EX-10.1



 





EXECUTION COPY 




ASSET PURCHASE AGREEMENT




Dated as of December 22, 2006




By and Among




Electrical Components International, Inc.,




Noma Holding Inc.,




and




GenTek Inc.




 









 






TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS; INTERPRETIVE MATTERS
	 	 	1	 
	 
	 	 	 	 
	1.1 Certain Definitions
	 	 	1	 
	1.2 Terms Defined Elsewhere in this Agreement
	 	 	7	 
	1.3 Other Definitional and Interpretive Matters
	 	 	10	 
	1.4 Construction
	 	 	11	 
	 
	 	 	 	 
	ARTICLE II TRANSFER OF ASSETS AND LIABILITIES
	 	 	11	 
	 
	 	 	 	 
	2.1 Assets to be Sold
	 	 	11	 
	2.2 Excluded Assets
	 	 	13	 
	2.3 Assumed Liabilities
	 	 	15	 
	2.4 Excluded Liabilities
	 	 	15	 
	2.5 Transfer of Assets and Assumption of Liabilities
	 	 	17	 
	2.6 Non-assignable Contracts
	 	 	18	 
	2.7 Payments Post-Closing
	 	 	18	 
	2.8 Withholding
	 	 	19	 
	 
	 	 	 	 
	ARTICLE III CONSIDERATION
	 	 	19	 
	 
	 	 	 	 
	3.1 Consideration
	 	 	19	 
	 
	 	 	 	 
	ARTICLE IV CLOSING AND TERMINATION
	 	 	23	 
	 
	 	 	 	 
	4.1 Closing Date
	 	 	23	 
	4.2 Closing Deliveries
	 	 	23	 
	4.3 Termination of Agreement
	 	 	25	 
	4.4 Procedure Upon Termination
	 	 	25	 
	4.5 Effect of Termination
	 	 	25	 
	 
	 	 	 	 
	ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND SELLER
	 	 	26	 
	 
	 	 	 	 
	5.1 Organization and Good Standing; Authorization
	 	 	26	 
	5.2 Conflicts; Consents of Third Parties
	 	 	26	 
	5.3 Subsidiaries
	 	 	27	 
	5.4 Financial Statements
	 	 	28	 
	5.5 No Undisclosed Liabilities
	 	 	30	 
	5.6 Absence of Certain Developments
	 	 	30	 
	5.7 Taxes
	 	 	30	 
	5.8 Real Property
	 	 	31	 
	5.9 Tangible Personal Property
	 	 	32	 
	5.10 Intellectual Property
	 	 	32	 
	5.11 Material Contracts
	 	 	35	 
	5.12 Employee Benefits Plans
	 	 	37	 
	5.13 Labor Matters
	 	 	39	 






i









 





TABLE OF CONTENTS

(continued)





	 	 	 	 	 
	 	 	Page	 
	5.14 Litigation
	 	 	40	 
	5.15 Compliance with Laws; Permits
	 	 	41	 
	5.16 Environmental Matters
	 	 	41	 
	5.17 Financial Advisors
	 	 	42	 
	5.18 Related Party Transactions
	 	 	43	 
	5.19 Insurance
	 	 	43	 
	5.20 Foreign Corrupt Practices Act
	 	 	43	 
	5.21 Customers
	 	 	43	 
	5.22 Suppliers
	 	 	44	 
	5.23 Product Recalls
	 	 	44	 
	5.24 Title to Assets
	 	 	44	 
	5.25 Sufficiency of Assets
	 	 	44	 
	5.26 Disclaimer of other Representations and Warranties
	 	 	44	 
	 
	 	 	 	 
	ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PURCHASER
	 	 	45	 
	 
	 	 	 	 
	6.1 Organization and Good Standing
	 	 	45	 
	6.2 Authorization of Agreement
	 	 	45	 
	6.3 Conflicts; Consents of Third Parties
	 	 	45	 
	6.4 Litigation
	 	 	46	 
	6.5 Investment Intention
	 	 	46	 
	6.6 Financial Advisors
	 	 	46	 
	6.7 Sufficient Funds
	 	 	46	 
	6.8 No Knowledge of Breach
	 	 	46	 
	 
	 	 	 	 
	ARTICLE VII COVENANTS
	 	 	46	 
	 
	 	 	 	 
	7.1 Access to Information; Financing Cooperation
	 	 	46	 
	7.2 Conduct of the Business Pending the Closing
	 	 	47	 
	7.3 Consents
	 	 	50	 
	7.4 Further Assurances
	 	 	50	 
	7.5 Confidentiality
	 	 	50	 
	7.6 Preservation of Records
	 	 	51	 
	7.7 Publicity
	 	 	51	 
	7.8 Employees and Employee Benefits
	 	 	52	 
	7.9 Supply Agreement; Transition Services Agreement
	 	 	56	 
	7.10 Tax Matters
	 	 	57	 
	7.11 Use of Name
	 	 	61	 
	7.12 Termination of Intercompany Obligations
	 	 	62	 
	7.13 Non-Competition
	 	 	63	 
	7.14 Non-Solicitation
	 	 	64	 
	7.15 Insurance
	 	 	65	 
	7.16 No Solicitation or Negotiation
	 	 	65	 
	7.17 Certain Notices
	 	 	66	 
	7.18 Successors
	 	 	66	 






ii









 




TABLE OF CONTENTS

(continued)





	 	 	 	 	 
	 	 	Page	 
	7.19 Bulk Sales
	 	 	67	 
	 
	 	 	 	 
	ARTICLE VIII CONDITIONS TO CLOSING
	 	 	67	 
	 
	 	 	 	 
	8.1 Conditions Precedent to Obligations of Purchaser
	 	 	67	 
	8.2 Conditions Precedent to Obligations of Seller
	 	 	68	 
	8.3 Frustration of Closing Conditions
	 	 	69	 
	 
	 	 	 	 
	ARTICLE IX INDEMNIFICATION
	 	 	69	 
	 
	 	 	 	 
	9.1 Indemnification
	 	 	69	 
	9.2 Limitations on Indemnification for Breaches of Representations and Warranties
	 	 	71	 
	9.3 Indemnification Procedures
	 	 	71	 
	9.4 Sole Remedy
	 	 	73	 
	9.5 Limitation on Losses
	 	 	73	 
	9.6 Tax Treatment of Indemnity Payments
	 	 	74	 
	9.7 Environmental Losses
	 	 	74	 
	9.8 Subrogation
	 	 	74	 
	 
	 	 	 	 
	ARTICLE X MISCELLANEOUS
	 	 	75	 
	 
	 	 	 	 
	10.1 Survival of Representations, Warranties and Covenants
	 	 	75	 
	10.2 Expenses
	 	 	75	 
	10.3 Submission to Jurisdiction; Consent to Service of Process
	 	 	75	 
	10.4 Entire Agreement; Amendments and Waivers
	 	 	76	 
	10.5 Governing Law
	 	 	76	 
	10.6 Notices
	 	 	76	 
	10.7 Severability
	 	 	77	 
	10.8 Binding Effect; Assignment
	 	 	78	 
	10.9 Counterparts
	 	 	78	 






iii









 





Schedules




	 	 	 
	Schedule 1.1

	 	Knowledge of Seller
	Schedule 2.1(c)

	 	Tangible Personal Property
	Schedule 2.1(f)(i)

	 	Leased Real Property
	Schedule 2.1(f)(ii)

	 	Owned Properties
	Schedule 2.1(j)

	 	Inventory
	Schedule 2.2(k)

	 	Excluded Litigation
	Schedule 2.2(m)

	 	Other Excluded Assets
	Schedule 3.1(b)

	 	Accounting Principles and Methodologies
	Schedule 5.2(a)

	 	Conflicts
	Schedule 5.2(b)

	 	Required Consents
	Schedule 5.3(a)

	 	Subsidiaries
	Schedule 5.4(a)(i)

	 	Financial Statement Assumptions and Methodologies
	Schedule 5.4(a)(ii)

	 	Business Balance Sheet
	Schedule 5.4(b)

	 	Books and Records
	Schedule 5.4(d)

	 	Accounts Receivable
	Schedule 5.4(e)

	 	Inventory
	Schedule 5.7

	 	Taxes
	Schedule 5.7(g)

	 	Transferred Subsidiary Tax Returns
	Schedule 5.7(j)

	 	Foreign Transferred Subsidiary Tax Incentives
	Schedule 5.8(a)

	 	Owned Properties
	Schedule 5.8(b)

	 	Real Property Leases
	Schedule 5.8(d)

	 	Subleases
	Schedule 5.9(i)

	 	Tangible Personal Property
	Schedule 5.9(ii)

	 	Remaining Concord Assets
	Schedule 5.10(a)

	 	Products
	Schedule 5.10(b)

	 	Liens on Intellectual Property
	Schedule 5.10(c)

	 	Registered Intellectual Property
	Schedule 5.10(e)

	 	Licenses
	Schedule 5.10(f)

	 	In-Licensed IP
	Schedule 5.11(a)

	 	Material Contracts
	Schedule 5.11(b)

	 	Assigned Agreement Default
	Schedule 5.11(c)

	 	Shared Contracts
	Schedule 5.12(a)

	 	Employee Benefit Plans
	Schedule 5.12(g)

	 	Retiree Plans
	Schedule 5.12(h)

	 	Foreign Benefit Plans
	Schedule 5.12(i)

	 	Unfunded Plans
	Schedule 5.12(j)

	 	Incentive Bonuses
	Schedule 5.13(a)

	 	Collective Bargaining Agreements
	Schedule 5.13(b)

	 	Labor Issues
	Schedule 5.13(c)

	 	Employees
	Schedule 5.13(d)

	 	Inactive Employees
	Schedule 5.13(e)

	 	Closed Facilities
	Schedule 5.14

	 	Litigation
	Schedule 5.15

	 	Compliance with Laws; Permits






iv









 






	 	 	 
	Schedule 5.16

	 	Environmental Matters
	Schedule 5.16(h)

	 	Environmental Reports and Permits
	Schedule 5.17

	 	Financial Advisors
	Schedule 5.18

	 	Related Party Transactions
	Schedule 5.19

	 	Insurance
	Schedule 5.21

	 	Customers
	Schedule 5.22

	 	Suppliers
	Schedule 5.23

	 	Product Recalls
	Schedule 5.25

	 	Sufficiency of Assets
	Schedule 7.2

	 	Conduct of Business Pending the Closing
	Schedule 7.2(b)(xv)

	 	Open Sales and Management Positions
	Schedule 7.8(d)

	 	KERP
	Schedule 7.12

	 	Termination of Intercompany Obligations
	Schedule 8.1(f)(i)

	 	Required Consents
	Schedule 8.1(f)(ii)

	 	Governmental Approvals
	Schedule 8.1(h)

	 	Release of Guarantees
	Schedule 8.2(d)

	 	Required Consents






v









 





ASSET PURCHASE AGREEMENT




          ASSET PURCHASE AGREEMENT, dated as of December 22, 2006 (this “Agreement”), by and
among Electrical Components International, Inc., a Delaware corporation (“Purchaser”), Noma
Holding Inc., a Delaware corporation (“Seller”), and GenTek Inc., a Delaware corporation
and the indirect parent of Seller (“Parent”).




