which has or is
reasonably likely to have a material adverse effect on the Operations conducted
at such Real Property.
9.6 USE
Neither the US Vendor nor the Canadian Vendor, as the case may
be, has received written notice of, and the Vendors have no knowledge of any
outstanding dispute as to the use of the Real Property included in the Acquired
Assets or any current contravention of the relevant Laws (including, zoning,
land use and planning Laws) or any alleged breach of applicable Laws which has
or is reasonably likely to have a material adverse effect on the Operations
carried out at such Real Property.
9.7 LEASES
So far as either Vendor is aware:
9.7.1 there is no material breach of lease terms which are
likely to adversely affect the business carried out at the Real Property
included in the Acquired Assets; and
9.7.2 any principal rent payable in respect of the Real
Property included in the Acquired Assets is not in the course of being reviewed
other than on rent review terms provided in the relevant Lease and neither
Vendor has received any written notice to the contrary.
9.8 PROPERTY SUBJECT TO OCCUPATIONAL INTERESTS
There is no Vendor Owned Real Property which is subject to any
lease or licence in favor of a third party.
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9.9 REAL PROPERTY
9.9.1 None of the Vendor Owned Real Property, nor the
ownership, possession, occupancy, maintenance or use thereof, is in violation
of, or breach or default under, any Contract or Law, and no notice, work order,
directive, or threat from any lessor, Governmental Authority or other Person has
been received by the US Vendor or the Canadian Vendor, as the case may be, or
served upon any such Real Property claiming any violation of, or breach, default
or liability under, any Contract or Law, or requiring or calling attention to
the need for any work, repairs, construction, alteration, installations or
environmental remediation.
9.9.2 No casualty has occurred with respect to any of the Real
Property included in the Acquired Assets within the last six (6) months which
has had a material adverse effect on the use or operation of such Real Property.
9.9.3 To the knowledge of either Vendor, no proceedings are
pending or threatened which would affect the zoning or use any of the Real
Property included in the Acquired Assets.
9.9.4 All utilities, including water, gas, telephone,
electricity, sanitary and storm sewers, are currently available to all of the
Vendor Owned Real Property at normal and customary rates, and are adequate to
serve such Real Property for each of the current operations and current use
thereof by the US Vendor or the Canadian Company, as the case may be.
9.9.5 No person, firm, corporation or other entity, other than
the US Vendor or the Canadian Vendor, as the case may be (or any Affiliate or
Subsidiary thereof) has any right or option to acquire the Vendor Owned Real
Property or any portion thereof which is owned by the US Vendor or the Canadian
Vendor, as the case may be, or lease or occupy any portion thereof.
9.9.6 Neither Vendor has received written notice of any
material breach of the applicable Vendor's obligations under any easements,
covenants, reservations, restrictions or right-of-way agreements which affect
the Vendor Owned Real Property.
9.9.7 Neither the US Vendor nor the Canadian Vendor, as the
case may be, has received written notice from any Governmental Authority, any
insurer, or any other party (i) that either the Real Property included in the
Acquired Assets or the use or operation thereof is currently in violation of any
Law and to the knowledge of the US Vendor or the Canadian Vendor, as the case
may be, no such notice has been issued; (ii) that the US Vendor or the Canadian
Vendor, as the case may be, is currently in violation or with the passage of
time will be in violation of any Laws or the recommendations of any insurance
carrier or board of fire underwriters affecting the Real Property included in
the Acquired Assets or that any investigation has commenced or is contemplated
regarding any such possible violation, or (iii) asserting that the US Vendor or
the Canadian Vendor, as the case may be, is required to perform work at the Real
Property included in the Acquired Assets and to our knowledge of the US Vendor
or the Canadian Vendor, as the case may be, no such notices have been issued.
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9.9.8 There are no persons other than the US Vendor or the
Canadian Vendor, as the case may be, in possession of any portion of the Real
Property included in the Acquired Assets or Improvements as lessees, tenants at
sufferance or trespassers.
9.9.9 The leases described on Schedule 1 comprise all of the
real property leases presently existing and each is in full force and effect as
of date hereof in which the US Vendor or the Canadian Vendor, as the case may
be, is a landlord or a tenant. None of the leases has been modified, altered, or
amended in any respect, and neither the US Vendor nor the Canadian Vendor, as
the case may be, has the right to cancel or terminate any lease, except as set
forth in the Disclosure Letter. Neither the US Vendor nor the Canadian Vendor,
as the case may be, has received any written notice that it is in default under
any lease. Except as specified on Schedule 1, the US Vendor or the Canadian
Vendor, as the case may be, is in possession of its respective premises. The US
Vendor or the Canadian Vendor, as the case may be, does not have any offsets,
defenses, claims or causes of actions against landlord arising out of matters
occurring prior to Closing.
Within ten (10) business days from the date of this
Agreement, the US Vendor or the Canadian Vendor, as the case may be, shall
request an estoppel certificate from the landlord thereof confirming, among
other things that: (a) a true and correct copy of the lease is attached and that
the Lease is in full force and effect, and has not been modified or amended in
any respect whatsoever, except as specifically set forth; (b) the tenant is not
in default under the lease; (c) the tenant has not prepaid any rent for a period
of more than thirty (30) days from the date hereof; and (d) upon Closing,
Landlord will and does hereby agree to recognize Purchaser as its tenant as
successor to the tenant, said consent to be effective and self operative without
the execution of any further instruments upon Purchaser's succeeding to the
interest of tenant under the lease. The US Vendor or the Canadian Vendor, as the
case may be, agrees: (x) to use commercially reasonable efforts to pursue,
obtain and deliver such estoppel certificates to Purchaser on or prior to
Closing and (y) to cooperate with Purchaser to permit Purchaser to participate
in obtaining such certificates.
9.9.10 Neither the US Vendor nor the Canadian Vendor, as the
case may be, shall take any action prior to Closing which would affect the
current zoning classification of any of the Real Property included in the
Acquired Assets.
9.9.11 Neither the air rights over the Vendor Owned Real
Property nor any other "development rights" with respect to such Real Property
have been assigned, transferred, leased or encumbered.
9.9.12 There are no property interests, buildings, structures,
or other improvements that are owned or held by the US Vendor or the Canadian
Vendor, as the case may be, and which are necessary or currently used for the
Operations that are not being conveyed pursuant to the Agreement (e.g., adjacent
parcels for parking, expansion, development and the like).
9.9.13 All accounts for work and services performed or
materials placed or furnished upon or in respect of the construction and
completion of any of the buildings,
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improvements or other structures constructed on the Vendor Owned Real Property
have been fully paid and no one is entitled to claim an Encumbrance under the
Construction Lien Act (Ontario) or other similar legislation for such work
performed by or on behalf of the Canadian Vendor, and neither Vendor has
received any notification of and neither has knowledge of, any outstanding or
incomplete work orders in respect of any of the buildings, improvements or other
structures constructed on the Real Property included in the Acquired Assets.
9.9.14 Neither Vendor has any knowledge of any expropriation
or condemnation or similar proceeding pending or threatened against the Real
Property included in the Acquired Assets or any part of such Real Property.
9.9.15 Each of the US Vendor and the Canadian Vendor, as the
case may be, has good, marketable and insurable legal title in fee simple
absolute to all of the Vendor Owned Real Property, free and clear of any
Encumbrance except current property taxes accrued but not yet due and payable,
subject to such other exceptions as do not materially and adversely affect the
operations conducted at such Real Property.
10. QUESTIONABLE PAYMENTS
No current or former director, executive, officer, representative,
agent or employee of either Vendor (when acting in such capacity or otherwise on
behalf of either Vendor or any of their predecessors), has violated or is
violating any provision of the Foreign Corrupt Practices Act of 1977.
11. COMPETITION ACT (CANADA)
The Canadian Vendor, together with its affiliates, have assets in
Canada that are less than $90 Million (Canadian) in aggregate value, determined
as of such time and in such manner as is prescribed under the Competition Act
(Canada) and its regulations and have gross revenues from sales in, from or into
Canada, determined for such annual period and in such manner as is prescribed
under such Act and its regulations, that are less than $155 Million (Canadian)
in aggregate value.
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SCHEDULE 9
WARRANTIES FROM THE PURCHASERS
Knowing that the Vendors rely thereon the Purchasers jointly and
severally represent and warrant to the Vendors as follows:
1. AUTHORITY AND CAPACITY
1.1 Each Purchaser and the Purchaser's Guarantor is a corporation duly
incorporated and validly existing under its respective laws of incorporation.
1.2 Each Purchaser has the legal right and full power and authority to
enter into and perform its obligations under this Agreement and any other
agreement entered into pursuant to this Agreement and each such agreement when
executed will constitute valid and binding obligations on the Purchaser, and/or
each Relevant Purchaser (as the case may be) in accordance with their respective
terms, subject to enforcement of remedies to applicable bankruptcy, insolvency,
reorganization and similar laws generally affecting the enforcement of rights of
contracting parties and to a court's discretionary authority with respect to the
granting of a decree ordering specific performance or other equitable remedies.
1.3 The execution and delivery of, and the performance by each
Purchaser of its respective obligations under, this Agreement and any other
agreement entered into pursuant to this Agreement will not:
(a) result in a violation of or default under any
provision of the articles of incorporation and bylaws of either Purchaser; or
(b) result in a breach of any Judgment to which
either Purchaser is a party or by which either Purchaser is bound.
1.4 All corporate action required to be taken by each Purchaser validly
and duly to authorize the execution and delivery of, and to exercise its rights
and perform its obligations under, this Agreement and any other agreement
entered into pursuant to this Agreement has been duly taken or will have been
duly taken before Closing.
1.5 There are no proposals to terminate the employment of any
Continuing Employees after the Closing, except those individuals identified in
Schedule 11, 11A, 11B or 11C, or to materially vary or amend terms and
conditions of employment of any Continuing Employee (whether to their detriment
or benefit), except as may be required by law or as contemplated by this
Agreement. This provision, however, is not and shall not be construed as a
guarantee that Purchaser will not make changes to personnel subsequent to the
Closing.
1.6 As at the date of this Agreement, no Senior Employee has given to
Purchasers or has received from Purchasers a notice terminating his employment.
2. FINANCING
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The Purchasers' Guarantor has entered into a definitive commitment
letter and term sheet with The Chase Manhattan Bank and Chase Securities Inc.
(collectively, CHASE), dated April 6, 1999, which, among other things, commits
Chase to provide up to approximately $1,100,000,000 of senior secured financing
(such commitment letter and term sheet, being the COMMITMENT). The Commitment
has not been modified or amended in any respect (except as approved in writing
by the Vendors' Guarantor) and is in full force and effect as of the date hereof
and as of the Closing Date. Together with proceeds to be made available under
the Commitment, the Purchasers' Guarantor has available, and will make available
to each Purchaser and Relevant Purchaser (as defined in both the Agreement and
the Non-North American Sale and Purchase Agreement), sufficient funds to pay the
Purchase Price (as defined in both the Agreement and the Non-North American Sale
and Purchase Agreement) and consummate the transactions contemplated pursuant to
each such agreement in accordance with the terms and conditions thereof.
Purchasers' Guarantor is not aware of any fact or circumstance which would
prevent the financing described in the Commitment from being provided to the
Purchaser.
3. COMPETITION ACT (CANADA)
The Canadian Purchaser, together with its affiliates, have assets in
Canada that are less than $150 million (Canadian) in aggregate value, determined
as of such time and in such manner as prescribed under the Competition Act
(Canada) and its regulations and have gross revenues from sales in, from or into
Canada, determined for such annual period and in such manner as is prescribed
under such Act and its regulations, that are less than $100 million (Canadian)
in aggregate value.
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SCHEDULE 10
PART 1
TRANSFER TAXES
The Vendors shall pay, or procure payment of, all stamp and other
transfer and registration Taxes and duties payable in respect of the sale and
purchase of the Operations other than the costs of recording of the deeds and
the related transfer taxes with respect to Real Property which shall be shared
equally by the Vendors on the one hand and the Purchasers on the other hand.
At the Closing, the Relevant Purchaser (to the extent that it is the
appropriate party to execute such materials) shall execute and deliver to the
Relevant Vendor exemption certificates as are reasonable and available at such
time with respect to the Acquired Assets in a form that meets the legal
requirements of any Governmental Authority in which such assets are located.
The Vendors and Purchasers agree that prior to Closing they will in
good faith attempt to reach an agreement regarding the value to be attributed to
each parcel of Real Property which will be transferred under the Agreement. They
further agree that in the event they are unable to reach such agreement with
respect to any such parcel of Real Property, each such parcel as to which no
agreement is reached will be deemed to have the value set forth below:
Valuation of Real Property for Transfer Tax Purposes
----------------------------------------------------
UNITED STATES
-------------
Malvern, AR (pound)2,767,741
Willimantic, CT (pound)4,500,000
DuQuion, IL (pound)1,553,981
Indianapolis, IN (pound) 262,500
Marion, IN (pound) 763,791
▇. ▇▇▇▇▇▇, MA (pound)1,367,513
Jackson, TN (pound)3,380,625
Scottsville, TX (pound)8,422,616
CANADA
------
La Malbaie, QU (pound) ▇▇▇,▇▇▇
▇▇. ▇▇▇▇▇▇, ▇▇ (▇▇▇▇▇)▇,▇▇▇,▇▇▇
▇▇▇▇▇▇▇, ▇▇ (pound) 406,250
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Moose Jaw, SAS (pound) 527,313
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SCHEDULE 11
EMPLOYEES
1. EMPLOYEES COVERED BY COLLECTIVE BARGAINING AGREEMENTS
1.1 Effective at the Closing, the Purchasers shall (A) assume
the obligations of the Vendors to the Employees who are represented by a labor
union or organization and who are working under the terms of an applicable
Collective Bargaining Agreement (UNION EMPLOYEES) and/or (B) accept the
obligation to recognize and to bargain in good faith with the applicable labor
unions or organizations to the extent required by law and (C) to make all Union
Employees Continuing Employees.