RECITALS:




          WHEREAS, Seller, including through its Subsidiaries, is engaged in the business of designing,
manufacturing, assembling and marketing wire harness and cable assembly components at their
operations located at McAllen, Texas, Nogales, Arizona, Ontario (Concord and Tillsonburg), Canada,
Sonora (Nogales and Imuris), Mexico, Juárez, Mexico, Reynosa, Mexico, and Gujarat, India, and at
Parent’s offices in Westland, Michigan, providing cable assembly services at certain of these
facilities, and licensing certain of its Marks for other fields of use, excluding the CableTech
Business (the “Business”);




          WHEREAS, Seller’s and its Subsidiaries’ operations at the Concord Facility are in the process
of being shut down and relocated to other facilities included in the Business;




          WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller,
free and clear of all liabilities, obligations, claims, liens and encumbrances (other than the
liabilities, obligations and claims assumed pursuant to this Agreement and the liens and
encumbrances permitted by this Agreement), substantially all of the property, assets (other than
Excluded Assets) and rights of the Business, and to assume certain liabilities of the Business,
upon the terms and subject to the conditions hereinafter set forth;




          WHEREAS, Parent desires that the aforesaid sale be consummated on the terms and conditions set
forth in this Agreement, and in connection therewith Parent acknowledges that its non-competition
covenant to Purchaser, as provided for in Section 7.13, and the non-competition covenant of
Canadian Seller, as provided in the Canada Non-Competition Covenant, are essential elements of the
aforesaid sale and but for the agreement of Parent to comply with such covenant and to cause
Canadian Seller to enter into and comply with the Canada Non-Competition Covenant, Purchaser would
not have entered into this Agreement; and




          NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements
hereinafter contained, the parties hereby agree as follows:




ARTICLE I




DEFINITIONS; INTERPRETIVE MATTERS




          1.1 Certain Definitions. For purposes of this Agreement, the following terms shall have the meanings specified in
this Section 1.1:




          “Affiliate” means, with respect to any Person, any other Person that, directly or
indirectly through one or more intermediaries, controls, or is controlled by, or is under common
control with, such Person, and the term “control” (including the terms “controlled by” and




 









 







“under
common control with”) means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through ownership of voting
securities, by Contract or otherwise.




          “Business Day” means any day of the year on which national banking institutions in New
York, New York are open to the public for conducting business and are not required or authorized by
Law to close.




          “Business Employee” means any current or former employee, director, independent
contractor or consultant of the Business.




          “Business Intellectual Property” means all Intellectual Property used or held for use
primarily in the Business or included or incorporated in the Products.




          “Canadian Purchaser” means a corporation or company to be incorporated by the
Purchaser as a wholly-owned subsidiary under the laws of Canada or any province thereof.




          “Canadian Seller” means Noma Company, a Nova Scotia company.




          “Code” means the Internal Revenue Code of 1986, as amended.




          “Confidential Information” means inventions, algorithms, formulas, schematics,
technical drawings, ideas, know-how, processes not otherwise protected by patents or patent
applications, source and object code, program listings and trade secrets arising from, used in, or
otherwise relating to the Business.




          “Contract” means any written, oral or other agreement, contract, subcontract, lease,
mortgage, indenture, understanding, arrangement, instrument, note, bond, option, warranty, purchase
order, license, sublicense or other instrument, obligation or commitment or undertaking of any
nature (excluding insurance policies, benefit plans and permits).




          “Environmental Law” means any applicable foreign federal, state, provincial or local
statute, regulation, ordinance, rule of common law, Order, Permit or other legal requirement
currently in effect relating to (i) the protection of human health and safety as they relate to
environmental protection, (ii) the environment, natural resources and wildlife, (iii) the
management, manufacture, possession, presence, use, generation, transportation, treatment, storage,
disposal, Release, threatened Release, abatement, removal, remediation or handling of, or exposure
to, any Hazardous Material, or (iv) pollution, including without limitation, the Solid Waste
Disposal Act, 42 U.S.C. § 6901 et seq., the Federal Water Pollution Control Act, 33 U.S.C. § 1251,
et seq., including the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. § 9601 et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. App. § 1801 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), the Clean Water
Act (33 U.S.C. § 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et
seq.) the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), the
Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. § 136 et seq.), the
Ontario Environmental Protection Act, the federal (Canada) Fisheries Act, the Ontario Water
Resources Act, and the Canadian Environmental Protection Act, 1999, as each has been amended and
the regulations promulgated pursuant thereto.




2









 





          “GAAP” means generally accepted accounting principles in the United States as of the
date of determination.




          “Governmental Body” means any government or governmental or regulatory or
administrative body thereof, or political subdivision thereof, whether national, federal, state,
provincial, municipal, local, foreign or multinational, or any agency, instrumentality, commission
or authority thereof, or any court, tribunal or arbitrator (public or private), or any other body
exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police,
regulatory or taxing authority or power of any nature.




          “Hazardous Material” means any substance which is regulated under Environmental Law
including any substance (i) defined as a hazardous or deleterious substance, hazardous material,
hazardous waste, pollutant or contaminant under any Environmental Laws, (ii) a petroleum
hydrocarbon, including crude oil or any fraction thereof, (iii) classified under any Environmental
Law as hazardous, toxic, corrosive, flammable, explosive, infectious, radioactive or carcinogenic,
or (iv) contains asbestos or PCBs.




          “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the rules and regulations promulgated thereunder.




          “In-Licensed IP” means all Intellectual Property licensed by a third party to Seller
or any of its Subsidiaries and used primarily in the Business or included or incorporated into the
Products, except for Off-the-Shelf Software.




          “Intellectual Property” means all worldwide intellectual property rights, including,
without limitation, the following: (i) all patents and applications therefor, including
continuations, divisionals, continuations-in-part, or reissues of patent applications and patents
issuing thereon (collectively, “Patents”); (ii) all trademarks, service marks, trade names,
service names, brand names, trade dress rights, logos, Internet domain names and corporate names,
together with the goodwill associated with any of the foregoing, and all applications,
registrations and renewals thereof, (collectively, “Marks”); (iii) copyrights and
registrations and applications therefor, works of authorship and mask work rights (collectively,
“Copyrights”); (iv) trade secrets and confidential information; and (v) all Software and
Technology.




          “IRS” means the Internal Revenue Service.




          “Knowledge of Seller” means the actual knowledge of the Persons set forth on
Schedule 1.1.




          “Law” means any law, statute, code, ordinance, rule, regulation, Order or other
legally binding requirement of any Governmental Body.




          “Legal Proceeding” means any judicial, administrative or arbitral actions, claims,
suits, arbitrations, investigations or proceedings (public or private) by or before a Governmental
Body.




          “Liabilities” means any direct or indirect liability, indebtedness, claim, loss,
damage, deficiency, obligation or responsibility, fixed or unfixed, choate or inchoate, liquidated




3









 







or unliquidated, secured or unsecured, accrued, absolute, known or unknown, contingent or
otherwise.




          “Lien” means any lien, encumbrance, pledge, mortgage, deed of trust, security
interest, claim, lease, charge, option, right of first refusal, preemptive right, preferential
right, easement, right of way, servitude or restriction.




          “Material Adverse Effect” means any circumstance, effect, change, event or development
that, individually or together with any other circumstance, effect, change, event or development,
is or would reasonably be expected to be, materially adverse to (i) the Assets, Assumed
Liabilities, business, condition (financial or otherwise) or results of operations of the Business,
taken as a whole, or (ii) the ability of Seller and Parent to consummate the transactions
contemplated by this Agreement or by the other Transaction Documents to which either of them are or
may become a party; provided, however, that none of the following shall be deemed in themselves,
either alone or in combination, to constitute, and that none of the following shall be taken into
account in determining whether there has been or will be, a Material Adverse Effect: (A) any
adverse circumstance, effect, change, event or development to the extent attributable to the impact
of the announcement or pendency of the transactions contemplated hereby or the identity or
involvement of Purchaser on relationships, contractual or otherwise, with customers, suppliers or
employees of the Business; (B) any adverse circumstance, effect, change, event or development
attributable to conditions generally affecting the industry in which the Business operates or
generally affecting the economy of any country in which the Business has material operations or the
U.S. or global economy generally, in each case, which do not disproportionately affect the
Business; (C) any adverse circumstance, effect, change, event or development arising from or
relating to any action taken, or failure to act, to which Purchaser has expressly consented in
writing; (D) changes in Laws after the date hereof; (E) changes in GAAP or the regulatory or
interpretative guidance relating thereto after the date hereof; and (F) acts of war, sabotage or
terrorism, or any escalation or material worsening of any such acts of war, sabotage or terrorism
underway as of the date of this Agreement.




          “NDAs” means (i) non-disclosure agreements; (ii) confidentiality agreements; and (iii)
confidentiality and invention assignment agreements.




          “Off-the-Shelf Software” means Software that is widely available and licensed to the
public on standard terms, including without limitation software licensed pursuant to “shrink-wrap”
and “click-wrap” licenses.




          “Order” means any order, injunction, judgment, decision, decree, ruling, writ,
assessment or arbitration award of a Governmental Body.




          “Ordinary Course of Business” means the ordinary and usual course of the Business,
consistent with past practices (including with respect to quantity and frequency).




          “Permits” means any approvals, authorizations, consents, licenses, permits or
certificates of a Governmental Body.




          “Permitted Exceptions” means (i) all defects, exceptions, restrictions, easements,
rights of way and encumbrances disclosed in public records or in policies of, or commitments




4









 







for,
title insurance and/or plats or surveys which have been made available to Purchaser; (ii) statutory
liens for current Taxes, assessments or other governmental charges not yet delinquent or the amount
or validity of which is being contested in good faith by appropriate proceedings, provided an
appropriate reserve is established therefor on the Financial Statements or the Closing Date
Statement; (iii) landlords’, mechanics’, carriers’, workers’, repairers’ and similar Liens arising
by operation of law and/or incurred in the Ordinary Course of Business; (iv) zoning, entitlement
and other land use and environmental regulations by any Governmental Body; (v) title of a lessor
under a capital or operating lease; and (vi) such other imperfections in title and other Liens
which would not, individually or in the aggregate, reasonably be expected to materially detract
from the value, or materially impair the use, of such property as it presently used.




          “Person” means any individual, corporation, partnership, firm, joint venture,
association, joint-stock company, limited liability company, limited liability partnership, labor
union, trust, unincorporated organization, Governmental Body or other entity.




          “Post-Closing Tax Period” shall mean any taxable period beginning after the Closing
Date and, with respect to any Straddle Period, the portion of such Straddle Period beginning after
the Closing Date.




          “Pre-Closing Tax Period” shall mean any taxable period ending on or before the Closing
Date and, with respect to any Straddle Period, the portion of such Straddle Period ending on the
Closing Date.




          “Products” means all products or services sold, distributed or otherwise disposed of
by Seller or any of its Subsidiaries in connection with the Business, and all products or service
offerings in development for the purpose of being sold, distributed or otherwise disposed of in
connection with the Business.




          “Rebate” means all rebates granted or accrued or committed to be granted or accrued by
Seller or any Subsidiary to or for the benefit of any customer of the Business, including any
amounts prepaid, paid or credited, or committed to be
prepaid, paid or credited, including in connection with any volume discount, price protection,
price reduction avoidance, prepaid price reduction, contract extension or similar arrangement.




          “Release” means any release, spill, emission, leaking, pumping, pouring, escaping,
dumping, injection, deposit, disposal, discharge, dispersal, migration or leaching into the
environment, including, without limitation, the abandonment or disposal of barrels, containers or
other receptacles.




          “Remedial Action” means all actions required by Environmental Laws to clean up,
remove, treat or address any Hazardous Material in the environment at levels exceeding those
allowed by applicable Environmental Laws, including pre-remedial studies and investigations or
post-remedial monitoring and care.




          “Representative” of any Person means such Person’s officers, directors, employees,
agents, accountants, counsel, advisors, consultants or other representatives.




5









 








          “Retained Subsidiaries” means the Subsidiaries other than the Transferred
Subsidiaries.




          “Software” means any and all (i) computer programs, including any and all software
implementations of algorithms, models and methodologies, whether in source code or object code,
(ii) databases and compilations, including any and all data and collections of data, whether
machine readable or otherwise, (iii) descriptions, flow-charts and other work product used to
design, plan, organize and develop any of the foregoing, screens, user interfaces, report formats,
firmware, development tools, templates, menus, buttons and icons and (iv) all documentation
including user manuals and other training documentation related to any of the foregoing.




          “Straddle Period” shall mean any taxable period that begins on or before and ends
after the Closing Date.




          “Subsidiaries” means the entities set forth on Schedule 5.3(a).




          “Tangible Personal Property” means furniture, fixtures, mobile and immobile equipment,
machinery, vehicles, supplies, inventories, materials, apparatus, tools, implements, appliances,
computers, servers, communications and networking equipment, office equipment, parts and supplies
and other tangible personal property of every kind and description.




          “Target Working Capital” shall mean an amount equal to $48,319,167.00.




          “Tax” or “Taxes” shall mean any taxes of any kind, including those measured
on, measured by or referred to as, income, alternative or add-on minimum, gross receipts, escheat,
capital, capital gains, sales, use, ad valorem, franchise, profits, license, transfer, withholding,
distribution, payroll, employment,
social, excise, severance, stamp, occupation, premium, goods and services, value added,
property, environmental or windfall profits taxes, customs, duties or similar fees, assessments or
charges, together with any surcharge, interest and any penalties, additions to tax or additional
amounts (including any interest thereon) imposed by any Governmental Body.




          “Tax Authority” means the Internal Revenue Service and any other domestic or foreign
Governmental Body responsible for the administration or collection of any Taxes.




          “Tax Laws” means all Laws relating to Taxes.




          “Tax Returns” shall mean all reports, declarations of estimated Tax, claims for
refund, withholding Tax returns, information statements and returns which have been filed or which
are required to be filed with a Tax Authority in connection with any Taxes, including any schedule
or attachment thereto, and including any amendment thereof.




          “Technology” means, collectively, all designs, formulae, algorithms, procedures,
methods, techniques, know-how, research and development, technical data, programs, subroutines,
tools, materials, specifications, processes, inventions (whether patentable or unpatentable and
whether or not reduced to practice), apparatus, creations, improvements, works of authorship and
other similar materials, and all recordings, graphs, drawings, reports, analyses,




6









 







and other
writings, and other tangible embodiments of the foregoing, in any form whether or not specifically
listed herein, and all related technology.




          “Transaction Documents” means each agreement, document, instrument or certificate
contemplated by this Agreement or to be executed by any party to this Agreement in connection with
the consummation of the transactions contemplated by this Agreement.




          1.2 Terms Defined Elsewhere in this Agreement. For purposes of this Agreement, the following terms have meanings set forth in the sections
indicated:




	 	 	 
	Term	 	Section
	338 Election
	 	7.10(d)
	401(k) Plan
	 	5.12(c)
	Accounts Payable
	 	2.3(a)
	Accounts Receivable
	 	2.1(i)
	Adverse Post-Closing Tax Proceeding
	 	7.10(a)
	Adverse Pre-Closing Tax Proceeding
	 	7.10(a)
	Affiliate
	 	1.1
	Agreement
	 	Preamble
	Allocation Schedule
	 	7.10(d)
	Annual Financial Statements
	 	5.4(a)
	Assets
	 	2.1
	Assigned Agreements
	 	2.1(e)
	Assumed Liabilities
	 	2.3
	Balance Sheet Date
	 	5.4(a)
	Benefit Plans
	 	5.12(a)
	Bill of Sale
	 	2.5(a)
	Books and Records
	 	2.1(h)
	Business
	 	Recitals
	Business Balance Sheet
	 	5.4(a)
	Business Day
	 	1.1
	Business Employee
	 	1.1
	Business Intellectual Property
	 	1.1
	CableTech Business
	 	2.2(h)
	Canada Employees
	 	5.13(c)
	Canada Non-Competition Covenant
	 	7.13(a)(i)
	Canadian Purchaser
	 	1.1
	Canadian Seller
	 	1.1
	Cap
	 	9.2(a)(ii)
	Capital Leases
	 	5.11(a)(xv)
	Clearance Certificate
	 	7.10(e)
	Closing
	 	4.1
	Closing Date
	 	4.1
	Closing Date Statement
	 	3.1(b)(ii)
	Closing Date Working Capital
	 	3.1(b)(ii)
	COBRA
	 	5.12(h)






7









 






			
	Term	 	Section
	Code
	 	1.1
	Concord Facility
	 	2.2(h)
	Confidential Information
	 	1.1
	Confidentiality Agreement
	 	7.5(a)
	Consent
	 	5.2(b)
	Contract
	 	1.1
	Copyrights
	 	1.1
	Deductible
	 	9.2(a)(i)
	Draft Transfer Report
	 	7.8(g)(i)
	Environmental Law
	 	1.1
	Environmental Permits
	 	5.16(a)
	Estimated Statement
	 	3.1(b)(i)
	Estimated Working Capital
	 	3.1(b)(i)
	Excluded Assets
	 	2.2
	Excluded Claim
	 	9.3(c)(i)
	Excluded Liabilities
	 	2.4
	Final Determination
	 	9.3(c)
	Final Working Capital
	 	3.1(b)(v)
	Financial Statements
	 	5.4(a)
	Foreign Benefit Plan
	 	5.12(h)
	Foreign Transferred Subsidiaries
	 	5.7(f)
	GAAP
	 	1.1
	General Assignment
	 	2.5(a)
	Governmental Body
	 	1.1
	Hazardous Material
	 	1.1
	HSR Act
	 	1.1
	Independent Accountants
	 	7.8(g)(i)
	Independent Accounting Firm
	 	3.1(b)(iii)(2)
	In-Licensed IP
	 	1.1
	In-Licenses
	 	5.10(f)
	Instruments of Assignment
	 	2.5(a)
	Instruments of Assumption
	 	2.5(b)
	Intellectual Property
	 	1.1
	Interim Financial Statements
	 	5.4(a)
	Inventory
	 	2.1(j)
	IRS
	 	1.1
	KERP
	 	7.8(d)
	Knowledge of Seller
	 	1.1
	Law
	 	1.1
	Lease Assignments
	 	2.5(a)
	Leased Real Property
	 	2.1(f)
	Legal Proceeding
	 	1.1
	Liabilities
	 	1.1
	Lien
	 	1.1
	Losses
	 	9.1(a)
	Marks
	 	1.1






8









 






			
	Term	 	Section
	Material Adverse Effect
	 	1.1
	Material Contracts
	 	5.11(a)
	NDAs
	 	1.1
	Noncompetition Period
	 	7.13(a)(i)
	Off-the-Shelf Software
	 	1.1
	Order
	 	1.1
	Ordinary Course of Business
	 	1.1
	Other Instruments
	 	2.5(a)
	Owned Properties
	 	5.8(a)
	Owned Property
	 	5.8(a)
	Parent
	 	Preamble
	Parent Plans
	 	5.12(a)
	Patent Assignment
	 	2.5(a)
	Patents
	 	1.1
	Permits
	 	1.1
	Permitted Exceptions
	 	1.1
	Person
	 	1.1
	Post-Closing Tax Period
	 	1.1
	Pre-Closing Tax Period
	 	1.1
	Pre-Closing Tax Proceeding
	 	7.10(a)
	Preliminary Purchase Price
	 	3.1(a)
	Products
	 	1.1
	Purchase Price
	 	3.1(b)(vi)
	Purchaser
	 	Preamble
	Purchaser Canadian Plan
	 	7.8(g)(i)
	Purchaser Indemnified Parties
	 	9.1(a)
	Purchaser Plans
	 	7.8(b)
	Real Property Lease
	 	5.8(b)
	Real Property Leases
	 	5.8(b)
	Rebate
	 	1.1
	Registered IP
	 	5.10(c)
	Release
	 	1.1
	Remaining Concord Assets
	 	5.9
	Remedial Action
	 	1.1
	Representative
	 	1.1
	Retained Aviation Products
	 	5.19
	Retained Subsidiaries
	 	1.1
	Securities Act
	 	6.5
	Seller
	 	Preamble
	Seller Acquisition Date
	 	5.4(b)
	Seller Canadian Plan
	 	7.8(g)(i)
	Seller Indemnified Parties
	 	9.1(b)
	Seller Marks
	 	7.11(a)
	Software
	 	1.1
	Stock Powers
	 	2.5(a)
	Straddle Period
	 	1.1






9









 






			
	Term	 	Section
	Subsidiaries
	 	1.1
	Superintendent
	 	7.8(g)(i)
	Supply Agreement
	 	7.9(a)
	Survival Period
	 	10.1
	Tangible Personal Property
	 	1.1
	Target Working Capital
	 	1.1
	Tax
	 	1.1
	Tax Authority
	 	1.1
	Tax Laws
	 	1.1
	Tax Proceeding
	 	7.10(a)
	Tax Returns
	 	1.1
	Taxes
	 	1.1
	Technology
	 	1.1
	Third Party Claim
	 	9.3(b)
	Trademark Assignment
	 	2.5(a)
	Transaction Documents
	 	1.1
	Transfer Report
	 	7.8(g)(i)
	Transfer Taxes
	 	7.10(d)
	Transferred Benefit Plans
	 	5.12(a)
	Transferred Employees
	 	7.8(a)
	Transferred Marks
	 	7.11(a)
	Transferred Securities
	 	2.1(b)
	Transferred Subsidiaries
	 	2.1(b)
	Transferred Subsidiary
	 	2.1(b)
	Transferred Subsidiary Tax Returns
	 	7.10(b)
	Transition Services Agreement
	 	7.9(b)
	Undertaking
	 	2.5(b)
	WARN Act
	 	5.13(b)
	Working Capital
	 	3.1(b)(i)






          1.3 Other Definitional and Interpretive Matters. Unless otherwise expressly provided, for purposes of this Agreement, the following rules of
interpretation shall apply:




     (a) Calculation of Time Periods. When calculating the period of time before which,
within which or following which any act is to be done or step taken pursuant to this Agreement, the
date that is the reference date in calculating such period shall be excluded. If the last day of
such period is a non-Business Day, the period in question shall end on the next succeeding Business
Day.