1.2 Nothing in this Agreement provides any additional rights
to the Union Employees, other than what already exists in their Collective
Bargaining Agreements.
1.3 Vendors shall, prior to Closing, provide notice to all
Union Employees of the transaction contemplated by this Agreement. Vendors will
cooperate with Purchasers, including reasonable efforts prior to the Closing, to
assist in the transition of labor relations, including, without limitation,
meeting with Purchasers designated representatives to review applicable past
practices and outstanding labor issues which may not appear in the applicable
Collective Bargaining Agreements.
1.4 Vendors will fully comply with and comply to any and all
obligations they have to bargaining with the labor union or organization which
represents the Union Employees.
1.5 Nothing contained in this Agreement shall be interpreted
as or explained to the Union Employees as a guarantee by Purchasers that after
the Closing it will not affect the number of Union Employees at any facility or
in the aggregate, or that Purchasers will not make changes to terms and
conditions of employment, consistent with prevailing law.
1.6 Vendors shall discharge or provide on the Net Asset
Statement all of their obligations to their former Union Employees, which were
accrued prior to the Closing, regardless of whether they become Employees of
Purchasers, including the payment of wages, salary, tax withholdings, bonuses,
commissions, vacation or holiday pay or workers compensation or any other
compensation except as provided in Schedule 12 of the Agreement. Payments
relating to all Employment Benefit Arrangements shall be determined as stated in
Schedule 12.
1.7 As soon as practicable after Closing, Vendors shall
deliver to the Purchasers either originals or copies (if originals no longer
exist or are not under the US Vendor's custody or control) of all records in
relation to Taxes arising out of the employment relationship and of any other
documents or records (including, but not limited to, personnel records and
files) which are relevant to the Continuing Employees.
2. EMPLOYEES NOT COVERED BY A COLLECTIVE BARGAINING AGREEMENT
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2.1 As of the Closing, Purchaser agrees to make all Employees
of the US Vendor at Closing, except those who are specifically designated in the
Employment Letter as Employees who will not be offered a position of employment
with Purchaser, Continuing Employees.
2.2 Purchasers expressly reserve the right to make changes in
personnel subsequent to the Closing, so long as these decisions are consistent
with any pre-existing Employment Agreements between Vendors and their former
Employees, which Purchaser has agreed to assume, and applicable law.
2.3 Nothing contained in this Agreement shall be interpreted
as a guarantee by Purchasers that after the Closing they will not affect the
number of Employees at any facility or in the aggregate, or that Purchasers will
not make changes to terms and conditions of employment, consistent with
prevailing law.
2.4 Vendors shall discharge all of their obligations to their
former Employees, which were accrued prior to Closing, regardless of whether
they become Continuing Employees, including the payment of wages, salary, tax
withholdings, bonuses, commissions, vacation or holiday pay or any workers
compensation or any other compensation except as provided in Schedule 12 of the
Agreement. Payments relating to all Employment Benefit Arrangements shall be
determined as stated in Schedule 12.
3. SPECIAL CONDITIONS FOR IDENTIFIED EMPLOYEES
3.1 Purchasers shall have no obligation to any Employee who is
specifically identified in the Employment Letter as not receiving a position of
employment with Purchasers and such Employees shall not become a Continuing
Employees and Purchasers shall have no obligation to compensate or make any
payment to such Employee arising from his employment with Vendors or any
termination arising therefrom, except as provided in Schedule 12 of the
Agreement.
3.2 Notwithstanding Paragraph 3.1 of Schedule 11, Purchasers
may provide the Employees identified in the Employment Letter with positions
with Purchasers as consultants for a period not to exceed three (3) months. The
time period for performing consulting services may be extended, in the sole
discretion of Purchasers, but such extensions must be in writing. Such Employees
shall not become Continuing Employees and Purchasers shall have no obligation to
compensate or make any payment to the Employees, other than for services
provided during the three (3) month contract period or longer period if
extended.
3.3 Subject to compliance with Section 5.3. of the Agreement,
Purchasers shall have the right, at any time subsequent to signing this
Agreement and prior to Closing, to meet with any Employee of US Vendor for the
purpose of discussing possible terms and conditions of employment between any
particular Employee and Purchasers. Such discussions shall not affect the terms
of any existing contract or cause or impose or result in any liability on
Purchasers, or on Vendors.
3.4 Subsequent to Closing modifications to any existing
employment agreement between a Continuing Employee and Vendors may only be
executed by a duly authorized representative of Purchasers, and may not impose
any additional obligation or liability on Vendors
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(including without limitation) under the individual employment contract or this
Agreement. Purchaser fully reserves the right to make personnel decisions
respecting these Continuing Employees. Such discussions shall not affect the
terms of any existing contract or cause or impose any liability on Purchaser, or
on Vendors. Vendors shall, upon reasonable notice from Purchasers, cooperate to
facilitate these discussions.
4 ASSUMED LIABILITIES
4.1 Vendors shall calculate, as soon as practical following
signing, the amount of legal entitlement and/or remuneration under the relevant
individually negotiated employment contracts, side letters, and amendments, to
those Employees listed in the Employment Letter who are specifically designated
as receiving positions of employment (excluding any offered consulting
positions) with Purchasers after Closing. Vendors will take due notice of
Purchasers' reasonable representations with regard to the above-referenced
calculations. Vendors will make available a pool of money to Purchasers in an
amount equal to one-half of this amount to be used exclusively for the purpose
of assisting Purchasers in convincing these designated Employees to accept
employment with Purchasers. Vendors will pay Purchasers pursuant to this
Paragraph 4.1 within five (5) days of receipt of evidence acceptable to Vendors
that Purchasers have made a proper payment in accordance with the foregoing to
the designated Employee.
4.2 Vendors shall also calculate, as soon as practical
following signing, the amount of legal entitlements under all negotiated
employment contracts, side letters, and amendments thereto potentially payable
to those Employees listed in the Employment Letter as not receiving positions
with the Purchasers.
4.3 Purchasers shall have the right to switch people between
the lists in the Employment Letter but Vendors' total aggregate liability to
Purchasers under Paragraph 4.1 of Schedule 11, and to the Employees who are not
receiving positions with the Purchaser under their Employment Contracts under
Paragraph 4.2 of Schedule 11 shall not increase as a result of such changes.
4.4 Any liability arising under the Workers Adjustment and
Retraining Notification Act ("WARN") or any similar state, local or provincial
law or regulation for events which arise on or after the Closing or resulting
from the consummation of the transactions contemplated hereby shall be an
Assumed Liability.
4.5 Purchaser shall assume the individual employment contracts
of those Employees who are listed in the Employment Letter as receiving a
position of employment with Purchaser. These individual employment contracts
shall become Assumed Liabilities.
4.6 All workers' compensation claims and related expenses
(including medical, legal and investigative) and hearing loss claims and related
expenses (including medical, legal and investigative) arising prior to Closing
are Excluded Liabilities.
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SCHEDULE 12
EMPLOYEE BENEFIT ARRANGEMENTS
1. US EMPLOYEES
1.1 ASSUMPTION OF EMPLOYEE BENEFIT ARRANGEMENTS Except for the Employee
Benefit Arrangements listed at Section 1.1.7 below, as of the Closing
Date the US Purchaser hereby assumes sponsorship of all Employee
Benefit Arrangements of the US Vendor listed in Schedule 12 of the
Disclosure Letter, and all responsibilities, obligations and
liabilities with respect to, or arising under, such Employee Benefit
Arrangements, including liabilities in connection with those
arrangements relating to current and former Employees of the US Vendor
whether arising before or after the Closing Date, shall be Assumed
Liabilities of the Purchaser.
1.1.1 With respect to the BICC Cables Corporation 401(k)
Savings Plan (the 401(K) PLAN), prior to the
assumption of the 401(k) Plan by the US Purchaser
pursuant to Section 1.1, the US Vendor shall transfer
the assets and liabilities of the 401(k) Plan
attributable to the accrued benefits of those
Employees who will remain employed at the corporate
headquarters of the US Vendor (listed in the
Disclosure Letter), in accordance with Sections
411(d)(6) and 414(l) of the Code, to a plan sponsored
within the controlled group of the US Vendor prior to
the Closing Date or as soon as practicable
thereafter;
1.1.2 In connection with the US Purchaser's assumption of
the BICC Relocation Loan Program, the US Purchaser
agrees to accept transfer of all mortgages with
respect to loans of all Continuing Employees of which
the US Vendor is the mortgagee. In the event that a
Continuing Employee with respect to whom a mortgage
was transferred by the US Vendor to the US Purchaser
is voluntarily or involuntarily terminated by the US
Purchaser within 90 days of the Closing Date, the US
Vendor agrees to purchase from the US Purchaser the
mortgage held with respect to such Continuing
Employee for an amount equal to the face amount of
the outstanding principal and accrued interest under
the mortgage.
1.1.3 In connection with the US Purchaser's assumption
pursuant to Section 1.1 of the Medical Benefit
Programs, including without limitation vision and
dental (other than excluded arrangements at Section
1.1.7), collectively referred to herein as the
"Medical Benefits Plan," the US Vendor shall cause
the reserves for any claims for medical expenses
incurred prior to the Closing Date to equal, as of
the Closing Date, 29% of the total amount of medical
expenses reimbursed pursuant to the Medical Benefits
Plan with respect to the 1998 calendar year (the
Reserve), against which US Purchaser shall on and
after the Closing Date reimburse under the Medical
Benefits Plan claims of individuals who were active
or former Employees
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of the US Vendor prior to Closing (excluding those
described at Section 1.1.7) for medical expenses
incurred prior to the Closing Date. The US Purchaser
shall continue to maintain or shall secure policies
comparable to, all stop loss policies currently in
place with respect to all active and former Employees
of the US Vendor. Only claims for reimbursement for
medical services actually provided on a date prior to
the Closing Date will be treated as "claims for
medical expenses incurred prior to the Closing Date."
The US Purchaser shall provide the US Vendor monthly
with a report of all reimbursements for medical
expenses incurred prior to the Closing Date by
individuals who were active or former Employees of
the US Vendor prior to the Closing Date with
sufficient information to verify the date on which
services were provided and the amount and the
appropriateness of the reimbursement; the US
Purchaser shall ensure that the US Vendor has at all
times the right to audit the relevant third party
administrator with respect to all such
reimbursements. On the first anniversary of the
Closing Date, the US Purchaser shall cause to be
prepared and delivered to the US Vendor a
reconciliation of the amount of the Reserve and all
reimbursements for claims for medical expenses
incurred prior to the Closing Date. In the event that
the amount of the Reserve exceeds the total amount of
all reimbursements for medical expenses incurred
prior to the Closing Date by individuals who were
active or former Employees of the US Vender prior to
the Closing Date, the excess will be returned to the
US Vendor. In the event that the Reserve (together
with any reimbursements from relevant stop loss
policies) is not sufficient to cover claims of
individuals who were active or former Employees of
the US Vendor prior to Closing Date for medical
expenses incurred prior to the Closing Date, the US
Vendor agrees to reimburse the US Purchaser for the
shortfall. Notwithstanding the foregoing, the US
Purchaser shall not pay, and the US Vendor shall in
no event reimburse the US Purchaser for, any claims
relating to the liabilities described at Section
1.1.7 for which the US Vendor remains responsible.
1.1.4 With respect to each Employee of the US Vendor whose
employment with the US Vendor terminates on or prior
to the Closing Date, and all of their relevant
dependents (collectively the COBRA QUALIFIED
BENEFICIARIES) the US Vendor shall provide any COBRA
notice and election forms relating to continuation
health care coverage provided under Part 6 of Title I
of ERISA and Section 4980E of the Code, and further
shall transmit to the US Purchaser any elections
filed with the US Vendor (along with any related
information) by any such person. In connection with
the US Purchaser's assumption pursuant to this
Section 1.1 of the Medical Benefit Plan, the US
Purchaser shall assume (without limitation)
responsibility for providing, to current and former
Employees of the US Vendor, continuation healthcare
coverage and the performance of all responsibilities
in connection therewith including without limitation
the payment of medical benefits. As of the date that
is 18 months after the date of Closing, a
reconciliation of all premiums
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paid, stop loss payments and reimbursements of the
COBRA Qualified Beneficiaries shall be performed. To
the extent that, as of the date that is 18 months
from the Closing Date, the total amount of (i)
premiums paid to the US Purchaser after the Closing
Date by COBRA Qualified Beneficiaries, plus (ii)
reimbursements from all applicable stop loss
policies, is less than (A) the total reimbursements
paid by the US Purchaser for claims for medical
services incurred after the Closing Date by COBRA
Qualified Beneficiaries, plus (B) the per capita per
month third party administrator fees and stop loss
premiums attributable to COBRA Qualified
Beneficiaries, an amount equal to the shortfall shall
be transferred by the US Vendor to the US Purchaser.