     (b) Dollars. Any reference in this Agreement to $ shall mean U.S. dollars, and any
amounts denominated in U.S. dollars shall mean the amount set forth or the equivalent of such
amount in any other currency or currencies.



     (c) Headings. The headings contained in this Agreement and the Schedules hereto are
for purposes of convenience only and will not affect the meaning or interpretation of this
Agreement or any such Schedule. Unless otherwise expressly indicated, any reference in this
Agreement (including any Schedule hereto) to an “Article,” “Section,” “subsection,”



10









 




“paragraph” or
“subparagraph” followed by a number or letter or combination of the two will be a reference to the
particular Article, Section, subsection, paragraph or subparagraph of this Agreement bearing such
number, letter or combination thereof.




     (d) Hereof and Herein. The terms “hereof,” “herein,” “hereunder” and comparable terms
refer, unless otherwise expressly indicated, to this Agreement as a whole and not to any particular
Article, Section, subsection, paragraph, subparagraph or other subdivision hereof or any Schedule,
Exhibit or other attachment hereto.



     (e) Including. The terms “include,” “includes” and “including” will be deemed to be
followed by the words “without limitation.”



     (f) Gender and Number. Whenever the context so requires, the singular number will
include the plural and the plural will include the singular, and the gender of any pronoun will
include the other gender or neuter, as applicable.



     (g) Statutes and Regulations. Any reference in this Agreement to a particular
statute, regulation or code (including any specific provision thereof) includes all regulations and
rules thereunder, all amendments thereto in force at the applicable time (including amendments to
provision references).



          1.4 Construction. The parties hereto have participated jointly in the negotiation and drafting of this
Agreement and, in the event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as jointly drafted by the parties hereto and no presumption or burden
of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision
of this Agreement.




ARTICLE II




TRANSFER OF ASSETS AND LIABILITIES




          2.1 Assets to be Sold. On the terms and subject to the conditions of this Agreement, at the Closing, Seller shall
and shall cause the Retained Subsidiaries to sell, convey, assign, transfer and deliver to
Purchaser, and Purchaser shall purchase, acquire and accept from Seller and the Retained
Subsidiaries, all of Seller’s and the Subsidiaries’ right, title and interest in and to all of the
properties, assets, rights and claims of Seller and the Subsidiaries used or held for use primarily
in the Business (other than Excluded Assets), of every kind, character and description, whether
tangible, intangible, personal or mixed and wherever located, whether or not carried on the books
of Seller and the Subsidiaries (collectively, the “Assets”), free and clear of all
liabilities, obligations and Liens, except the Assumed Liabilities and Permitted Exceptions,
including, without limitation, the following:




     (a) All of the Business Intellectual Property;



     (b) All of the capital stock or other equity interests (collectively, the “Transferred
Securities”) of each of Noma O.P., Inc., a Delaware corporation, Noma de Reynosa, S.A. de C.V.,
a company organized and existing under the laws of Mexico, GenTek Technology Pvt. Ltd., a company
organized and existing under the laws of India, and Sistemas y Conexiones



11









 




Integradas, S.A. de C.V.,
a company organized and existing under the laws of Mexico (each, a “Transferred Subsidiary”
and, collectively, the “Transferred Subsidiaries”);




     (c) All Tangible Personal Property owned, leased or held for use by Seller or a Subsidiary and
located at the Leased Real Property or the Owned Properties (other than the Remaining Concord
Assets), in the possession or control of Transferred Employees for use primarily in the operation
of the Business, or otherwise used or held for use primarily in connection with the Business, a
schedule of which Tangible Personal Property used in the Business and carried on the books of
account of the Business with a value in excess of $50,000 is set forth on Schedule 2.1(c);



     (d) All claims, deposits, prepayments and similar items arising primarily out of, or relating
primarily to, the Business, the Assets or the Assumed Liabilities, and the full benefit of any and
all security for such items;



     (e) All Contracts to which any Seller or a Subsidiary is a party and which arise primarily out
of or relate primarily to the Assets (including Capital Leases), the Assumed
Liabilities or the conduct of the Business (collectively, the “Assigned Agreements”),
including all rights to receive goods and services purchased pursuant to such Contracts and all
claims and rights to take any other actions arising out of or related to such Contracts or in
respect thereof;



     (f) The Real Property Leases set forth on Schedule 2.1(f)(i) (the “Leased Real
Property”) and the Owned Properties set forth on Schedule 2.1(f)(ii) and, in each case,
all buildings, structures and other improvements situated thereon;



     (g) To the extent transferable, all Permits of Seller and the Subsidiaries used or held for
use primarily in connection with the ownership, lease or operation of the Assets or the conduct of
the Business;



     (h) Subject to Section 2.2(c), originals or true copies of all books, records,
agreements, invoices, correspondence, files and other documents (whether on paper, computer
diskette, tape or other storage media) prepared for or associated primarily with the Assets, the
Assumed Liabilities or the operation of the Business (“Books and Records”), including, but
not limited to, stock records, minute books, other corporate records, property records, production
records, purchase and sales records, credit data, marketing, advertising and promotional materials,
sales literature, personnel and payroll records pertaining to Transferred Employees (to the extent
not prohibited under applicable Law), accounting records, financial reports, Tax Returns in the
possession or control of Seller or a Subsidiary (other than Tax Returns of or that include (where
such return is prepared on a consolidated, combined, unitary or affiliated basis) Seller or any
Subsidiary and income Tax Returns of any Retained Subsidiary), fixed asset lists, customer, vendor,
supplier, distributor and sales prospect lists, records and information, parts lists, manuals,
technical and repair data, correspondence, files and any similar items;



     (i) All billed and unbilled accounts and notes receivable to the extent arising out of or
associated with the operation of the Business or the Assets (“Accounts Receivable”), and
the full benefit of any and all security for such Accounts Receivable and any unpaid financing
charges accrued thereon;



12









 





     (j) All raw material inventories, work-in-process, consignment inventory, inventory being
tolled and finished products, in any case, which are located at the Leased Real Property or the
Owned Properties, in transit to the Leased Real Property or the Owned Properties, in the possession
or control of any customer of the Business, or located at any location set forth on Schedule
2.1(j) (the “Inventory”);



     (k) Subject to Section 2.2(g), all information systems, hardware, telephone systems,
software systems, database and database systems used or held for use primarily in the conduct or
operation of the Business and any and all rights thereunder;



     (l) All express or implied warranties, representations or guarantees made by suppliers
furnishing goods (including the Tangible Personal Property) or services to Seller or any
Subsidiary used primarily in the Business, including warranties, representations, guarantees
or other obligations related to product support or maintenance;



     (m) Subject to Section 2.2(d), all rights, claims and causes of action against third
parties to the extent relating to the Assets or the operation of the Business, including, but not
limited to, all such claims against customers;



     (n) Any assets relating to the Transferred Benefit Plans as provided in Section 7.8;



     (o) All insurance proceeds received by Parent, Seller or any of their subsidiaries to the
extent related to the Business (other than the Excluded Assets and the Excluded Liabilities) or any
Assets as a result of any damage or claim occurring between the date of this Agreement and the
Closing Date and any rights, claims or causes of action existing or arising primarily in respect of
the Business (other than the Excluded Assets and the Excluded Liabilities) and the Assets (to the
extent such proceeds have not been applied to mitigate such damage or claim);



     (p) All prepaid expenses, including prepaid real estate and ad valorem Taxes, leases and
rentals, to the extent related to the Business, Assets or Assumed Liabilities;



     (q) All stationery, forms, labels, shipping materials, brochures, art work, photographs,
advertising materials and any similar items used or held for use primarily in the Business;



     (r) All goodwill associated with the Business or the Assets; and



     (s) All other properties, assets, rights and claims reflected on the Business Balance Sheet or
accrued after the date thereof and which would reasonably be expected to be reflected thereon if
the Business Balance Sheet were prepared as of the Closing Date, or otherwise used or held for use
primarily in the conduct or operation of the Business, including all properties, assets, rights and
claims included in the definition of Working Capital and reflected on the Closing Date Statement,
but not otherwise described in this Section 2.1.