1.1.5 The US Purchaser shall reimburse claims pursuant to
paragraph 1.1.3 in accordance with the terms of the
US Vendor's Medical Plan as in effect immediately
prior to the Closing Date. (The US Purchaser reserves
the right to amend US Vendor's medical plan
prospectively, but such amendment shall in no event
apply to claims incurred pre-closing). The US
Purchaser shall reimburse claims pursuant to
paragraph 1.1.4 strictly in accordance with the terms
of the medical plans of the US Purchaser as in effect
at the time the relevant claims are incurred and as
applicable to all similarly situated employees.
Although the US Purchaser (and its relevant agents)
shall with respect to the medical plan and all
participants thereunder have fiduciary responsibility
for the grant or denial of all claims for benefits
that are filed after the Closing Date, as between the
US Vendor and the US Purchaser, at the time of
reconciliation of all claims (described in paragraphs
1.1.3 and 1.1.4)) the US Vendor shall have the right
to challenge the reconciliation, on any relevant
basis, including without limitation, the amount or
appropriateness of any claim granted.
1.1.6 The US Purchaser shall make payment (at the normal
time in the normal manner) of any bonus or pro rata
portion thereof, if any, to be treated as accrued by
a Continuing Employee in the discretion of the US
Vendor under (i) the BICC North American Management
Incentive Compensation Plan; (ii) the Special
Performance Award for Sales Group; (iii) the BICC
Cables Corporation Marshall Texas Gain Share Plan;
(iv) the ▇▇▇▇▇▇▇'▇ Incentive Bonus Plan; and (v) the
BICC Cables Corporation Discretionary Bonus Plan
attributable to the period ending on the Closing
Date; provided, however, that the US Purchaser's
total obligation under this Section 1.1.6 shall not
exceed the dollar amount of reserves booked by US
Vendor with respect to such programs including, to
the extent applicable, related payroll taxes. US
Vendor shall be responsible (as of the normal
determination date under the foregoing arrangements)
for determining the portion of such reserves if any,
to be treated as accrued for a Continuing Employee
for the period up to the Closing Date. US Purchaser
shall make payment in strict accordance with
the determination by US Vendor and shall not be
responsible for confirming the veracity of such
determination. In no event
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shall the total amounts payable by US Purchaser to
Continuing Employees under this paragraph 1.1.6
exceed the reserves booked with respect to such
obligations.
1.1.7 The US Purchaser will not assume responsibility,
obligations or liabilities relating to the following
Employee Benefit Arrangements:
(i) the BICC Cables Corporation Deferred
Compensation Plan;
(ii) the BICC Cables Corporation
Supplemental Executive Retirement
Plan;
(iii) the BICC Phantom Stock Plan;
(iv) the frozen Brintec Hourly Pension
Plan;
(v) the Brintec Supplemental Retirement
Plan; and
(vi) Miscellaneous one-on-one
arrangements for post- termination
or post-retirement medical benefits
and post- termination or
post-retirement life insurance
benefits listed in the attached
chart;
(vii) Post-Retirement Life Insurance for
Salaried Employees listed in
attached chart;
(viii) Medical Benefits and Life Insurance
for Employees who became disabled
prior to the Closing Date;
(ix) Employment Agreements for Employees
specifically designated in the
Employment Letter, in final form as
of the Closing Date, as not
receiving positions with the
Purchaser.
1.2 GENERAL CABLE SEVERANCE PLAN With respect to all Continuing Employees,
the US Purchaser agrees to enroll such employees in the General Cable
Severance Plan, and give credit for their service with the US Vendor
and any member of its controlled group for purposes of calculating
their benefits under the General Cable Severance Plan. The US Purchaser
also agrees to maintain the General Cables Severance Plan with respect
to Continuing Employees for a period of at least one year immediately
following the Closing Date.
1.3 PLANS OF US PURCHASER The US Purchaser hereby agrees that each
Continuing Employee as of the Closing Date shall be immediately
eligible to participate in the US Purchaser's
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Employee Benefit Arrangements on the same terms and conditions as
similarly situated employees of the US Purchaser.
1.4 PAST SERVICE CREDIT To the extent applicable with respect to Employee
Benefit Arrangements, maintained by the US Purchaser, Continuing
Employees (and their eligible dependents) shall be given credit for
their service with the US Vendor and any member of its controlled group
(i) for purposes of eligibility to participate and vesting (but not
benefit accrual except as described in Section 1.2); and (ii) for
purposes of satisfying any waiting periods, evidence of insurability
requirement, or the application of any pre-existing condition
limitation.
1.5 INDEMNIFICATION The US Vendor shall indemnify the US Purchaser against
all Losses incurred by the US Purchaser relating to or arising from (i)
any action or inaction by the US Vendor prior to the Closing Date in
breach of the law with respect to any Employee Benefit Arrangements
assumed by the US Purchaser; or (ii) breach of any post-closing
obligations of US Vendor under this Schedule 12. The US Purchaser shall
indemnify the US Vendor against all Losses arising on or after the
Closing Date relating to or arising from (i) any action or inaction in
breach of the law of the US Purchaser in connection with those Employee
Benefit Arrangements assumed by the US Purchaser pursuant to this
Schedule 12 and (ii) breach of any post-closing obligations of the
Purchaser under this Schedule 12.
2. CANADIAN EMPLOYEES
2.1 SALARIED PLAN
(a) The Canadian Purchaser shall adopt or amend, effective as of
the Closing, a pension plan and related fund (the CANADIAN
PURCHASER'S PENSION PLAN) which shall cover all the
Transferred Salaried Employees. The Canadian Purchaser's
Pension Plan as adopted and the benefits provided thereunder
shall be substantially the same in the aggregate as the
Salaried Plan. The Canadian Purchaser shall provide a
registered pension plan for the Transferred Salaried Employees
for a period of not less than 2 years after the Closing.
(b) The Canadian Purchaser's Pension Plan shall provide for (i)
accrued benefits, based on pensionable earnings and service as
of the Closing, for each Transferred Salaried Employee's
defined benefits under the Salaried Plan, and (ii) accrued
benefits, based on each Transferred Salaried Employee's
defined contribution account balance as of the Closing, for
such Transferred Salaried Employee's defined contribution
benefits under the Salaried Plan (such defined benefit accrued
benefits and defined contribution accrued benefits shall be
referred to herein as the DB BENEFITS and the DC BENEFITS,
respectively). Subject to applicable law, the DB Benefits and
DC Benefits shall be determined in accordance with the
provisions of the Salaried Plan.
(c)(i) The Canadian Vendor shall cause the transfer to the pension
fund for the Canadian Purchaser's Pension Plan of a pro rata
portion of assets (the DB TRANSFERRED
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AMOUNT) from the Salaried Plan funding media (the SALARIED
TRUST), such that the DB Transferred Amount bears the same
ratio to the total assets of the Salaried Plan as the going
concern actuarial liabilities of the Salaried Plan relating to
the DB Benefits as of the Closing, determined in accordance
with the summary of actuarial methods and assumptions annexed
hereto as Appendix 2.1(c)(i), applied in accordance with
generally accepted Canadian actuarial principles and all
applicable laws, as certified by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Limited
(CSA), actuaries for the Salaried Plan bears to the total
defined benefit going concern actuarial liabilities of the
Salaried Plan, determined on the same basis. The Canadian
Vendor shall make the details of these calculations and their
results, including individual results by plan member,
available to the Canadian Purchaser and its actuary (the CPA)
within 45 days after Closing for their review and
confirmation, and shall furnish to them such other information
and data, as may reasonably be required or requested to permit
a review, recalculation and confirmation of the DB Transferred
Amount, by the Canadian Purchaser and the CPA. The Canadian
Purchaser shall notify the Canadian Vendor within thirty (30)
days of receiving such information and data as to its
agreement or disagreement with the Canadian Vendor's
calculation of the DB Transferred Amount. Any dispute with
respect to such amount or payment shall be resolved pursuant
to Section 2.3 of this Schedule 12.
(ii) On Closing, the Canadian Vendor shall pay to the Canadian
Purchaser an amount equal to the difference between the DB
Transferred Amount (as estimated by CSA on the basis set forth
in Section 2.1(c)(i) above) and the amount necessary to ensure
that as of the Closing Date, all of the DB Liabilities are
fully funded on a going concern basis (as estimated by CSA on
the basis set forth in Section 2.1(c)(i) above). As soon as
practicable, but in any event within thirty (30) days after
final agreement is reached between the Canadian Vendor and the
Canadian Purchaser with respect to the amount of the DB
Transferred Amount, the amount of the payment pursuant to this
Section shall be adjusted based on a full actuarial valuation
of the Salaried Plan and the actual status of the Salaried
Plan as of Closing, in the manner set forth in Section
2.1(c)(i) above.
(iii) If the Superintendent of Financial Services of Ontario (the
SUPERINTENDENT ) requires an amount other than the DB
Transferred Amount to be transferred (the DB REGULATORY AMOUNT
), the parties agree that the DB Regulatory Amount shall be
the DB TRANSFERRED AMOUNT hereunder, subject to any rights of
appeal. In addition to the adjustments contemplated by Section
2.1(c)(ii) above, if the DB Transferred Amount (before
adjustment pursuant to the preceding sentence) is greater than
the DB Regulatory Amount, the Canadian Vendor shall pay the
amount of such difference to the Canadian Purchaser; if the DB
Transferred Amount (before adjustment pursuant to the
preceding sentence) is less than the DB Regulatory Amount, the
Canadian Purchaser shall pay the amount of such difference to
the Canadian Vendor, such payment to be made in either case on
the date specified in Section 2.1(f) of this Schedule 12.
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(iv) Subject to all applicable regulatory approvals, the Canadian
Vendor shall cause the transfer to the funding agent for the
Canadian Purchaser's Pension Plan (the CANADIAN PURCHASER'S
TRUST) from the Salaried Trust of each Transferred Salaried
Employee's DC Benefit account balance (the DC TRANSFERRED
AMOUNT) as at the date such transfer is completed in
accordance with the terms of the Salaried Plan. Such transfer
shall be made at the time set forth in Section 2.1(f) of this
Schedule 12.
(d) The Canadian Purchaser shall file an application for
registration of the Canadian Purchaser's Pension Plan or
amendment thereof, and the Canadian Vendor shall file
applications for approval of the transfer of funds from the
Salaried Trust into the Canadian Purchaser's Trust
contemplated hereunder, in each case with the Superintendent,
any other applicable pension regulatory authority and Revenue
Canada. The Canadian Purchaser and Canadian Vendor shall
diligently pursue their respective applications. The Canadian
Vendor shall diligently cooperate with the Canadian Purchaser
by amending the Salaried Plan and filing or otherwise
providing to the Canadian Purchaser any information required
with respect thereto and otherwise cooperate with the Canadian
Purchaser to the extent necessary to allow the Canadian
Purchaser to effect the registration of the Canadian
Purchaser's Pension Plan or amendment thereof.
(e) The Canadian Vendor shall, on behalf of the Canadian
Purchaser's Pension Plan and the Canadian Purchaser's Trust
but out of the Salaried Plan and the Salaried Trust, pay or
cause to be paid all benefits accrued to the Closing and
payable under the Canadian Purchaser's Pension Plan and
Canadian Purchaser's Trust with respect to the Transferred
Salaried Employees until the completion of the transfer of
funds to the Canadian Purchaser's Pension Plan and Canadian
Purchaser's Trust as contemplated herein.
(f) On the last day on which banks in Toronto are open for regular
banking business of the month in which the approval for the
transfer of assets contemplated in Section 2.1(d) of this
Schedule 12 is received or so soon thereafter as is
practicable (the TRANSFER DATE), the Canadian Vendor shall
cause to be transferred from the Salaried Trust to the
Canadian Purchaser's Trust, cash or assets with a value equal
to the DB Transferred Amount and the DC Transferred Amount. An
amount equal to the pro rata share attributed by the Canadian
Vendor, acting reasonably, to the DB Transferred Amount of
investment gains or losses shall be added to or deducted (as
applicable) from the DB Transferred Amount from the amount to
be transferred from the Salaried Trust to the Canadian
Purchaser's Trust hereunder, and there shall be deducted from
the DB Transferred Amount (i) the amount of any expenses
payable and not otherwise paid by the Canadian Purchaser in
accordance with Section 2.1(g) of this Schedule 12, and (ii)
the amount of any DB Benefits paid to Transferred Salaried
Employees out of the Salaried Plan and Salaried Trust during
such period in accordance with Section 2.1(e) of this Schedule
12. There shall be deducted from the DC Transferred Amount (i)
the amount of any expenses paid in accordance with Section
2.1(g) of this Schedule 12, and (ii) the amount of any DC
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Benefits paid to Transferred Salaried Employees out of the
Salaried Plan and Salaried Trust during such period in
accordance with Section 2.1(e) of this Schedule 12.
(g) The Canadian Vendor shall provide the Canadian Purchaser such
information and reports as Canadian Purchaser may reasonably
require in order to administer the Canadian Purchaser's
Pension Plan in respect of the Transferred Salaried Employees.
Canadian Purchaser shall pay the reasonable costs and expenses
necessary to provide such information and reports, by
deducting these amounts from the DB Transferred Amount and the
DC Transferred Amount or otherwise paying such amounts to the
Canadian Vendor.
2.2 HOURLY PENSION PLANS WITH RESPECT TO TRENTON, ST-▇▇▇▇▇▇ AND LA MALBAIE
LOCATIONS
(a) Effective on Closing, the Canadian Vendor shall assign to the
Canadian Purchaser, and the Canadian Purchaser shall assume,
the sponsorship and administration of, and all rights and
obligations of the Canadian Vendor under, the Hourly Pension
Plans and the Hourly Trust Agreements, with the effect that
following the Closing, the Canadian Purchaser will be the
administrator and sponsor of the Hourly Pension Plans and
related pension funds in place of the Canadian Vendor, and the
Canadian Vendor shall be relieved of all further obligations
in respect of the Hourly Pension Plans and the Hourly Trust
Agreements. The Canadian Vendor and the Canadian Purchaser
shall cooperate in making such amendments to the Hourly
Pension Plans and making such filings with Revenue Canada and
the pension benefits regulatory authorities applicable to the
Hourly Pension Plans are entering into such arrangements with
the trustees of the Hourly Pension Plans, in each case as may
be necessary or desirable to effect the assignment and
assumption contemplated by this Section 2.2 of this Schedule
12. The Canadian Purchaser shall become the administrator of
the Hourly Pension Plans only upon the assignment to the
Canadian Purchaser by the Canadian Vendor of the rights and
obligations of the Canadian Vendor under the Hourly Trust
Agreements, including, without limitation, all of the Canadian
Vendor's rights in respect of the assets held in each of the
Hourly Trust Agreements, except that, with effect from the
Closing Date, the Canadian Purchaser shall administer each of
the Hourly Plans as agent for the Canadian Vendor.
(b) On Closing, the Canadian Vendor shall pay to the Canadian
Purchaser an amount equal to the difference between the value
of assets in the Hourly Plans as of the Closing Date (as
estimated by CSA) and the amount necessary to ensure that, as
of the Closing Date, all of the liabilities of the Hourly
Plans are fully funded on a going concern basis (as estimated
by CSA on the basis set forth below). As soon as practicable,
and in any event within thirty (30) days after the Closing
Date, the Canadian Vendor shall update the pension records of
all of the members of the Hourly Pension Plans up to the
Closing Date, and shall determine, within forty-five (45) days
after the Closing Date, the estimated going concern
liabilities for each of the LaMalbaie Plan (the LAMALBAIE PLAN
LIABILITIES), the St. ▇▇▇▇▇▇ Plan (the ST.
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▇▇▇▇▇▇ PLAN LIABILITIES) and the Pyrotenax Plan (the PYROTENAX
PLAN LIABILITIES, all calculated in accordance with the
actuarial methods and assumptions set out in Appendix
2.1(c)(i) applied in accordance with generally accepted
Canadian actuarial principles and all Applicable Laws and
shall determine the estimated value of the assets of each of
the La Malbaie Plan (the LA MALBAIE PLAN ASSETS), the St.
▇▇▇▇▇▇ Plan (the ST. ▇▇▇▇▇▇ PLAN ASSETS) and the Pyrotenax
Plan (the PYROTENAX PLAN ASSETS). The Canadian Vendor shall
make the details of these calculations and their results,
including individual results by plan member, available to the
Canadian Purchaser and the CPA for their review and
confirmation, and shall furnish to them such other information
and data, as may reasonably be required or requested to permit
a review, recalculation and confirmation of the LaMalbaie Plan
Liabilities, the St. ▇▇▇▇▇▇ Plan Liabilities and the Pyrotenax
Plan Liabilities, as well as the LaMalbaie Plan Assets, the
St. ▇▇▇▇▇▇ Plan Assets and the Pyrotenax Assets. The Canadian
Purchaser shall notify the Canadian Vendor within thirty (30)
days of receiving such information and data as to its
agreement or disagreement with the Canadian Vendor's
calculation of the LaMalbaie Plan Liabilities, the St. ▇▇▇▇▇▇
Plan Liabilities and the Pyrotenax Plan Liabilities, as well
as the LaMalbaie Plan Assets, the St. ▇▇▇▇▇▇ Plan Assets and
the Pyrotenax Assets. Any dispute shall be resolved pursuant
to Section 2.3 of this Schedule 12.
(c) As soon as practicable, but in any event within thirty (30)
days after final agreement is reached between the Canadian
Vendor and the Canadian Purchaser with respect to the amount
of the LaMalbaie Plan Liabilities, the St. ▇▇▇▇▇▇ Plan
Liabilities and the Pyrotenax Plan Liabilities, as well as the
LaMalbaie Plan Assets, the St. ▇▇▇▇▇▇ Plan Assets and the
Pyrotenax Assets, the Canadian Vendor shall pay to the
Canadian Purchaser an amount equal to the amount necessary to
ensure that, as at the Closing Date, all of the Hourly Pension
Plans are fully funded on an ongoing basis, on the basis set
forth in Appendix 2.1(c)(i).
(d) The Canadian Purchaser (as agent for the Canadian Vendor)
agrees to administer the Hourly Pension Plans until the date
on which the rights and obligations of the Canadian Vendor
under each of the Hourly Pension Plans and associated trust
agreements, including all of the Canadian Vendor's rights in
respect of the assets held in the trust funds, are assigned to
the Canadian Purchaser (the HOURLY PENSION PLAN ASSIGNMENT
DATE) in the same manner as it is being administered at the
Closing Date but for the account of, and at the expense of,
either the trust fund for the applicable Hourly Plan (subject
to any Applicable Law) or, where such charge to the trust fund
is not permitted by Applicable Law, the Canadian Purchaser.
Until the Hourly Pension Plans Assignment Date and subject to
any other agreements between the Canadian Vendor and the
Canadian Purchaser, the Canadian Purchaser (as agent of the
Canadian Vendor) shall receive and deposit contributions, if
any, by the Canadian Purchaser and the participants in the
Hourly Plans to the trust funds therefor. Until the Hourly
Pension Plans Assignment Date, the assets held in the trust
funds for the Hourly Plans shall be invested under the
supervision of the Canadian Purchaser (as agent of the
Canadian Vendor), by the
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trustee of the trust fund for each of the Hourly Plans, who
will act with reasonable diligence and prudence and in good
faith in so doing.
(e) As soon as practicable after the Closing Date, the Canadian
Vendor shall provide to the Canadian Purchaser such
information and records, and access to such personnel, as may
reasonably be required to administer the Hourly Plans, to the
extent that such information and records are not then in the
possession of the Canadian Purchaser or any of its authorized
representatives.
(f) All statutory and regulatory administration reporting, filing
and disclosure requirements applicable to the Hourly Pension
Plans in respect of the plan years ending prior to the Closing
Date shall remain the responsibility of the Canadian Vendor,
and all such requirements applicable in respect of plan years
ending on or after the Closing Date shall be the
responsibility of the Canadian Purchaser.
2.3 DISPUTE RESOLUTION
If CSA and CPA are unable to agree on the DB Transferred Amount, or the
Canadian Purchaser and the Canadian Vendor are unable to agree on any
amount or calculation pursuant to Sections 2.1 or 2.2 of this Schedule
12, their differences shall be resolved by a third independent actuary
selected by CSA and CPA, and the expense of such independent actuary
shall be paid one half by the Canadian Vendor and one half by the
Canadian Purchaser. In certifying , verifying or reviewing the DB
Transferred Amount or the amounts payable pursuant to Sections
2.1(c)(ii) and 2.2(c) of this Schedule 12, the actuaries referred to
herein shall have no responsibility, obligation or right to change the
methods, assumptions or any other term or condition of the summary of
actuarial methods and assumptions annexed hereto as Appendix 2.1(c)(i),
it being understood and agreed that the duties requested of such
actuaries shall be solely to calculate and otherwise determine such
amounts in a manner consistent with Appendix 2.1(c)(i), this Schedule
12, generally accepted Canadian actuarial principles and all applicable
law.
2.4 BENEFIT PLANS FOR TRANSFERRED EMPLOYEES
With effect from the Closing Date, the Canadian Purchaser shall
establish or otherwise provide benefit plans for the Transferred
Employees consisting of life insurance, medical, dental, accident,
disability and other benefits that are substantially similar, in the
aggregate, to those offered as of the Closing by the Canadian Vendor to
the Transferred Employees and all eligible persons claiming through
them. The Canadian Vendor shall remain liable for all obligations for
claims in respect of which the event giving rise to the claim occurred
prior to the Closing Date.
2.5 GROUP RRSP - TRANSFERRED EMPLOYEES
With effect from the Closing Date, the Canadian Purchaser shall
establish or otherwise provide a group registered retirement savings
plan upon substantially similar terms, in the aggregate, to the BICC
Group RRSP.
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2.6 COMPLIANCE WITH COLLECTIVE AGREEMENTS
The Canadian Purchaser shall ensure that all pension and benefits
arrangements established or maintained by it comply with the terms of
each applicable collective agreement affecting the Transferred
Employees and the Former Employees - Continuing Operations.
2.7 CONTINUOUS SERVICE
For the purposes of the Canadian Purchaser's Plans, service of a
Transferred Employee with the Canadian Vendor and membership in any of
the Canadian Vendor's Plans shall be deemed to be service with the
Canadian Purchaser and membership in the corresponding Canadian
Purchaser's Plan and as if the Canadian Purchaser's Plans were
continuations of the Canadian Vendor's Plans.
2.8 NO ASSUMPTION OF LIABILITIES
The Canadian Vendor and the Canadian Purchaser agree and confirm that
the Canadian Purchaser is not assuming nor will it have any liability
for; any Employee Benefit Arrangement of the Canadian Vendor unless
expressly set forth in this Schedule 12.
2.9 TRANSFERRED EMPLOYEES PERFORMING SERVICES FOR THE CANADIAN VENDOR
The Canadian Purchaser shall make available to the Canadian Vendor the
services of the Transferred Employees named in Appendix 2.9. The
Canadian Vendor and the Canadian Purchaser will enter into a services
contract relating to such employees pursuant to which the Canadian
Vendor will agree to reimburse the Canadian Purchaser for the salary
and all pension and non-pension benefits paid and any other reasonable
expenses incurred by the Canadian Purchaser with respect to such
employees on similar terms to those currently applicable to such
persons, together with applicable taxes.
2.10 RELATED DEFINITIONS
For the purpose of this Section 2 of this Schedule 12, the terms set
forth below shall have the meanings specified below.
Canadian Purchaser's Plans: the pension and benefit plans and arrangements required to be
established or maintained by the Canadian Purchaser pursuant to
Section 2 of this Schedule 12.
Canadian Vendor's Plans: the Employee Benefit Arrangements in which the Canadian Vendor
has entered into, participate, or has liability for.
Former Employee: each person who (a) at any time prior to the Closing Date was an
employee of the Canadian Vendor, and (b) remains entitled as of the
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Closing Date to any benefits under the Canadian Vendor's Plans in
respect of his or her employment with the Canadian Vendor.
Hourly Pension Plans: The Pension Plan for Hourly Paid Employees of BICC Cables Canada
Inc. at its St. ▇▇▇▇▇▇ Factory (Quebec Registration No. 25587),
Pension Plan for Hourly Employees of Pyrotenax of Canada Limited,
a Division of BICC Cables Canada Inc. (FSCO Registration No.
05211406) and Pension Plan for Unionized Employees of BICC
Cables Canada Inc. located at LaMalbaie Quebec (Quebec
Registration No. 31236).
Hourly Trust Agreements: the trust agreements relating to the pension funds for the Hourly
Pension Plans.
Salaried Plan: The Employees' Pension Plan of BICC Cables Canada Inc. (FSCO
Registration No. 0293761).
Transferred Employee: those employees of the Canadian Vendor who will continue as
employees of the Canadian Purchaser after Closing but, for greater
certainty, does not include any Former Employee.
Transferred Salaried
Employee: each Transferred Employee who as of the Closing Date is a member
of or is satisfying the criteria for membership of the Salaried Plan, and
each Former Employee or Employee who is not a Transferred
Employee but who as of the Closing Date is a member or former
member of or is satisfying the criteria for membership of the defined
contribution portion of the Salaried Plan.
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Appendix 2.9
to Schedule 12
▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ Wisteand
▇▇▇▇▇▇▇▇▇ De Lauretis
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ Dworaczek
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APPENDIX 2.1(c)(i)
------------------
TO SCHEDULE 12
BICC CABLES CANADA INC.