          2.2 Excluded Assets. Notwithstanding any other provision of this Agreement, the Assets shall not include, and
Seller and the Retained Subsidiaries shall retain all of their right, title and interest in and to,
all of the following properties, assets, rights and claims of Seller and the Subsidiaries
(collectively, the “Excluded Assets”), which shall not be sold, conveyed, assigned,
transferred or delivered to Purchaser:





13









 








     (a) All cash on hand and short-term instruments and all similar types of investments, such as
certificates of deposit, treasury bills and other marketable securities as of the Closing Date
(other than any of the foregoing held by any Transferred Subsidiary as of the Closing Date);



     (b) All insurance policies and bonds of Parent, Seller or any of their subsidiaries or
otherwise (other than any such insurance policies and bonds maintained by the Transferred
Subsidiaries), including, except as set forth in Section 2.1(o), all rights, claims and
causes of action of every nature and description under or arising out of such insurance policies;



     (c) All original Books and Records that would otherwise constitute Assets but for the fact
that Seller or a Retained Subsidiary is required to retain such original books and records pursuant
to applicable Law (in which case copies of such Books and Records shall be included in the Assets);



     (d) All claims, rights, interests and proceeds with respect to Tax refunds relating to any
Pre-Closing Period as set forth in Section 7.10;



     (e) All assets of the Business sold or otherwise disposed of not in violation of the terms of
this Agreement during the period from the date of this Agreement until the Closing Date;



     (f) The minute books, incorporation documents, stock transfer, and Tax Returns of or that
include (where such return is prepared on a consolidated, combined, unitary or affiliated basis)
the Seller or any Subsidiary and the income Tax Returns of any Retained Subsidiary or similar
related corporate records of Seller and the Retained Subsidiaries;



     (g) The assets being provided to Purchaser pursuant to the Transition Services Agreement;



     (h) The Owned Real Property located in Concord, Ontario, and all buildings, structures and
other improvements thereon (the “Concord Facility”), and the Remaining Concord Assets;



     (i) All of the properties, assets, rights and claims used or held for use primarily in
Seller’s insulated wire business located in Mineral Wells, Texas (the “CableTech Business”), and all other assets located in Mineral Wells, Texas that are used or held for use primarily in
any business other than the Business;



     (j) All equity interests held by Seller or any Retained Subsidiary (other than equity
interests in the Transferred Subsidiaries);



     (k) All rights, claims and causes of action of Seller or any Subsidiary (i) described on
Schedule 2.2(k), or (ii) against any third party arising out of any facts or circumstances
relating to any claim by a third party against Seller that constitutes an Excluded Liability;



     (l) All Benefit Plans, except Transferred Benefit Plans, and all assets related thereto; and



14









 





     (m) All assets, rights and properties listed on Schedule 2.2(m).



          2.3 Assumed Liabilities. Upon the terms and subject to the conditions of this Agreement, at the Closing, Purchaser
shall assume only the following Liabilities of Seller and the Subsidiaries (collectively, the
“Assumed Liabilities”):




     (a) All accounts payable of the Business as of the Closing (to the extent that such accounts
payable relate to the Business and other than any accounts payable to Seller or any Affiliate of
Seller) to the extent reflected in Working Capital as of the Closing Date (“Accounts
Payable”);



     (b) All accrued expenses of the Business as of the Closing (to the extent such accrued
expenses relate to the Business) to the extent reflected in Working Capital as of the Closing Date,
including, for the avoidance of doubt, liabilities for non-income Taxes in the amount reflected in
Working Capital as of the Closing Date;



     (c) All obligations of Seller and the Subsidiaries under the Assigned Agreements, to the
extent such obligations (i) were not due to have been satisfied or discharged at or prior to the
Closing, (ii) are reflected on the Closing Date Statement, or (iii) are not required to be
reflected on the Closing Date Statement and have not arisen as a result of a default or breach of
such Assigned Agreement or this Agreement by Seller or any Subsidiary;



     (d) All Permitted Exceptions to which the Assets are subject;



     (e) The Liabilities assumed pursuant to Section 7.8 (including any Liabilities
resulting from the failure of Purchaser to comply with Section 7.8);



     (f) The Liabilities listed on Schedule 5.11(b)(1); and



     (g) All other Liabilities of the Business arising after the Closing.



          2.4 Excluded Liabilities. Notwithstanding any other provision in this Agreement, Purchaser is assuming only the
Assumed Liabilities and is not assuming any other Liability of Seller or the Subsidiaries or their
respective Affiliates of whatever nature, whether presently in existence or arising hereafter (all
such liabilities and obligations not being assumed being herein referred to as the “Excluded
Liabilities”), and, notwithstanding anything to the contrary, the Assumed Liabilities shall not
include for the purposes of this Agreement, without limitation, any of the following:




     (a) Except as set forth in Section 7.12 and except for indebtedness under Capital
Leases, any indebtedness of Seller or any of the Subsidiaries;



     (b) Any Liabilities to the extent arising out of or relating to an Excluded Asset;



     (c) Any Liabilities to the extent arising from or as a result of the conduct of any business
of Seller or any of the Subsidiaries other than the Business;



15









 





     (d) Liabilities with respect to any Legal Proceedings (including all Legal Proceedings set
forth on Schedules 2.2(k) and 5.14);



     (e) Except for any non-income Taxes in the amount assumed by Purchaser pursuant to Section
2.3(b) and any Transfer Taxes to be paid by Purchaser pursuant to Section 7.10(d)
hereof, (A) any Liabilities of Seller or any Affiliate of Seller (other than the Transferred
Subsidiaries) for the Taxes of Seller or its Affiliates (other than the Transferred Subsidiaries)
and (B) all Taxes of any Person imposed on Seller or any of its Affiliates (other than the
Transferred Subsidiaries) as a result of being a member of any consolidated, combined, affiliated
or unitary Tax group or as a transferee or successor, by contract, or otherwise;



     (f) Any Liabilities and expenses for any accounting, legal, investment banking, brokerage or
similar fees or expenses incurred by Seller or any of its Affiliates in connection with the
negotiation and preparation of this Agreement and each of the Transaction Documents and the
consummation of the transactions contemplated hereby and thereby;



     (g) Any Liabilities relating to Business Employees of Seller and the Subsidiaries with respect
to their employment or service relationship with Seller and/or its Subsidiaries, whether or not
arising under any Benefit Plan, other than a Transferred Benefit Plan as provided in Section
7.8, for periods ending on or prior to the Closing Date, other than those expressly assumed by
Purchaser pursuant to this Agreement or which are reflected in Working Capital as of the Closing
Date;



     (h) any Liabilities relating to the design, manufacture, marketing, sale, distribution or
other disposition of Retained Aviation Products, including any obligation to maintain any insurance
with respect thereto;



     (i) Any Liabilities relating to any stock option or other equity-based award granted by Parent
or any of its Affiliates to any Transferred Employee;



     (j) Any Liabilities relating to any bonus that may become payable to a Transferred Employee as
a result of the transactions contemplated by this Agreement (other than any such bonus agreement
between Purchaser or any of its Affiliates and such Transferred Employee);



     (k) Any Liabilities relating to any claim for personal injury and/or property damage to the
extent arising out of pre-Closing occurrences or the operation of the Business or the sale of
Products prior to the Closing Date and based on product liability, strict liability or other
similar theories of recovery, but excluding any Liabilities arising under worker’s compensation
legislation to the extent such Liabilities would be covered by worker’s compensation insurance
coverage required by applicable Law to be maintained by Purchaser;



     (l) Any Liabilities of Seller and the Subsidiaries existing as of the Closing Date which
should have been reflected on the Business Balance Sheet or the Closing Date Statement and which
are not so reflected, unless they are Assumed Liabilities;



     (m) Any Liabilities (including, without limitation, any severance, restructuring, relocation,
and environmental and clean up costs) to the extent arising from or related to the closing of the
Concord Facility;



16









 





     (n) Any Liabilities arising from or related to the sale of the facility located in
Stouffville, Ontario to Southwire Canada Company, including all Liabilities arising under all
Contracts entered into in connection with such sale;



     (o) Subject to Section 7.8, any Liabilities arising under the WARN Act and other
similar applicable Laws due to any actions taken by Seller or any Subsidiary prior to the Closing
Date with regard to any site of employment, facility, operating unit or employee affected by this
Agreement (including the Concord Facility), except for any Liability resulting from any action
taken by Purchaser; and



     (p) Any Liabilities or obligations owed to Parent, Seller or any of their respective
Affiliates to the extent not reflected in Working Capital as of the Closing Date, other than
pursuant to the Transaction Documents and the Assigned Agreements.



          2.5 Transfer of Assets and Assumption of Liabilities.




     (a) At the Closing, Seller and the Subsidiaries shall effectuate the sale, conveyance,
assignment, transfer and delivery of the Assets to Purchaser by delivering to Purchaser or its
designees each of the following: (i) a duly executed bill of sale, in a customary form as shall be
mutually agreed to by Seller and Purchaser (the “Bill of Sale”); (ii) a duly executed
assignment and assumption agreement relating to the Assigned Agreements, Permits and other Assets
held by Seller and the Retained Subsidiaries, in a customary form as shall be mutually agreed to by
Seller and Purchaser (the “General Assignment”); (iii) a duly executed assignment of Marks
with respect to the Marks included in the Business Intellectual Property and held by Seller and the
Retained Subsidiaries, in a customary form as shall be mutually agreed to by Seller and Purchaser
(the “Trademark Assignment”); (iv) a duly executed assignment of Patents with respect to
the Patents included in the Business Intellectual Property and held by Seller and the Retained
Subsidiaries, in a customary form as shall be mutually agreed to by Seller and Purchaser (the
“Patent Assignment”); (v) certificates representing the Transferred Securities, duly
endorsed to Purchaser and/or its designee(s) (it being understood and agreed that Purchaser may
designate any one or more Person(s), whether or not an Affiliate, to acquire any portion of the
Transferred Securities by providing written notice of such designation to Seller not less than
three (3) Business Days prior to the Closing Date and by certifying that Purchaser’s
representations and warranties set forth in Section 6.5 hereof also apply to, and are true and
accurate in all respects with regard to, such designee(s); provided, that no such designation shall
relieve Purchaser of any obligation hereunder) or accompanied by stock powers duly executed in
blank or duly executed instruments of transfer with appropriate stock transfer tax stamps, if any,
affixed, and any other documents, in form and substance satisfactory to Purchaser, that are
necessary to transfer good and valid title to such capital stock or other equity interest of the
Transferred Subsidiaries to Purchaser and/or its designee(s) (collectively, the “Stock
Powers”); (vi) a duly executed assignment and assumption of lease for each of the Leased Real
Properties (collectively, the “Lease Assignments”); and (vii) such other good and
sufficient instruments of conveyance and transfer (collectively, the “Other Instruments”
and, collectively with the Bill of Sale, the General Assignment, the Trademark Assignment, the
Patent Assignment, the Stock Powers, and the Lease Assignments, the “Instruments of
Assignment”) as are reasonably necessary to vest in Purchaser good and valid title to the
Assets,
free and clear of all liabilities, obligations, claims and Liens except the Assumed
Liabilities and Permitted Exceptions.



17









 





     (b) At the Closing, Purchaser shall deliver to Seller and the Subsidiaries a duly executed
undertaking, in a customary form as shall be mutually agreed to by Seller and Purchaser (the
“Undertaking”), whereby Purchaser shall assume and agree to perform, pay, or discharge,
when due, the Assumed Liabilities, effective as of the Closing, and such other instruments,
documents or agreements (collectively, the “Instruments of Assumption”) as are reasonably
necessary to evidence Purchaser’s assumption of and agreement to pay and discharge the Assumed
Liabilities.