SUMMARY OF ACTUARIAL ASSUMPTIONS
FOR FUNDING PURPOSES
AS AT APRIL 6, 1999
ACTUARIAL PLAN
ASSUMPTIONS --------------------------------------------------------------------------------------
(PROVINCIAL EMPLOYEES ST. ▇▇▇▇▇▇ PYROTENAX LA MALBAIE
REGISTRATION) (ONTARIO) HOURLY HOURLY (QUEBEC)
(QUEBEC) (ONTARIO)
--------------------------------------------------------------------------------------------------------------------------
GOING CONCERN BASIS
--------------------------------------------------------------------------------------------------------------------------
ECONOMIC ASSUMPTIONS:
--------------------------------------------------------------------------------------------------------------------------
- Investment Return 7.5% 7.5% 7.5% 7.5%
- Increase in 7.0% None None None
Earnings
- Increase in YMPE 6.5% None None None
- Expenses None None None None
- Increase in None None None None
Revenue Canada
Maximum
- Indexing None None None None
--------------------------------------------------------------------------------------------------------------------------
DEMOGRAPHIC ASSUMPTIONS:
--------------------------------------------------------------------------------------------------------------------------
- Retirement Age - 50% retire at 25% at min. age 25% at min. Age 63
age 63 and of entitlement to age of
50% retire at an unreduced entitlement to
age 64 pension and an unreduced
75% at age 65 pension and
- Executives 75% at age 65
retire at age 62
- Termination Ontario Light Ontario Light Ontario Light Ontario Light
truncated at truncated at truncated at truncated at
age 55 age 56 age 55 age 55
- Morality GAM83 GAM83 GAM83 GAM83
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135
ACTUARIAL PLAN
ASSUMPTIONS --------------------------------------------------------------------------------------
(PROVINCIAL EMPLOYEES ST. ▇▇▇▇▇▇ PYROTENAX LA MALBAIE
REGISTRATION) (ONTARIO) HOURLY HOURLY (QUEBEC)
(QUEBEC) (ONTARIO)
--------------------------------------------------------------------------------------------------------------------------
- Disability None except that None None None
current disabled
members
assumed not to
return to actives
- Family 100% of plan None None None
Composition members are
married and male
partner is 3 years
older than female
--------------------------------------------------------------------------------------------------------------------------
SOLVENCY BASIS
--------------------------------------------------------------------------------------------------------------------------
- Investment Return 5.75% for 15 years, 6% thereafter for March 99 valuation
- Increases in
Earnings None
--------------------------------------------------------------------------------------------------------------------------
Otherwise as above except as required by specified provincial pension legislation.
--------------------------------------------------------------------------------------------------------------------------
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SCHEDULE 13
[INTENTIONALLY LEFT BLANK]
133
137
SCHEDULE 14
[INTENTIONALLY LEFT BLANK]
134
138
SCHEDULE 15
INTELLECTUAL PROPERTY
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139
The Vendors' Intellectual Property is being sold, transferred and assigned
pursuant to the Assets Sale and Purchase Agreement, dated April 6, 1999, and
such sale, transfer and assignment is subject to the provisions of the license
agreements to which the Vendors or either of them is a party.
List of patents, registered designs and registered trade marks and applications
therefor
Status
(Reg/ Application
Title Country Pending) Number Title Holder of Record
---------------------------- ---------------------- --------------------------- ------------------- ------------------------
Low-ash Blacks CA Pending BICC Cables Corporation
US Pending 08/217116 BICC Cables Corporation
Metallic constant watt BR Granted 8700141 Pyrotenax of Canada Ltd.
CA Granted 527383 Pyrotenax of Canada Ltd.
FR Granted 8700406 Pyrotenax of Canada Ltd.
GB Granted 8700888 Pyrotenax of Canada Ltd.
US Granted 06/946761 Pyrotenax of Canada Ltd.
ARMORKOTE US Registered 74/099682 BICC Cables Corporation
CABLEC US Registered 73/524225 BICC Cables Corporation
CDC US Registered 72/164557 BICC Cables Corporation
CONOPTICS US Registered 71/299827 BICC Cables Corporation
DURALOX US Registered 72/021357 BICC Cables Corporation
DURASHEATH US Registered 71/612941 BICC Cables Corporation
FLAME-GUARD US Registered 73/026995 BICC Cables Corporation
HOT SPOT US Registered 74/142400 BICC Cables Corporation
Cablec Continental Cables
INTEGRAFLAME US Registered 73/794406 Corporation
LOOSE PACK US Registered 74/299830 BICC Cables Corporation
ACID FLAMECHECK &
design US Registered 73/579401 ▇▇▇▇▇▇▇▇ Cables Ltd.
PLENUM FLEX 90 US Registered 74/276207 BICC Cables Corporation
ARCTIC-FLEX US Registered 74/664828 BICC Cables Corporation
POLYRAD US Registered 73/066819 BICC Cables Corporation
PPP US Registered 73/564594 BICC Cables Corporation
PRECON US Registered 72/352665 BICC Cables Corporation
STRANDFILL US Registered 73/547526 BICC Cables Corporation
T-2 US Registered 73/268684 BICC Cables Corporation
THRMOLENE US Registered 72/164556 BICC Cables Corporation
UNI BLEND US Registered 72/150841 BICC Cables Corporation
UNICON US Registered 70/218170 BICC Cables Corporation
UNISHIELD US Registered 72/333516 BICC Cables Corporation
ACID-FLAME-CHECK CA Registered 546613 BICC ▇▇▇▇▇▇▇▇ Inc.
CARQUAD CA Registered 351153 BICC ▇▇▇▇▇▇▇▇ Inc.
CELSEAL CA Registered 357092 BICC ▇▇▇▇▇▇▇▇ Inc.
DEVILEAD CA Registered 585076 BICC ▇▇▇▇▇▇▇▇ Inc.
DEVILEAD US Registered 73/697713 Philips Cables Ltd.
DEVILENE US Registered 73/697712 Philips Cables Ltd.
DEVILENE CA Registered 585075 BICC ▇▇▇▇▇▇▇▇ Inc.
DEVILENE US Registered 73/716226 Philips Cables Ltd.
DEVILENE FR Registered 929456 Philips Cables Ltd.
DEVILENE CA Registered 397207 BICC ▇▇▇▇▇▇▇▇ Inc.
EPD CA Registered 679929 BICC ▇▇▇▇▇▇▇▇ Inc.
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-------------------------- ---------------------- ------------------- --------------------- ---------------------------------
Status
(Reg/ Application
Title Country Pending) Number Title Holder of Record
-------------------------- ---------------------- ------------------- --------------------- ---------------------------------
EPN CA Registered 679933 BICC ▇▇▇▇▇▇▇▇ Inc.
FLAMBICC CA Registered TMA602049 BICC Cables Corporation
FLEXFORM CA Registered 358936 BICC ▇▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇-▇▇ CA Registered 143839 BICC ▇▇▇▇▇▇▇▇ Inc.
NORFLAME CA Registered 394208 BICC ▇▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇▇ ACID
FLAMECHECK US Registered 73/633111 Philips Cables Ltd.
▇▇▇▇▇▇▇▇ CABLES US Registered 74/996026 Philips Cables Ltd.
PHILPLEX CA Registered 253944 BICC ▇▇▇▇▇▇▇▇ Inc.
PHILSHEATH US Registered 73/1572491 Philips Cables Ltd.
PHILSYM CA Registered 351151 BICC ▇▇▇▇▇▇▇▇ Inc.
PORTAFLEX CA Registered 511037 BICC ▇▇▇▇▇▇▇▇ Inc.
REELFREE and design CA Registered 504934 BICC ▇▇▇▇▇▇▇▇ Inc.
STALCELL CA Registered 351152 BICC ▇▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇▇▇ CA Pending 775735 BICC Cables Corporation
THERMALENE CA Registered 329871 BICC ▇▇▇▇▇▇▇▇ Inc.
VERTITECK US Registered 73/622383 ▇▇▇▇▇▇▇▇ Cables Limited
VERTITECK CA Registered 560038 BICC ▇▇▇▇▇▇▇▇ Inc.
PORTAFLEX PLUS CA Registered 725957 BICC ▇▇▇▇▇▇▇▇ Inc.
PY-TRACE CA Registered 532311 BICC Cables Canada Inc.
PYROPAK CA Registered 242249 Pyrotenax of Canada Ltd.
PYROTRACE CA Registered 468279 BICC Cables Canada Inc.
SLOT-LOK CA Registered 350461 Pyrotenax of Canada Ltd.
PYROTRACE US Registered 73/342608 Pyrotenax USA Ltd.
Licenses of Vendors' Intangible Intellectual Property and Vendors' Know-How
Other Party Subject Agreement Type
----------- ------- --------------
BP Chemicals Ltd. Dual Layer Strippable Screens Licence Agreement
General Electric Company Insulated Power and Control Technology and Patent Licence
Cables Agreements
Essex Group Inc. Transmission, Distribution and Licence Agreement
Control Cables
BP Performance Polymers, Inc. Water Tree Retardant XPLE Sublicence Agreement
Compound
Dow Chemical Company Medium Voltage Cable Collaboration Agreement
Insulation
BICC Plc/Cablec Corporation Joint Research Technical Collaboration
Agreement
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141
Material computer software license agreements (excluding shrink-wrap licenses)
Vendors
-------
Axiox
Candle (03611)
Omegamon/CICS
Omegamon/MVS
Client Soft
Pilot
Comet/CICS (Techologic)
Computer Associates (01236)
Corporate Tie
CJB's group
Compu ▇▇▇▇ (03277)
XPEDITRER/CICS
File Aid
Corporate Software & Tech.
Decision One Corp.
Design Consultants, Inc.
Geac Computer Systems
AMAPS
A/P
A/R
O/P
IBM (52422)
Information Access
Computer Select Library
Innovation
FDR/ABR/COMPAKTOR
Intel
Levi, Ray, Shoup, Inc. (03744)
VTAM Printer
VMCF/VTAM
▇▇▇ ▇▇▇▇▇▇ Systems (04112)
Microsoft Select/Office 97
Monarch Bay Software, Inc.
Professional Network Services
Scheduling (00157)
OPT Software Maintenance
Sterling
DYI/280
Support Magic
Syncsort, Inc. (00525)
Syncsort MVS
Sysdata (00630)
Mufmon
Taxware International (00166)
Technologic Software
Vanguard
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142
Other Material Intellectual Property Agreements
Other Party Title Type Unit
----------- ----- ---- ----
Cabot Corporation Carbon Blacks Collaboration BICC Cables
Agreement Corporation
BP Performance Sheathing Materials Secrecy Agreement BICC Cables
Polymers Inc. Corporation
Polytechnic University Halogen Free Low Fire Sponsored BICC Cables
of Brooklyn Hazard Cable Development Work Corporation,
Agreement Indianapolis Technical
Center
Sheffield University Bonding of Different Sponsored BICC Cables
Flexible Polyer Development Work Corporation,
Compositions Agreement Indianapolis Technical
Center
University of Montreal Modelling of Two Layer Sponsored BICC Cables
Die Flow Development Work Corporation,
Agreement Indianapolis Technical
Center
Cornell University Nanocomposite Draft Sponsored BICC Cables
Structures in Polyolefin Development Work Corporation,
Insulations Agreement Indianapolis Technical
Center
1. Sublicense Agreement between Dow Chemical Corporation and Dow Chemical
Canada, Inc. ("Dow" or "Licensor") and BICC Cables Corporation
("Licensee") effective June 12, 1996 as amended.
2. Water Tree Retardant XLPE Compound License Agreement between Sumitomo
Electric Industries, Ltd. ("Licensor") and Cablec Corporation ("Licensee")
dated July 15, 1986.
3. Compound Licence Agreement between Sumitomo Electric Industries, Ltd.
("Licensor") and Cablec Corporation ("Licensee") dated July 15, 1986.
4. Moisture Barrier Technology License Agreement between Sumitomo Electric
Industries, Ltd. ("Licensor") and Cablec Corporation ("Licensee") dated
July 15, 1986.
5. Welded Sheath License Agreement between Sumitomo Electric Industries, Ltd.
("Licensor") and Cablec Corporation ("Licensee") dated July 15, 1986.
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143
Schedule 15A
Exhibit A to Schedule 15
Form of Assignment
COPYRIGHT ASSIGNMENT
THIS COPYRIGHT ASSIGNMENT is made this ____ day of _______, 19__ by
_________________________, a ________ corporation ("Assignor").
WHEREAS, Assignor has entered into an Assets Sale and Purchase
Agreement, dated April 6, 1999 (the "Agreement") among Assignor,
_____________________ ("Assignee"), a ________ corporation, and certain other
parties pursuant to which Assignor has agreed to sell and Assignee has agreed to
purchase certain Proprietary Rights (as defined in Section ____ of the
Agreement); and
WHEREAS, Assignor is willing in connection with certain transactions
being consummated on the date hereof to assign to Assignee all of Assignor's
right, title and interest in and to those certain copyrights, U.S. and foreign
copyright registrations, and applications for registration listed on Schedule A
attached hereto (collectively, "Copyrights"); and
WHEREAS, Assignee desires to acquire all of Assignor's right, title and
interest in, to and under said Copyrights.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor has sold, assigned,
transferred and set over, and does hereby grant and exclusively assign to
Assignee its successors, legal representatives and assigns, all of Assignor's
right, title and interest in and to the Copyrights, including rights to apply
for copyright or other protection, to existing copyrights, to renewals and
extensions, all rights to print, to publish, to reproduce, to prepare derivative
works, to distribute copies of the Copyrights by sale, rental, lease, lending or
other transfer of ownership, to publicly perform and to publicly display the
Copyrights in all countries of the world, including the United States of
America, and all of its territories and any rights and causes of action for
copyright infringement, royalties and proceeds heretofore accrued.
All rights in the Copyrights and all derivative works granted to an
author under the copyright laws of the United States, foreign countries, and
international copyright conventions and the right to grant these rights or any
part of them to third parties are hereby assigned by Assignor to Assignee.
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144
Assignor hereby requests the Commissioner of Copyrights to record
Assignee, as assignee of the U.S. copyright registrations and applications for
registration listed on Schedule A, for the sole use and enjoyment of Assignee,
its successors, legal representatives and assigns.
_____________________________
By:_______________________________
[Name]___________, Title
STATE OF __________ )
) SS.