          2.6 Non-assignable Contracts.




     (a) To the extent that any Assigned Agreement is not capable of being assigned to Purchaser at
the Closing without the Consent of any other party thereto or any Person, or if such assignment or
attempted assignment would constitute a breach thereof, or a violation of any applicable Law, this
Agreement shall not constitute an assignment or an attempted assignment thereof, unless and until
such Consent has been obtained.



     (b) In the event that any Consent referred to in Section 2.6(a) has not been obtained
prior to the Closing, at Seller’s sole cost and expense, Seller shall use its commercially
reasonable efforts, and Purchaser and Parent shall cooperate with Seller, to obtain each and every
such Consent and to resolve the impracticalities of assignment referred to in Section
2.6(a) after the Closing.



     (c) To the extent that the Consents referred to in Section 2.6(a) have not been
obtained prior to the Closing, until the impracticalities of assignment referred to in Section
2.6(a) hereof are resolved, Seller and the applicable Retained Subsidiary shall use their
commercially reasonable efforts to (i) cooperate with Purchaser in any reasonable and lawful
arrangement designed to provide Purchaser the benefits of any Assigned Agreement referred to in
Section 2.6(a), and (ii) enforce, for the account and benefit of Purchaser, any and all
rights of Seller and the applicable Retained Subsidiary arising from the Assigned Agreements
referred to in Section 2.6(a) against all other parties thereto (including the right to
elect to terminate in accordance with the terms thereof on the advice of Purchaser). To the extent
that Purchaser is provided the benefits pursuant to this Section 2.6(c) of any Assigned
Agreement, Purchaser shall perform, on behalf of Seller and the applicable Retained Subsidiary, for
the benefit of all other parties thereto, the obligations of Seller and the applicable Retained
Subsidiary thereunder or in connection therewith (and in the event that any action by Purchaser
results in any material default thereunder or in connection therewith, and any such material
default results in the termination of such Assigned Agreement, Purchaser shall no longer be
entitled to receive the benefits of such Assigned Agreement). Any failure by Purchaser to perform
the obligations of Seller or the applicable Retained Subsidiary under any such Assigned Agreement
or in connection therewith shall constitute a breach by Purchaser of its covenants under this
Section 2.6(c). Nothing contained in this Section 2.6 shall constitute a waiver
of, or impair, Purchaser’s rights under Section 8.1 or ARTICLE IX.



          2.7 Payments Post-Closing.




     (a) If, following the Closing Date, Seller or any of its Affiliates receives any payment or
other proceeds (including the benefit of a mistaken payment) relating to any Assets or



18









 




otherwise
relating to the conduct or operation of the Business after Closing (excluding any payment or other
proceeds relating to or included in the Excluded Assets and excluding refunds for Taxes that are
allocable to a Pre-Closing Tax Period), including with respect to any Accounts Receivable or
Inventory purchased by Purchaser hereunder, Seller shall, and shall cause its Affiliates to,
promptly remit to Purchaser the amount of any such payments or other proceeds. On the last day of
each month during the six (6) month period beginning on the Closing Date, Seller shall report to
Purchaser the amount of all such payments or proceeds so received.




     (b) If, following the Closing Date, Purchaser or any of its Affiliates receives any payment or
other proceeds (including the benefit of a mistaken payment) relating to any Excluded Assets, the
conduct or operation of the Business prior to Closing (excluding any payment or other proceeds
relating to or included in the Assets), or otherwise relating to the conduct or operation of Seller
and its Subsidiaries other than the Business, Purchaser shall, and shall cause its Affiliates to,
promptly remit to Seller the amount of any such payments or other proceeds. On the last day of
each month during the six (6) month period beginning on the Closing Date, Purchaser shall report to
Seller the amount of all such payments or proceeds so received.



          2.8 Withholding. Purchaser (or any other Person responsible for withholding any amount with respect to any
payment made under this Agreement) shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement such amounts as are required to be deducted and
withheld with respect to the making of such payment under the Code, or any provision of state,
local or foreign Tax Law (including the Tax Laws of Mexico and India). Purchaser shall timely
remit or deposit all withheld amounts with the applicable Governmental Body and provide Seller or
the applicable Retained Subsidiary with any return or other document required to be prepared with
respect to such deposit or remittance or other evidence of deposit or remittance acceptable to
Seller or such Retained Subsidiary, as the case may be. To the extent that amounts are so
deducted, withheld and timely and appropriately remitted or deposited with the relevant
Governmental Body, such withheld amounts shall be treated for all purposes of this Agreement as
having been paid to the Person in respect of which such deduction and withholding was made.




ARTICLE III




CONSIDERATION




          3.1 Consideration.




     (a) Preliminary Purchase Price. The preliminary purchase price for the Assets and the
covenant not to compete contained in Section 7.13 (Non-Competition) and in the Canada
Non-Competition Covenant shall be an amount of cash equal to Seventy-Five Million Dollars
($75,000,000), less (x) the amount of any indebtedness of
the Transferred Subsidiaries
(other than any indebtedness owed by a Transferred Subsidiary to another Transferred Subsidiary)
and indebtedness under Capital Leases as of the Closing Date, plus (y) the amount of cash
(not to exceed One Million Five Hundred Thousand Dollars ($1,500,000)) of the Transferred



19









 





Subsidiaries as of the Closing Date (the “Preliminary Purchase Price”). On the Closing
Date, Purchaser shall pay the Preliminary Purchase Price, as adjusted pursuant to Section
3.1(b)(i), to Seller in cash, which shall be paid by wire transfer of immediately available
United States funds into an account or accounts designated by Seller in writing not less than three
(3) Business Days prior to the Closing Date. For Tax purposes, the Preliminary Purchase Price and
the adjustment to the Preliminary Purchase Price shall be allocated in accordance with Section
7.10(f).




     (b) Adjustment of Preliminary Purchase Price. The Preliminary Purchase Price shall be
subject to adjustment as provided in this Section 3.1(b).




     (i) Estimated Statement. As of the close of business on the fifth
(5th) Business Day immediately preceding the Closing Date, Seller will deliver to
Purchaser a statement (the “Estimated Statement”) setting forth (A) Seller’s
reasonable good faith estimate of (i) the sum of (w) Accounts Receivable, net of
applicable reserves (to the extent such reserves are not reflected in clause (ii)
below), (x) prepaid expenses of the Business, (y) Inventory, net of applicable
reserves (to the extent such reserves are not reflected in clause (ii) below), and
(z) other current assets of the Business, minus (ii) the sum of (x) Accounts
Payable, (y) accrued compensation of the Business, and (z) other current liabilities
of the Business (excluding Excluded Liabilities and the current portion of any
indebtedness referred to in clause (x) of Section 3.1(b)), in each case,
calculated as of the Closing Date in accordance with the accounting principles and
methodologies (including GAAP) employed by Seller in preparing the Business Balance
Sheet and those set forth on Schedule 3.1(b) consistently applied (such
amount generally, “Working Capital,” and such amount estimated as of the
Closing Date, the “Estimated Working Capital”), and (B) the calculation of
the Preliminary Purchase Price, as adjusted pursuant to this Section
3.1(b)(i) (including (i) the amount of indebtedness of the Transferred
Subsidiaries (other than any indebtedness owed by a Transferred Subsidiary to
another Transferred Subsidiary) and indebtedness under Capital Leases and (ii) the
amount of cash of the Transferred Subsidiaries, in each case estimated as of the
Closing Date). The Estimated Statement shall be signed by Seller’s Chief Financial
Officer and accompanied by reasonable supporting documentation. Purchaser shall
have the right to review the Estimated Statement and such supporting documentation
or data of Seller and its Subsidiaries as Purchaser may reasonably request. In the
event that Purchaser
does not agree with Seller’s estimate, Seller and Purchaser shall negotiate in
good faith to mutually agree on an acceptable estimate of the Estimated Working
Capital, and Seller shall consider in good faith any proposed comments or changes
that Purchaser may reasonably suggest; provided, however, that Seller’s failure to
include in the Estimated Statement any changes proposed by Purchaser, or the
acceptance by Purchaser of the Estimated Statement, shall not limit or otherwise
affect Purchaser’s remedies under this Agreement, including Purchaser’s right to
include such changes or other changes in the Closing Date Statement, or constitute
an acknowledgment by Purchaser of the accuracy of the Estimated Statement. If the
Estimated Working Capital is less than the Target Working Capital, the Preliminary
Purchase Price payable by Purchaser to Seller at Closing shall be reduced by the
amount of such shortfall,



20









 






and if the Estimated Working Capital is greater than the
Target Working Capital, the Preliminary Purchase Price payable by Purchaser to
Seller at Closing shall be increased by the amount of such excess; provided,
however, that if the amount of such reduction or increase is less than One
Million Dollars ($1,000,000), then for purposes of this Section 3.1(b)(i),
no adjustment shall be made to the Preliminary Purchase Price.




     (ii) Closing Date Statement. No later than sixty (60) calendar days
after the Closing Date, Purchaser shall prepare and deliver to Seller a statement
(the “Closing Date Statement”) of the actual (x) Working Capital as of the
Closing Date (such amount, the “Closing Date Working Capital”), (y) amount
of indebtedness of the Transferred Subsidiaries (other than any indebtedness owed by
a Transferred Subsidiary to another Transferred Subsidiary) and indebtedness under
Capital Leases as of the Closing Date, and (z) amount of cash of the Transferred
Subsidiaries as of the Closing Date, which Closing Date Statement shall be prepared
in accordance with the accounting principles and methodologies (including GAAP)
employed by Seller in preparing the Business Balance Sheet and those set forth on
Schedule 3.1(b) consistently applied. The Closing Date Statement shall be
signed by Purchaser’s Chief Financial Officer and accompanied by reasonable
supporting documentation. Following the Closing, each of Purchaser and Seller shall
give the other party reasonable access at all reasonable times to the properties,
books, records and personnel of the Business for purposes of preparing, reviewing
and resolving any disputes concerning the Closing Date Statement. Seller shall, and
shall use commercially reasonable efforts to cause its accountants to, cooperate
with Purchaser and its accountants to the extent required to enable Purchaser to
prepare the Closing Date Statement in accordance with this Agreement.




     (iii) Disputes.




               (1) Subject to clause (2) of this Section 3.1(b)(iii), the
Closing Date Statement delivered by Purchaser to Seller shall be deemed to
be and shall be final, binding and conclusive on the parties hereto.