COUNTY OF ________ )
The foregoing assignment was acknowledged before me on this ___ day of
_______, 19__, by ________________ of _____________________, a ________
Corporation, on behalf of the corporation.
____________________________________
NOTARY PUBLIC
My Commission Expires:_____________
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PATENT ASSIGNMENT
THIS PATENT ASSIGNMENT is made this ____ day of _______, 19__ by
_________________________, a ________ corporation ("Assignor").
WHEREAS, Assignor has entered into an Assets Sale and Purchase
Agreement, dated April 6, 1999 (the "Agreement") among Assignor,
_____________________ ("Assignee"), a_________ corporation and certain other
parties, pursuant to which Assignor has agreed to sell and Assignee has agreed
to purchase certain Proprietary Rights (as defined in Section ____ of the
Agreement); and
WHEREAS, Assignor is willing in connection with certain transactions
being consummated on the date hereof to assign to Assignee all of Assignor's
right, title and interest in and to: (1) all U.S. patents and patent
applications listed on Schedule attached hereto; and (2) all foreign patents and
patent applications listed on Schedule attached hereto (collectively,
"Patents"); and
WHEREAS, Assignee desires to acquire all of Assignor's right, title and
interest in, to and under said Patents.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor has sold, assigned,
transferred and set over, and does hereby sell, assign, transfer and set over,
unto the said Assignee, its successors, legal representatives and assigns, all
of Assignor's right, title and interest in, to and under the Patents and all
divisions, renewals and continuations thereof, and all Letters Patent of the
United States which may be granted thereon and all reissues and extensions
thereof (including, without limitation, all proceeds thereof and the rights to
▇▇▇ for past, present and future infringements), and all applications for
Letters Patent which may hereafter be filed for said Patents in any country or
countries foreign to the United States, and all Letters Patent which may be
granted for said Patents in any country or countries foreign to the United
States hereby authorized, and requests the Commissioner of Patents of the United
States, and any Official of any country or countries foreign to the United
States, whose duty it is to issue patents on applications as aforesaid, to
record Assignee as the owner of all such Patents and issue all Letter Patent for
said Patents to the said Assignee, as assignee of the patent applications listed
on Schedule and Schedule hereto, for the sole use of Assignee, its successors,
legal representatives and assigns, in accordance with the terms of this
instrument.
Assignor hereby requests the Commissioner of Patents and Trademarks to
record Assignee, as assignee of the U.S. Patents and Patent Applications listed
on Schedule for the sole use and engagement of the Assignee, its successors,
legal representatives and assigns.
_____________________________
By:_______________________________
[Name]__________, Title
STATE OF __________ )
) SS.
COUNTY OF ________ )
The foregoing assignment was acknowledged before me on this ___ day of
_______, ____, by ___________________________________, a ________ Corporation,
on behalf of the corporation.
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146
___________________________________
NOTARY PUBLIC
My Commission Expires:_____________
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TRADEMARK AND TRADE NAME ASSIGNMENT
THIS TRADEMARK AND TRADE NAME ASSIGNMENT (the "Assignment") is made as
of this ___ day of _________, ____, by and between _______________, a ________
corporation ("_________"), with its principal office at ___________________,
___________, ________, and ______________________________, a ________
corporation ("__________") and a wholly-owned subsidiary of
_________________________, with its principal office at ______________, ______,
__________.
WHEREAS, _________________ and __________________ are parties to that
certain Asset Purchase Agreement, dated as of ___________, pursuant to which
_________ has agreed to sell and ________________________ has agreed to purchase
certain Assets (as defined in the Asset Purchase Agreement) including, without
limitation, the United States and foreign trademark registrations identified and
set forth on Schedule A attached hereto and incorporated herewith (collectively,
the "Marks"), the unregistered trademarks and the trade names identified and set
forth on Schedule B, attached hereto and incorporated herewith (collectively,
the "Trade Names"), and the goodwill of the business associated therewith; and
WHEREAS, ______________________ wishes to acquire _______________'s
entire right, title and interest in and to the Marks, title and interest in and
to the Marks and the Trade Names, together with the goodwill of the business in
connection with which the Marks and the Trade Names are used;
NOW THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, _______ does hereby sell and assign to ________
all the right, title and interest ______________ has or may have in the Marks
and Trade Names and in any and all other marks or names owned or used by
__________ or in which ____________ otherwise has any ownership interest and
which include the listed terms of said Marks and/or Trade Names alone or in
combination with other words, figures, designs or indicia, including any rights,
title and interest as service marks, trademarks, tradenames and all common law
rights connected therewith, together with the goodwill of the business with
respect to which the Marks and Trade Names or any such other marks or names have
been used and/or registered and all claims and causes of action relating to
infringement of said Marks and Trade Names or said other marks or name.
___________ will assist in obtaining or providing any further documents
which may be required to confirm chain or title thereto.
Signed at __________________ this ______ day of ___________________,
19___.
_______________________________________
By:___________________________________
Title:____________________________
______________________________________
By: __________________________________
Title: __________________________
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Schedule 16
Environment
1 Definitions
For the purpose of the Agreement and this Schedule and the following
terms shall have the following meanings:
Agreed Proportion means that proportion of any Environmental Loss which
the parties have agreed that the Vendors shall bear in Section 5.1 of
this Schedule 16.
Agreed Remedial Action Plan means the initial program of work set out
in Exhibit 16A to this Schedule 16 agreed between the Vendors and the
Purchasers and as amended at Closing.
Environmental Condition means any contamination or any condition
existing prior to the Closing Date with respect to surface soil,
subsurface soil, ambient air, surface waters, groundwaters, leachate,
run- on or run-off, stream or other sediments, on, in, under, above or
off the Vendor-Owned Real Properties or Leased Properties, which
conditions cause or consist of a violation of and/or liability under
applicable Environmental Laws or Environmental Permits and require
investigation and/or remedial or corrective action on or off any
Vendor-Owned Real Properties or Leased Properties by Vendors or other
owner of the Vendor-Owned Real Properties or Leased Properties under
applicable Environmental Laws or Environmental Permits and/or results
in claims, demands, orders, directives, judgments or liabilities
against Purchasers by third persons, including Environmental
Governmental Authorities.
Environmental Laws means any applicable law, by-law, regulation, code,
ordinance, license, permit, order, judgment, decree or injunction
promulgated by any Environmental Governmental Authority (A) for the
protection of health, safety, including worker health and safety or the
environment, (including air, water, soil, and natural resources) or (B)
regulating Hazardous Substances, in each case as presently in effect
and presently enforced in the relevant jurisdiction as of and including
at Closing.
Environmental Liability means any and all Liabilities arising under
Environmental Laws in connection with or relating to (i) the operation
of any of the Operations or any part thereof before Closing, (ii) the
occupation of the Vendor-Owned Real Properties or Leased Properties or
any part thereof by the Vendors or any other persons or entities before
Closing (including liability under Environmental Law to undertake
Remedial Action), (iii) the breach of any Environmental Warranty, or
(iv) any Environmental Condition.
Environmental Permit means any licenses, certificates, permits,
directives, requirements, registrations, government approvals,
agreements, authorizations, exemptions and consents which are required
under or are issued pursuant to an Environmental Law or are otherwise
required by Environmental Governmental Authorities for the operation of
any of the Operations, the Vendor-Owned Real Properties or the Leased
Properties on or before Closing.
Environmental Proceedings means:
(a) any civil, criminal, administrative or regulatory suit or
proceeding;
(b) any arbitration or dispute resolution procedure;
(c) any investigation undertaken by or on behalf of an
Environmental Governmental Authority under Environmental Law
pursuant to which the Environmental Governmental Authority may
order enforcement action or undertake or compel Remedial
Action; and
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149
(d) any court order, or any statutory or legislative notice or
written notification issued by a Environmental Governmental
Authority which determines or relates to liability under or a
violation of any Environmental Law, assesses any civil,
regulatory or criminal penalty, prohibits or imposes
restrictions upon the Operations, the Vendor-Owned Real
Properties or the Leased Properties or which requires action
to be taken, Operations to be modified or Remedial Action to
be undertaken, relating to, concerning or affecting any
Environmental Liability.
Environmental Warranties means the Warranties at Section 2 of this
Schedule 16.
Environmental Governmental Authority shall mean any US or Canadian
agency, commission, department or body of any municipal, township,
county, local, state, provincial or Federal governmental or
quasi-governmental regulatory unit, entity or authority having
jurisdiction or authority over any matter arising under Environmental
Laws.
Hazardous Substances means any pollutant, contaminant, waste, chemical,
material or substance listed, defined, designated, classified or
regulated as dangerous, special, hazardous, toxic or radioactive and
any similar terms, under any applicable Environmental Law including
petroleum and any derivative or by-product thereof.
Operational Expenditure means in respect of any of the Operations any
expenditure to the extent that after Closing it is incurred or is
properly incurrable in the ordinary course of business of any of the
Operations, as part of routine maintenance and upkeep of any works,
plant, equipment and/or buildings and/or their services or to overcome
fair wear and tear of such works, plant, equipment and/or buildings
and/or their services or to ensure that such works, plant, equipment
and/or buildings and/or their services remain in compliance with
Environmental Laws after Closing but shall exclude any future
expenditure arising or incurred by the Purchasers after Closing with
respect to any works required to bring any plant, facility, building,
property, equipment, or services into compliance with or satisfy the
requirements of Environmental Laws which were non-compliant on the
Closing Date.
Qualified Consulting Firm shall mean a nationally or regionally
recognized environmental engineering and/or consulting firm. By way of
example, the parties hereby specifically recognize ▇▇▇▇ ▇▇▇▇▇▇ Group,
ERM-Northeast, Pilko & Associates, Roux Associates, Inc., Dames & ▇▇▇▇▇
and ▇▇▇▇▇▇ Services and QST as such firms.
Remedial Action means any works necessary to investigate, assess,
monitor, remove, ▇▇▇▇▇, close, mitigate, treat, remediate, ameliorate
and/or contain any matter in accordance with Environmental Laws and
includes any period of post-closure or remediation monitoring and any
operation and maintenance relating to such remedial activities.
2 Environmental Warranties
Except as disclosed in the Disclosure Letter:
2.1 The Operations and the Vendor-Owned Real Properties are in
compliance in all material respects with all applicable
Environmental Laws and Environmental Permits and, so far as
the Vendors are aware, have been since January 1, 1998.
2.2 The Vendors have not received any written notice from any
Environmental Governmental Authority or other third party
alleging the violation of or liability under any applicable
Environmental Laws other than for matters that have been fully
and finally resolved prior to the Closing Date.
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2.3 There are no suits, actions, proceedings, Environmental
Proceedings, demands, notices or other claims, either pending
or to the Vendors' knowledge threatened, against the Canadian
Business or the US Business regarding any actual, potential or
alleged liability or obligation under or violation of any
applicable Environmental Laws with respect to the Operations,
the Vendor-Owned Real Properties or the Leased Properties.
2.4 So far as the Vendors are aware, the Canadian Business and US
Business (i) have all Environmental Permits necessary for the
conduct of the Operations, the Vendor-Owned Real Properties
and the Leased Properties; and (ii) all such Environmental
Permits are in force.
2.5 So far as the Vendors are aware, the Canadian Business and US
Business have not disposed of any Hazardous Substance on the
Vendor-Owned Real Properties or Leased Properties in
circumstances which are likely to give rise to material
liability under Environmental Laws.
2.6 So far as the Vendors are aware, the Canadian Business and US
Business have not had any emissions or discharges of any
Hazardous Substances in circumstances which are likely to give
rise to material liability under Environmental Laws.
2.7 Vendors have not caused any Environmental Condition and to
Vendors' knowledge there exists no Environmental Condition.
2.8 So far as Vendors are aware no lien or superlien has been
imposed on any of the Vendor-Owned Real Properties or Leased
Properties in connection with any Environmental Liability.
2.9 So far as Vendors are aware there are no underground storage
tanks, whether or not currently in use, at the Vendor-Owned
Real Properties or Leased Properties and no underground
storage tanks have previously been removed therefrom, and any
existing underground storage tank disclosed in the Disclosure
Letter, together with the piping appurtenant thereto, is free
of leaks and is otherwise in compliance with applicable
Environmental Laws.
3 Environmental Indemnity
Subject to remaining provisions of this Schedule 16 together with
Sections 2.3 to the extent not in conflict with the provision of this
Schedule 16 of the Agreement, the Vendors agree to indemnify, defend
and hold the Purchasers' Group harmless from and against any and all
Liabilities and Losses including claims for personal injury and
property damage arising out of or in connection with any Environmental
Liability (collectively, "Environmental Loss" or "Environmental
Losses") in an amount equal to the Agreed Proportion of any
Environmental Loss suffered or incurred by the Purchasers' Group after
Closing to the extent that it arises out of:
3.1 any breach of Environmental Warranties made by the Vendors
contained in this Agreement;
3.2 any Environmental Liability arising out of or relating to any
Environmental Condition, act or omission, in each case that
existed with respect to the Operations on or prior to the
Closing Date;
3.3 the violation of any then-applicable Environmental Law by the
Canadian Business or the US Business on or prior to the
Closing Date or which is continuing after the Closing Date for
a period of four (4) months;
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3.4 any Environmental Liability arising out of any failure by
Vendors to prepare and timely file Notices as provided by
Section 4 of this Schedule 16 or otherwise comply with the
provisions of the transfer acts listed on Exhibit 16C;
3.5 any Environmental Liability arising out of the recycling or
disposal of Hazardous Substances or the disposal of any other
waste materials at any off-site location on or prior to the
Closing Date;
3.6 any Environmental Liability arising out of any Excluded
Assets, any Excluded Liabilities or any properties owned,
occupied, operated, controlled or leased by the Vendors where
such ownership, occupation, operation, control or lease ceased
prior to Closing.
4 Change of Ownership Notification
Vendors agree to prepare and timely file, at Vendors' sole expense, and
in Vendors' names, all environmental forms, reports, notices,
statements and questionnaires, however defined, required to be
submitted to any Environmental Governmental Authority or to Purchasers
in connection with the Agreement ("Notices"), as set forth on Exhibit
16C. Vendors further agree that all such filings shall be as complete
and accurate as possible and that where such filings require the name
of the person or entity who will be responsible for and undertake any
Remedial Action which may be required, the Vendors shall identify the
Vendors as the party responsible.
5 Limitations on liability
5.1 Apportionment of Environmental Losses
(a) Vendors will bear 100% of the Environmental Losses
which relate to:
(i) the matters and projects identified on
Exhibit 16A; and
(ii) Sections 3.4, 3.5 and 3.6.
(b) Vendors and Purchasers will bear Environmental Losses
which relate to Sections 3.1, 3.2 and 3.3 in the
following ratios [Vendors:Purchasers]:
(i) 95:5 where written notice of a claim is
given by the Purchasers to the Vendors prior
to the third anniversary of the Closing
Date;
(ii) 70:30 where written notice of a claim is
given by the Purchasers to the Vendors
following the third anniversary of the
Closing Date but prior to the fifth
anniversary of the Closing date.
(c) Notwithstanding anything in this Agreement to the
contrary, and in addition to Vendors' obligations
under Exhibit 16A, Vendors and Purchasers will bear
Environmental Losses which relate to the matters and
projects identified on Exhibit 16B in the following
ratios:
(i) Remedial Action required as a result of
changes in applicable Environmental Law
which occur prior to the first anniversary
of the Closing Date will be shared 50:50;
(ii) Remedial Action required as a result of
changes to applicable Environmental Laws
which occur after the first anniversary but
prior to the second anniversary of the
Closing Date will be shared 33 1/3 : 66 2/3;
and
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(iii) Remedial Action required as a result of
changes to applicable Environmental Laws
which occur after the second but prior to
the third anniversary of the Closing Date
will be shared 25:75.
(d) Each written notice of claim under this Section 5.1
shall be given in accordance with the requirements of
Section 19.14 of the Agreement and shall include
reasonable details regarding the matter in respect of
which the claim is being made (including an estimate
of the amount of such claim if practicable).
5.2 Limits on Liability
The Vendors shall not be liable in relation to any claim
under Section 3 of this Schedule 16 of the Agreement:
5.2.1 in respect of any Operational Expenditure; and
5.2.2 in respect of any claim unless written notice of such
claim is given by the Purchasers to the Vendors by
the relevant anniversary date in accordance with
Section 5.1 of this Schedule 16.
5.3 Change of Use / Exacerbation
The Vendors shall not be liable in relation to any claim under
Section 3 to the extent that the Environmental Loss which is
the subject of the claim arises by virtue of the closure,
redevelopment or proposed redevelopment of any Real Property
after Closing or is made worse by the act or omission of the
Purchasers (or any member of the Purchasers' Group) or because
of any change in use of any Real Property.
5.4 Exclusive Remedy
The rights and remedies of Purchasers and the Purchasers'
Group under this Schedule 16 shall be the exclusive remedy for
Environmental Losses and Purchasers shall have no other
rights, and shall expressly release and waive any and all such
other rights, against Vendors based on Environmental Laws with
respect to matters covered by this Schedule 16.
6 Conduct of Claims
The provisions of this Section 6 of this Schedule 16 shall apply to any
matter which may give rise to or arises by virtue of a claim under
Section 3 of this Schedule 16.
6.1 Where the Vendors or any member of the Vendors' Group has or
may have a claim against a third party in relation to a matter
which has given or may give rise to a claim under Section 3 of
this Schedule 16, upon written request by Vendors to
Purchasers, the Purchasers shall afford the Vendors all such
assistance as may be reasonable in relation to its conduct of
such claim (subject to any duties of confidentiality owed to
third parties and to any right to maintain legal privilege),
including access to and copies of any reports, correspondence,
documents or other information in the possession of the
Purchasers or any member of the Purchasers' Group.
6.2 Without prejudice to the validity of any claim or alleged
claim made by the Purchasers under Section 3 of this Schedule
16, the Purchasers shall promptly appear and give testimony
and shall provide such reports, documents, correspondence,
information, assistance (including access to employees, agents
or contractors of the Purchasers' Group) and facilities as are
potentially relevant to any such claim and are in its
possession (or in the possession of the Purchasers' Group) as
the Vendors may reasonably request (subject to compliance with
any
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duties of confidentiality owed to third parties and to the
right to maintain legal privilege) including reasonable access
to any relevant part of any Real Property or so far as
reasonably practicable to any adjacent or affected property.
The Vendors receiving such information etc. shall keep all
such information confidential except for disclosure in
defending or prosecuting any Environmental Proceedings or any
claim or alleged claim or argument under Section 3 of this
Schedule 16 or as otherwise required by law. Vendors shall use
reasonable efforts not to impose an undue burden on
Purchasers.
6.3 If a claim under Section 3 of this Schedule 16 arises or may
arise as a result of or in connection with any Environmental
Proceedings to which the Purchasers or any member of the
Purchasers' Group is or is likely to become a party or where
the Purchasers or a member of the Purchasers' Group is the
subject of such Environmental Proceedings, the Purchasers
shall notify the Vendors within fifteen (15) Business Days, in
writing, of such claim or potential claim and the actual or
anticipated Environmental Proceedings as soon as it becomes
aware of such claim or Proceedings, setting forth in
reasonable detail the nature thereof and the basis upon which
indemnification is sought, and the following provisions shall
apply:
(i) the Vendors shall have the right at any time to
assume primary responsibility for and control over
the conduct of all or any part of such Environmental
Proceedings. Unless and until the Vendor assumes
conduct by notice in writing to the Purchasers, the
Purchasers shall have responsibility for the conduct
of any such Environmental Proceedings;
(ii) while the Purchasers have responsibility for the
conduct of any such Environmental Proceedings, it
shall be entitled to avoid, dispute, deny, defend,
resist, appeal or contest such Environmental
Proceedings (including, without limitation, making
counterclaims or other claims against third parties
in its own name) and to have responsibility for the
conduct of such Environmental Proceedings, and any
related Remedial Action, negotiations or appeals;
provided, however, that no admission of liability
shall be made by or on behalf of the Purchasers (or
any member of the Purchasers' Group), and the claim
shall not be compromised, disposed of or otherwise
settled without the prior written consent of the
Vendors (such consent not to be unreasonably withheld
or delayed);
(iii) Purchasers recognize Vendors' right to control the
conduct of those Environmental Proceedings over which
Vendors assume control. If the Vendors assume conduct
of the Environmental Proceedings, they shall be
entitled to take any action to avoid, dispute, deny,
defend, resist, appeal, compromise or contest such
Environmental Proceedings in the name of the
Purchasers or any member of the Purchasers' Group.
Vendors shall, however, consult as much as is
reasonably practicable with and pay reasonable regard
to the views of the Purchasers (or the relevant
member of the Purchasers' Group) in respect thereof
and shall not take such action in its name as may
materially adversely affect the value of any Real
Property or the goodwill or good name of the
Purchasers (or the relevant member of the Purchasers'
Group) and the Vendors shall consult as much as is
reasonably practicable with and pay reasonable regard
to the views of the Purchasers (or the relevant
member of the Purchasers' Group) as regards any
negotiations and/or appeals arising out of such
Environmental Proceedings. Vendor shall make no
admission of liability and the claim shall not be
compromised, disposed of or otherwise settled without
the prior written consent of Purchasers (such consent
not to be unreasonably withheld or delayed);
(iv) except as otherwise provided herein, after Vendors'
assumption of the defense of the Environmental
Proceeding the Vendors shall not be liable to the
Purchasers for
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any legal or other expenses subsequently incurred by
the Purchasers in connection with the defense
thereof;
6.4 The party having responsibility for the conduct of any
Environmental Proceedings (the "Conduct Party") shall also
ensure that:
(i) the other party shall be informed promptly of any
information, and shall be provided with copies of any
correspondence or documents held by the Conduct Party
which is material to the Environmental Proceedings
(except to the extent this would reasonably be
expected to waive privilege in respect thereof);
(ii) the other party shall be provided with advance notice
of any proposal by the Conduct Party (or any member
of its group of companies) or any third party to
undertake Remedial Action provided that this
obligation shall not apply in case of emergency, that
is where there is an imminent and substantial risk of
serious harm to human health or to the environment;
6.5 If any amount is recovered in relation to any Environmental
Loss or claim under the Environmental Warranties pursuant to
Sections 7.1 and/or 7.3 of this Schedule 16, after first
deducting any costs and expenses incurred in relation to such
recovery, the balance shall be divided between the Vendors and
the Purchasers in accordance with the Agreed Proportion in
which the Environmental Loss arising in relation to the breach
of Environmental Warranties was borne by them.
7 Remedial Action
With respect to any Environmental Proceedings that involve Remedial
Action, and with respect to the Agreed Remedial Action Plan, the
Vendors shall be the Conduct Party and the following shall apply:
7.1 Scope of Work
(i) AGREED REMEDIAL ACTION PLAN: Within ninety (90)
calendar days after Closing, Vendors shall retain a
Qualified Consulting Firm to prepare a work plan
(Scope of Work) setting forth (in reasonable detail)
the Remedial Action to be performed with respect to
the conditions set forth on the Agreed Remedial
Action Plan (the Remedial Work) for the approval of
Purchasers, which approval shall not be unreasonably
withheld. With respect to other Remedial Action under
this Schedule 16, Vendors shall retain such
consultant within 90 days of written notice by
Purchasers to Vendors of the need to initiate
Remedial Action.
(ii) ENVIRONMENTAL PROCEEDINGS: where Remedial Action is
required as a result of any Environmental Proceedings
pursuant to Section 6.3 of this Schedule 16, the time
within which Vendors shall retain a Qualified
Consulting Firm to prepare a Scope of Work for the
approval of Purchasers, which approval shall not be
unreasonably withheld, shall be within Vendors'
discretion.
(iii) Within twenty-one (21) Business Days after receipt
from Vendors of the Scope of Work, Purchasers shall
advise Vendors in writing of its approval thereof or
objections thereto. If Purchasers fails to respond,
in writing, within such twenty-one (21) Business Day
period, then Purchasers shall automatically be deemed
to have approved the Scope of Work. If Purchasers
object to the Scope of Work, and the parties are
unable to resolve such objections either Vendors or
Purchasers shall have the unilateral right, but not
the obligation, to provide written notice to, and/or
consult with (Notify), the applicable Government
Authority regarding the
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appropriate Scope of Work for the conditions for
which Purchasers and Vendors fail to agree upon a
Scope of Work; provided, however, that the party that
desires to Notify such Environmental Governmental
Authority shall first give the other party five (5)
Business Days' prior written notice thereof (the
Scope of Work Notice) in accordance with the
following procedure:
(a) within five (5) calendar days after Purchasers or Vendors (as
the case may be) receive the Scope of Work Notice, Vendors
shall Notify the applicable Environmental Governmental
Authority, in writing, regarding the appropriate Scope of Work
as to which Purchasers and Vendors disagree upon a Scope of
Work;
(b) in the event that Vendors fail to Notify the Environmental
Governmental Authority within such five (5) calendar day
period, Purchasers shall have the right, but not the
obligation, to Notify the Environmental Governmental
Authority, in writing, in order to determine the appropriate
Scope of Work; and
(c) if neither party notifies the Environmental Governmental
Authority or if no definitive answer is received from the
Environmental Governmental Authority within 60 calendar days
of the Notice, the Vendors and Purchasers shall jointly agree
upon, retain and share equally the cost of a Qualified
Consulting Firm (Third Party Consultant) to provide an opinion
concerning the appropriate scope for the items as to which the
parties disagree. Within ten Business Days of the retention,
Vendors shall provide the Scope of Work to the Third Party
Consultant and Purchasers shall provide to the Third Party
Consultant a writing setting forth in detail the items as to
which they disagree and the reasons therefor. As soon
thereafter as reasonably possible, Vendors and Purchasers and
their environmental consultants shall jointly communicate
and/or meet with the Third Party Consultant. Within seven days
of the joint communication and/or meeting with the Third Party
Consultant, the Third Party Consultant shall advise of its
opinion regarding the appropriate scope of work for the items
as to which the parties disagree, and the Scope of Work shall
be revised to reflect the determination of the Third Party
Consultant.