               (2) Seller may dispute any amounts reflected on the Closing Date
Statement; provided, however, that Seller shall be deemed to have agreed to
each item or amount set forth in the Closing Date Statement (and waived any
right to dispute the same) unless Seller has notified Purchaser in writing
of each disputed item, specifying the amount thereof in dispute and setting
forth, in reasonable detail, the basis for such dispute, within thirty (30)
calendar days after Purchaser’s delivery of the Closing Date Statement to
Seller. In the event of such a dispute, Seller and Purchaser shall attempt
to reconcile their differences, and any resolution by them as to any
disputed amounts shall be final, binding and conclusive on the parties
hereto; provided, that such amounts shall not be less, with respect to
assets, or more, with respect to liabilities, than the amounts shown in
Purchaser’s calculation delivered pursuant to



21









 






Section 3.1(b)(ii) nor
more, with respect to assets, or less, with respect to liabilities, than the
amounts shown in Seller’s calculation delivered pursuant to this Section
3.1(b)(iii)(2). If Seller and Purchaser are unable to reach a
resolution with such effect within thirty (30) calendar days after receipt
by Purchaser of Seller’s written notice of dispute, Seller and Purchaser
shall submit the items remaining in dispute for resolution to an independent
accounting firm of international reputation mutually acceptable to Purchaser
and Seller (such accounting firm being referred to herein as the
“Independent Accounting Firm”), which shall, within forty five (45)
calendar days after such submission, determine and report to Purchaser and
Seller upon such remaining disputed items, and such report shall be final,
binding and conclusive on the parties hereto. The fees and disbursements of
the Independent Accounting Firm shall be allocated between Seller and
Purchaser in the same proportion that the aggregate amount of such remaining
disputed items so submitted to the Independent Accounting Firm that are
unsuccessfully disputed by each such party (as finally determined by the
Independent Accounting Firm) bears to the total amount of such remaining
disputed items so submitted.




     (iv) Final Closing Date Statement. The Closing Date Statement shall be
deemed final and binding for the purposes of this Section 3.1(b) upon the
earliest of (A) the failure of Seller to notify Purchaser of a dispute within thirty
(30) calendar days of Purchaser’s delivery of the Closing Date Statement to Seller,
(B) the resolution of all disputes, pursuant to Section 3.1(b)(iii)(2), by
Purchaser and Seller and (C) the resolution of all disputes, pursuant to Section
3.1(b)(iii)(2), by the Independent Accounting Firm.




     (v) Purchase Price Adjustment. Within three (3) Business Days after
the Closing Date Statement is deemed final and binding pursuant to Section
3.1(b)(iv) (the Working Capital amount reflected on such final Closing Date
Statement, the “Final Working Capital”), the Preliminary Purchase Price
shall be, if necessary, further adjusted such that Purchaser and Seller receive or
make payments to each other so
that, after taking into account any prior payments under Section
3.1(b)(i), each party receives or makes payments in an amount exactly equal to
the amount that would have been made under Section 3.1(b)(i) if the
Estimated Working Capital had equaled the Final Working Capital and if the amount of
indebtedness and cash reflected on the Estimated Statement had equaled the amount of
indebtedness and cash reflected on such final Closing Date Statement. All payments
to be made under this Section 3.1(b)(v) shall be made on a net basis taking
into account payments received under Section 3.1(b)(i).



     (vi) Payment. If the amount of any adjustment pursuant to clause (v)
above results in an increase in the Preliminary Purchase Price, then Purchaser
shall, within three (3) Business Days after the Closing Date Statement is deemed
final, pay to Seller the amount of such increase by wire transfer of immediately
available funds to the account specified by Seller. If the amount of any adjustment
pursuant to clause (v) above results in a decrease in the Preliminary




22









 






Purchase Price, then Seller shall, within three (3) Business Days after the Closing Date
Statement is deemed final, pay to Purchaser the amount of such decrease by wire
transfer of immediately available funds to the account specified by Purchaser. The
Preliminary Purchase Price as so adjusted by Section 3.1(b), is referred to
herein as the “Purchase Price.” Any payment amount shall bear interest
thereon from the Closing Date to the date of payment at the rate equal to one
percent (1%) above the prime rate of JPMorgan Chase Bank, N.A. on the Closing Date.



ARTICLE IV




CLOSING AND TERMINATION




          4.1 Closing Date. Subject to the satisfaction of the conditions set forth in Sections 8.1 and
8.2 hereof (or the waiver thereof by the party entitled to waive that condition), the
closing of the transactions contemplated by this Agreement (the “Closing”) shall take place
at the offices of O’Melveny & Myers LLP located at Embarcadero Center West, 275 Battery Street,
26th Floor, San Francisco, California 94111-3305 (or at such other place as the parties may
designate in writing) at 10:00 a.m. (San Francisco time) on a date to be specified by the parties,
which date shall be no later than the second Business Day after the satisfaction or waiver of each
condition to the Closing set forth in Article VIII (other than conditions that by their
nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such
conditions), unless another time or date, or both, are agreed to in writing by the parties hereto.
The date on which the Closing shall be held is referred to in this Agreement as the “Closing
Date.”




          4.2 Closing Deliveries. At the Closing:




     (a) Seller and, where applicable, Parent or the applicable Subsidiary shall deliver or cause
to be delivered to Purchaser:




     (i) a receipt for the Preliminary Purchase Price;




     (ii) the Bill of Sale;




     (iii) the General Assignment;




     (iv) the Trademark Assignment;




     (v) the Patent Assignment;




     (vi) all certificates representing the Transferred Securities, duly endorsed or
accompanied by the Stock Powers duly executed in blank with appropriate transfer
stamps, if any, affixed, and otherwise sufficient to transfer title to such shares
or other equity interests to Purchaser and/or its designee, free and clear of any
and all Liens, along with any further documents and evidence of any Third Party
Consents that may be required to properly transfer the Transferred Securities;



23









 






     (vii) the Lease Assignments;




     (viii) the Other Instruments, if any;




     (ix) the Transition Services Agreement, in a form as shall be mutually agreed
to by Seller and Purchaser in accordance with Section 7.9(b);




     (x) the Supply Agreement, in a form as shall be mutually agreed to by Seller
and Purchaser in accordance with Section 7.9(a);




     (xi) the Canada Non-Competition Covenant executed by Canadian Seller pursuant
to Section 7.13(a)(ii);




     (xii) duly executed counterparts of the Consents, approvals and registrations
referred to in Section 8.1(f);




     (xiii) a certificate executed by a duly authorized officer of Seller and Parent
certifying as to the matters set forth in Sections 8.1(a), (b) and
8.1(e); and




     (xiv) all other documents, certificates, instruments, Books and Records or
writings required to be delivered by Parent, Seller or any Subsidiary at or prior to
the Closing pursuant to this Agreement or otherwise required in connection with the
consummation of the transactions contemplated hereby.



     (b) Purchaser shall deliver or cause to be delivered to Seller:




     (i) evidence of the wire transfer of the Preliminary Purchase Price pursuant to
Section 3.1(a);




     (ii) the Undertaking;




     (iii) the Instruments of Assumption, if any;




     (iv) the General Assignment;




     (v) the Lease Assignments;




     (vi) the Transition Services Agreement;




     (vii) the Supply Agreement;




     (viii) a certificate executed by a duly authorized officer of Purchaser,
certifying as to the matters set forth in Sections 8.2(a) and (b);
and




     (ix) all other documents, certificates, instruments or writings required to be
delivered by Purchaser at or prior to the Closing pursuant to this Agreement or
otherwise required in connection with the consummation of the transactions
contemplated hereby.



24









 





     (c) All deliveries at the Closing as provided for in this Section 4.2 shall be deemed
to be made and effected simultaneously and all such deliveries shall be deemed to be in escrow
until all such deliveries have been made and effected.



          4.3 Termination of Agreement. This Agreement may be terminated prior to the Closing as follows:




     (a) at the election of Seller or Purchaser on or after April 30, 2007, if the Closing shall
not have occurred by the close of business on such date; provided, however, that the terminating
party is not in material default of any of its obligations hereunder.



     (b) by mutual written consent of Seller and Purchaser;



     (c) by Seller or Purchaser if there shall have been enacted, issued, promulgated or enforced
any Law that makes the consummation of the transactions contemplated hereby illegal, or if there
shall be in effect a final nonappealable Order of a Governmental Body of competent jurisdiction
permanently restraining, enjoining or otherwise prohibiting the consummation of the transactions
contemplated hereby; it being agreed that the parties hereto shall promptly appeal any adverse
determination which is not nonappealable (and pursue such appeal with reasonable diligence);



     (d) by Seller if there shall have been a breach of any representation, warranty, covenant or
agreement of Purchaser set forth in this Agreement, which breach would give rise to a failure of a
condition set forth in Sections 8.2(a) or (b), and such breach shall not have been
cured within thirty (30) days following receipt by Purchaser of written notice of such breach from
Seller; or



     (e) by Purchaser if there shall have been a breach of any representation, warranty, covenant
or agreement of Parent or Seller set forth in this Agreement, which breach would give rise to a
failure of a condition set forth in Sections 8.1(a) and (b), and such breach shall
not have been cured within thirty (30) days following receipt by Seller of written notice of such
breach from Purchaser.



          4.4 Procedure Upon Termination. In the event of termination by Purchaser or Seller, or both, pursuant to Section
4.3, written notice thereof shall forthwith be given to the other party or parties, specifying
the provision of Section 4.3 pursuant to which such termination is made, and this Agreement
shall terminate, and the transactions contemplated hereby shall be abandoned, without further
action by Purchaser or Seller.




          4.5 Effect of Termination. In the event that this Agreement is validly terminated in accordance with Section
4.3, then each of the parties shall be relieved of its duties and obligations arising under
this Agreement after the date of such termination and such termination shall be without liability
to Purchaser, Parent, Seller or any Subsidiary, provided, that no such termination shall relieve
any party hereto from liability for any breach of this Agreement and, provided, further, that the
obligations of the parties set forth in Sections 7.5 and ARTICLE X (other than
Section 10.1) hereof shall survive any such termination and shall be enforceable hereunder.





25









 








ARTICLE V




REPRESENTATIONS AND WARRANTIES OF PARENT AND SELLER




          Parent and Seller hereby represent and warrant to Purchaser as follows:




          5.1 Organization and Good Standing; Authorization.









     (a) Each of Parent and Seller is a corporation duly organized, validly existing, and in good
standing under the Laws of the State of Delaware and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business (including the
Business) as now conducted. Seller is duly qualified or authorized to do business as a foreign
corporation and is in good standing under the Laws of each jurisdiction in which it owns or leases
real property and each other jurisdiction in which the conduct of its business or the ownership of
its assets requires such qualification or authorization, except where the failure to be so
qualified, authorized or in good standing would not have a Material Adverse Effect.