7.2 Notice to Environmental Governmental Authorities
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After the Scope of Work is determined pursuant to Section
7.1(ii) of this Schedule 16, then, prior to undertaking the
Remedial Work, Vendors shall, at any time, consult with
Purchasers regarding whether any notice to, or consultation
with, any Environmental Governmental Authority is required
under applicable Environmental Laws. If either Vendors or
Purchasers reasonably determine that any such notice or
consultation is required under applicable Environmental Laws,
Vendors, after giving Purchasers reasonable advance notice
thereof shall undertake such notice or consultation and, if
required by the Environmental Governmental Authority with
jurisdiction over the Remedial Work or if desired by
Purchasers, shall seek approval of the Remedial Work from that
Environmental Governmental Authority. Vendors agree that, from
time to time, the Scope of Work for the Remedial Work may be
revised and shall be deemed to include any and all Remedial
Action required by such Environmental Governmental Authority;
provided, however, that Vendors shall have the right to
conduct negotiations with, and undertake appeals to, such
Environmental Governmental Authority. Purchasers shall be kept
reasonably informed of such negotiations and appeals, receive
copies of proposed submissions and reports for review and
comment and afforded an opportunity to participate in all
meetings and conferences with any Environmental Governmental
Authority. Vendor shall pay reasonable regard to any comments
submitted by Purchasers. Nothing contained herein shall be
deemed to prevent Vendors or Purchasers from complying with
applicable reporting requirements under Environmental Laws.
Vendors shall have the right to delay commencement or
continuation of Remedial Work as long as Vendors properly
obtain any necessary stays pending appeals from the
Environmental Governmental Authority, if needed, provided that
such delay shall not unreasonably interfere with Purchasers'
use of or operations at the affected Real Property.
7.3 Performance of Work
(i) Promptly following approval of the Scope of
Work by Purchasers and any Environmental
Governmental Authorities consulted or
notified, Vendors shall diligently cause and
continue to cause the Remedial Work to be
diligently performed by their Qualified
Consulting Firm until such work is completed
(as that term is defined under Section 7.5
of this Schedule 16). From and after
Purchasers' approval of any Scope of Work,
Vendors may not materially modify, amend,
restrict, expand, alter or eliminate any
provision or component of the Scope of Work
without Purchasers' prior consent, which
consent shall not be unreasonably withheld
or delayed.
(ii) Notwithstanding the provisions of Section
7.3(i) of this Schedule 16, Vendors may,
without prior consultation with Purchasers
if such prior consultation is not possible,
amend the Scope of Work to take such action
but only as is reasonably necessary in case
of an emergency or to comply with a lawfully
issued emergency demand or order of the
relevant Government Authority, provided,
however, that Vendor shall notify Purchasers
of any such amendment as soon thereafter as
is possible.
7.4 Institutional Controls
In the event that the Environmental Governmental Authority
with jurisdiction over the Remedial Work agrees that the level
of remediation required at a Real Property at which Remedial
Work is being performed may be reduced by the imposition of
restrictions limiting the use and occupancy of the Real
Property to non-residential uses, Purchasers shall not
unreasonably withhold its consent to the imposition of such
use restrictions and shall not seek any compensation therefor
from Vendors. Vendors shall not propose to any Environmental
Governmental Authority or agree to the imposition of any other
institutional controls without Purchasers' written consent
which consent Purchasers may withhold if Purchasers, in their
reasonable discretion, determine that such controls will
substantially reduce the value of the Real Property or
unreasonably interfere with its current use of the Real
Property.
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7.5 Completion of Remedial Work
Upon the completion of the Remedial Work at any Real Property in
accordance with the approved Scope of Work and as necessary to satisfy
the requirements of applicable Environmental Laws or Environmental
Permits, Vendors shall so advise Purchasers and shall provide such
documentation as Purchasers may reasonably require to satisfy
Purchasers that the Remedial Work has been completed. For the purposes
of this Section, "completed" or "completion" shall mean: (i) in the
event that Vendors or Purchasers have provided notice to or consulted
with a Environmental Governmental Authority with respect to the
Remedial Work, Vendors shall have: (x) obtained a written statement by
the Environmental Governmental Authority with jurisdiction over the
Remedial Work in question that no further action is required with
respect to such Real Property, and (y) if applicable, formally
requested and obtained, in writing, the closure, de-listing and/or
removal of the relevant Real Property from any list maintained by such
Environmental Governmental Authority, or (ii) in the event that a
Environmental Governmental Authority has not been consulted or has been
consulted and has not responded within six (6) months, completion shall
be evidenced by a written certification to Purchasers from Vendors'
Qualified Consulting Firm, in a form reasonably acceptable to
Purchasers, stating that all such work has been completed in accordance
with the approved Scope of Work and the requirements of applicable
Environmental Laws and Environmental Permits satisfied.
7.6 Access for Performance of Remedial Work
Prior to the performance of the Remedial Work by Vendors, Vendors and
Purchasers shall execute an Access Agreement in each case in which
Remedial Work is to be performed by Vendors, and substantially in the
form and substance of Exhibit 16D, Model Access Agreement.
7.6.1 Prior to, and throughout the performance of the
Remedial Work by Vendors, Vendors shall cause their
Qualified Consulting Firm and all other contractors
to maintain workers' compensation insurance, as
required by law, professional errors and omissions
liability insurance, where appropriate, of not less
than $3,000,000, contractor's pollution liability
insurance with coverage of not less than $1,000,000
per occurrence, general liability insurance with
coverage of not less than $1,000,000 per occurrence
and umbrella liability insurance with coverage of not
less than $10,000,000. Purchasers shall be named as
an additional insured with respect to the general
liability policy. Vendors shall, promptly upon
Purchasers' request, provide Purchasers with
Certificates of Insurance.
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Schedule 17
Excluded Assets
1.1 The benefit of any Claim made by the Vendors in respect of
insurance arising or accruing in consequence of anything done or omitted to be
done prior or subsequent to Closing relating to an Excluded Liability or
Excluded Asset;
1.2 All right, title and interest in the trade marks and trade
names "BICC" and "Brand ▇▇▇" other than pursuant to Section 17.5 of the
Agreement;
1.3 Debts owing by any employee who is not a Continuing
Employee;
1.4 Debts due from any relevant Tax authority in respect of any
Tax arising on or before Closing except to the extent reflected in the Net
Asset Statement including any bond or other security issued by any Tax
authority or other Governmental Authority representing any such debts;
1.5 Cash and Cash Equivalents credited to any account of either
Vendor, wherever held;
1.6 Debts due not included in the Net Asset Statement that are
not part of the Operations;
1.7 All prepayments, deposits and escrows that do not relate to
the Operations;
1.8 All Claims, causes of actions and other legal rights and
remedies that do not relate to Assumed Liabilities.
1.9 The former manufacturing site in York, PA;
1.10 The former manufacturing site in Yorkers, New York;
1.11 The following former sales offices:
a) Schaumberg, IL
b) Norcross, GA
c) Huntington Beach, CA
d) Houston, TX;
1.12 All shares of capital stock and any other interest of the US
Vendor in Brintec Canada Ltd., General Precision Parts, Inc.
and BBR Holding Ltd.
1.13 All assets relating to Employee Benefit Arrangements that
are not being assumed by the Purchasers.
1.14 Books, records and files, including minute books and other
corporate record books and all Tax records and files
relating to the Vendors or the Excluded Assets or Excluded
Liabilities.
1.15 Personal computers, office desks and office chairs of
Employees that are not Continuing Employees.
1.16 Asset Purchase Agreement dated as of February 19, 1996
between BICC Philips Inc. and Essex international, Inc.
1.17 The following Hardware & Furniture used at the West Nyack
Facility
- 3 Compaq Deskpro 2000 Computers including
Optiquest monitors and cables
- HP LaserJet 4000N printer
- HP LaserJet III
- HP LaserJet 6L (▇. ▇▇▇▇▇▇▇)
- Any and all furniture located within the Tax Dept.
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1.18 The following Software used at the West Nyack Facility
- Fast Tax for 1997 &1998
- AACTS for 1994, 1995 & 1996
- Microsoft Office 95 which includes Microsoft Word
word-processing and Microsoft Excel spreadsheet
- Lotus 1-2-3 spreadsheet
- FAS Encore Tax Depreciation Software
- Org Plus for Windows 3.1
- CCH Omni Tax Tax Research software
- CCH Perform Plus for Windows
- CCH Win Tax Rate Locator
- Federal Tax Products - ▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ Tax
Products CD-ROM
- New York State Personal and Corporate Tax Forms
for 1998 CD-ROM
- WinZip
- CompuServe (Internet access)
- Kubra Doc 2.1 (Internal software to print
invoices)
1.19 The following items in the West Nyack Tax Library
- CCH, BNA, RIA, Panel Publishing & etc. Tax
Research Books and Forms in the Tax Dept. Library
in West Nyack
- Tax subscriptions by CCH, BNA, RIA, Panel
Publishing & other publishers
1.20 The following items in the West Nyack Tax Files
- All files located in the Tax Department in West
Nyack
- All BICC Cables and Pyrotenax Usa, Inc. files in
archives (entire contents in off- site storage)
- Any and all BICC Cables and Pyrotenax USA, Inc.
corporate files through the date of Closing
1.21 Federal & State Tax Estimates or Receivables Re: BICC Cables
Corp. and Pyrotenax USA, Inc., including IRS refund of about
$900K Re: IRS audit - Brintec Corporation & subs
1.22 Accounting Software & Files - Access to the Accounting
Software for all years through the date of Closing - Access
to Accounting Dept. files through the date of Closing
1.23 The individual employment Contract of each Employee set
forth in the Employment Letter who is not a Continuing
Employee.
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Schedule 18
Bonds and Guarantees
BICC USA GROUP
OUTSTANDING LETTERS OF CREDIT
April-99
ORIGINAL
AP $ ISSUING BANK ISSUE EXPIRY
No. PL OBLIGO BENEFICIARY AMOUNT BANK REF DATE DATE COMMENTS
-----------------------------------------------------------------------------------------------------------------------------------
31 BC BCC Atlantic Mutual W.C. 675,000 CHASE P-398331 10/15/97 1-Nov-98 WC Prems/BCC Evergree
C BICC 30 days
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33 BC BCC STATE BANK OF 9,090 CHASE P-357205 3-MAR-98 23-Mar-00 For Guar to Kudremukh
C INDIA Iron Ore Co.
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38 BC BCC ABB Sadelmi S.P.A. 144,489 CHASE P-374754 11-Aug-98 30-Oct-01 Bid
C
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41 BC BCC Travelers W.C. BICC 1,900,000 CHASE P-396747 8-MAR-99 15-Mar-00 WC Prems - Evergreen
C 90 days
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N/A BC BCC ABB Sadelin S.P.A 46,448 CHASE Pending Pending 30-Mar-02 Bid
C
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Total 8,577,303
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166
161
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SURETY REPORT
M-DAY M-DAY Bond
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Bond No. Surety Principal Obligee/in State of Bond Effective Expire Amount
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183946 Nat. Union Utility CA, City of Roseville Labor & 08/14/98 12/31/99 459,745.00
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Material
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016720 Nat. Union Polymers IN, ▇▇▇▇▇▇ Environmental Fin Guar. 11/21/98 11/21/99 400,000.00
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141451 Nat. Union Utility NE, Omaha Pub. Power Perf. 06/13/96 06/05/99 2,900,000.00
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183948 Nat. Union Utility NE, Omaha Publ Power Perf. 11/08/98 04/30/99 265,000.00
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*183949 Nat. Union Utility NE, Omaha Pub. Power Perf. & Pay. 11/17/98 12/30/99 385,836.00
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172097 Nat. Union Brand-▇▇▇ TX, Graybar Electric Contract 04/10/97 04/30/99 16,249.00
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Dated: 4/05/99 SURETY REPORT 1/27/98 Pg. 2 of 2
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M-DAY M-DAY Bond
Bond No. Surety Principal Obligee/in State of Bond Effective Expire Amount
------------------------------------------------------------------------------------------------------------------------------------
183941 Nat. Union Utility WA, Snohomish, Co, PUD Perf. 05/01/98 04/30/99 243,285.00
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* Nat. Union Utility WA, Orcas Power & Light Bid Bond 04/03/98 04/30/99 75,000.00
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CUSTOMS BONDS
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▇▇-▇▇▇▇▇▇▇ C.A. ▇▇▇▇ DQ Utility DuQuoin, IL Customs 04/22/98 04/22/99 100,000.00
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UT Utility West Nyack, NY Customs 04/22/98 04/22/99
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JM Utility Malvern, AR Customs 04/22/98 04/22/99
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SV Utility Marshall, TX Customs 04/22/98 04/22/99
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PS BPC Indianapolis, IN Customs 04/22/98 04/22/99
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MN BBR Marion, IN Customs 04/22/98 04/22/99
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▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ Customs 04/22/98 04/22/99
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167
162
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CT BBR Willmantic, CT Customs 04/22/98 04/22/99
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JK BBR Jackson, TN Customs 04/22/98 04/22/99
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970201- BICC-CAN Canada St. ▇▇▇▇▇▇ Customs 04/22/98 04/22/99
00835
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970201- BICC-CAN Canada Moose Jaw Customs 04/22/98 04/22/99
01727
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OTHERS
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ANNUALS
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61-02461 Nat. Union Utility Puerto Rico Electric Power Bid Bond renewed yrly. $ 850,000.00
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11-98-01 Nat. Union Utility Omaha Public Power Bid Bond open
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11-98-02 Nat. Union Utility Lincoln Electric System Bid Bond open
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11-98-03 Nat. Union Utility Nebraska Publish Power District Bid Bond open
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11-98-04 Nat. Union Utility Public Utility #1 Snohomish City Bid Bond $35,000.00
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11-98-09 Nat. Union Utility Sacramento (SMUD) Continuous
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* = New bonds included in this quarter. * = bonds added and removed during this quarter
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168