     (b) Each of Parent, Seller and the Subsidiaries have all requisite power and authority to
execute and deliver this Agreement and each other Transaction Document to which it is a party in
connection with the consummation of the transactions contemplated by this Agreement, and to
consummate the transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Transaction Documents to which Parent, Seller or any such
Subsidiary is a party and the consummation of the transactions contemplated hereby and thereby
have been duly authorized by all requisite corporate action on the part of Parent, Seller and such
Subsidiary. This Agreement has been, and each of the Transaction Documents to which Parent, Seller
or any such Subsidiary is a party will be at or prior to the Closing, duly and validly executed and
delivered by Parent, Seller and such Subsidiary, and (assuming the due authorization, execution and
delivery by the other parties hereto and thereto) this Agreement constitutes, and each Transaction
Document to which Parent, Seller or such Subsidiary is a party, when so executed and delivered,
will constitute, the legal, valid and binding obligations of Parent, Seller and such Subsidiary,
enforceable against each of them in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors’ rights and remedies
generally, and subject, as to enforceability, to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is
sought in a proceeding at law or in equity).



          5.2 Conflicts; Consents of Third Parties.









     (a) Except as set forth on Schedule 5.2(a), none of the execution and delivery by
Parent, Seller or the Subsidiaries of this Agreement or the Transaction Documents to which Parent,
Seller or any such Subsidiary is a party, the consummation of the transactions contemplated hereby
or thereby, or compliance by Parent, Seller or such Subsidiary with any of the provisions hereof or
thereof will conflict with, or result in any violation of or default (with or without notice or
lapse of time, or both) under, or give rise to a right of termination or cancellation under, any
provision of (i) the constituent documents of Parent, Seller or such Subsidiary; (ii) any Contract
or Permit to which Parent, Seller or such Subsidiary is a party or by which any of their respective
properties or assets are bound; (iii) any Order of any Governmental



26









 




Body applicable to Parent,
Seller or such Subsidiary or by which any of their respective properties or assets are bound; or
(iv) any applicable Law, other than, in the case of clauses (ii), (iii) and (iv), such conflicts,
violations, defaults, terminations or cancellations that would not reasonably be expected to have a
Material Adverse Effect.




     (b) Except as set forth on Schedule 5.2(b), no consent, waiver, approval, Order,
Permit or authorization of, or declaration or filing with, or notification to (each, a
“Consent”), any Person or Governmental Body is required on the part of Parent, Seller or
the Subsidiaries in connection with the execution and delivery of this Agreement or the Transaction
Documents to which Parent, Seller or any such Subsidiary is a party or the compliance by Parent,
Seller or such Subsidiary with any of the provisions hereof or thereof, or the consummation of the
transactions contemplated hereby or thereby, except for (i) compliance with the applicable
requirements of the HSR Act and (ii) such Consents, the failure of which to obtain or make would
not reasonably be expected to have a Material Adverse Effect.



          5.3 Subsidiaries.




     (a) Schedule 5.3(a) hereto sets forth the name of each Subsidiary and (i) with respect
to each Transferred Subsidiary, the jurisdiction in which it is incorporated or organized, the
number of shares of its authorized capital stock or aggregate equivalent equity interests, the
number and class of shares or other equity interests thereof duly issued and outstanding, the names
of all stockholders or other equity owners and the number of shares of stock owned by each
stockholder or the amount of equity owned by each equity owner, and (ii) with respect to each
Retained Subsidiary, whether it is wholly-owned by Seller or another Retained Subsidiary and, if
not so wholly-owned, the names of all stockholders or other equity owners and the number of shares
of stock owned by each stockholder or the amount of equity owned by each equity owner. All of the
issued and outstanding shares of capital stock or equity interests of each Transferred Subsidiary
were duly authorized for issuance and are validly issued, fully paid and non-assessable and are not
subject to, nor were they issued in violation of, preemptive rights, and all such shares or other
equity interests represented as being owned (directly or indirectly) by Seller or a Subsidiary are
owned by it free and clear of any and all Liens except as set forth on Schedule 5.3(a)
hereto. There is no existing option, warrant, call, right, phantom stock right, stock appreciation
right or Contract of any character to which any Subsidiary or Seller is a party requiring, and
there are no securities of any Transferred Subsidiary outstanding which upon conversion, exercise
or exchange would require, the issuance or transfer of any shares of capital stock or other equity
securities of any Transferred Subsidiary or other securities convertible into, exercisable or
exchangeable for or evidencing the right to subscribe for or purchase shares of capital stock or
other equity securities of any Transferred Subsidiary, nor are there any equity equivalent
interests or other similar rights in the ownership or earnings of any Transferred Subsidiary. No
Transferred Subsidiary or stockholder thereof is a party to any voting trust or other Contract with
respect to the voting of the shares of capital stock or other equity interests of such Transferred
Subsidiary, or any other agreement relating to the issuance, redemption, registration, sale,
transfer or other disposition of any capital stock or other equity interests of such Transferred
Subsidiary.



     (b) Each Subsidiary is a corporation or other entity duly organized, validly existing, and in
good standing or its equivalent under the Laws of the jurisdiction of its organization and



27









 




has all requisite corporate power and authority to own, lease and operate its properties and to carry on
its business (including the Business) as now conducted. Each Subsidiary is duly qualified or
authorized to do business as a foreign corporation and is in good standing under the Laws of each
jurisdiction in which it owns or leases real property or in which the conduct of its business or
the ownership of its assets requires such qualification or authorization (except for any
jurisdictions in which the failure to be so qualified, authorized or in good standing would not
have a Material Adverse Effect).




     (c) Except as set forth on Schedule 5.3(a), neither Seller nor the Subsidiaries,
directly or indirectly, owns any voting securities or other voting equity interests in any entity
(other than the Subsidiaries) that owns assets or properties or conducts operations used or held
for use primarily in, or related primarily to, the Business. Neither Seller nor any of the
Subsidiaries has, owns or controls (of record or beneficially), directly or indirectly, any
interest in any other Person (other than the Subsidiaries), or is a party to or participant in any
partnership, joint venture or other similar investment, related to the Business. Neither Seller
nor any of the Subsidiaries is subject to any obligation or requirement to provide funds to or make
any
investment (whether in the form of a loan, capital contribution or otherwise) in any Person
related to the Business.



          5.4 Financial Statements.




     (a) Seller has delivered to Purchaser copies of (i) the unaudited balance sheets of the
Business as of December 31, 2004 and 2005 and the related unaudited statements of income and of
cash flows of the Business for the years ended December 31, 2003, 2004 and 2005, and (ii) the
unaudited balance sheet of the Business as of November 30, 2006 and the related unaudited
statements of income and cash flows of the Business for the nine month period then ended (such
annual statements described in clause (i), including the related notes and schedules thereto, are
referred to herein as the “Annual Financial Statements,” and such interim statements
described in clause (ii) are referred to herein as the “Interim Financial Statements,” and,
together with the Annual Financial Statements, the “Financial Statements”). Except as set
forth in the notes thereto, each of the Financial Statements has been prepared on a stand-alone
basis with respect to the Business in accordance with GAAP consistently applied and consistent with
the assumptions and methodologies set forth on Schedule 5.4(a)(i) and presents fairly in
all material respects the financial position, results of operations and cash flows of the Business
as at the dates and for the periods indicated therein. For the purposes hereof, the unaudited
balance sheet of the Business as at November 30, 2006 (a copy of which is attached to Schedule
5.4(a)(ii)) is referred to as the “Business Balance Sheet” and November 30, 2006 is
referred to as the “Balance Sheet Date.”



     (b) Books and Records. Except as set forth on Schedule 5.4(b), the books of
account and other records of the Business, and the stock record and minute books and other
corporate records of the Transferred Subsidiaries, all of which have been made available to
Purchaser, (i) with respect to Seller and the Retained Subsidiaries (and the Business as it relates
to Seller and the Retained Subsidiaries) (ii) with respect to each Transferred Subsidiary (and the
Business as it relates to such Transferred Subsidiary) since the Seller Acquisition Date (as
defined below), and (iii) to the Knowledge of Seller, with respect to each Transferred Subsidiary
(and the Business as it relates to such Transferred Subsidiary) prior to the Seller Acquisition
Date (as



28









 




defined below), are in each case in all material respects complete and correct and have
been maintained in accordance with sound business practices. Except as set forth on Schedule
5.4(b), he minute books of the Transferred Subsidiaries contain accurate and complete records
of all meetings held of, and corporate action taken by, the stockholders, the boards of directors
and any committees of the boards of directors of the Transferred Subsidiaries since the date that
Seller acquired or formed such Transferred Subsidiary (the “Seller Acquisition Date” for
such Subsidiary), and no meeting of any of the stockholders, board of directors or committees of
any of the Transferred Subsidiaries has been held since its respective Seller Acquisition Date for
which minutes have not been prepared and are not contained in such minute books. To the Knowledge
of Seller, no meeting of any of the stockholders, board of directors or committees of any of the
Transferred Subsidiaries has been held prior to its respective Seller Acquisition Date for which
minutes have not been prepared and
are not contained in such minute books. At the Closing, all of such books and records, to the
extent they constitute Books and Records, will be in the possession of Seller and the Subsidiaries.




     (c) Internal Controls. Parent and Seller have established and maintain, adhere to and
enforce a system of internal accounting controls with respect to the Business which are in all
material respects effective in providing reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements (including the Financial
Statements) in accordance with GAAP and Schedule 5.4(a)(i).



     (d) Accounts Receivable. Seller has made available to Purchaser a list of all
Accounts Receivable as of the Balance Sheet Date, together with a range of days elapsed since
invoice. Except to the extent, if any, reserved for on the Financial Statements, and except as set
forth on Schedule 5.4(d), all Accounts Receivable reflected on the Financial Statements
arose from, and all Accounts Receivable of Seller and the Subsidiaries existing on the Closing Date
will have arisen from, the sale of Inventory or services rendered in the Ordinary Course of
Business to Persons not Affiliated with Parent, Seller or the Subsidiaries. All such Accounts
Receivable are carried on the Books and Records of Seller or the applicable Subsidiary, as the case
may be, at values, net of allowance for doubtful accounts, determined in accordance with GAAP
consistently applied, and are collectible except to the extent of the reserves therefor set forth
in the Business Balance Sheet or, for receivables arising subsequent to the Balance Sheet Date, as
reflected on the Books and Records of Seller (which are in each case prepared in accordance with
GAAP consistently applied and the reserve practices and methodology used in preparation of the
Business Balance Sheet), and none of such accounts receivable is, or at the Closing Date will be,
subject to any counterclaim or set-off, except for counterclaims or set-offs in the Ordinary Course
of Business. Except as set forth on Schedule 5.4(d), no person has any lien on any of the
Accounts Receivable.



     (e) Inventory. Except as set forth on Schedule 5.4(e), the Inventory is or as
of the Closing Date will be in the physical possession of Seller or a Subsidiary, or will be in
transit to the Leased Real Property or the Owned Properties, or will be in the possession or
control of a customer of the Business. Subject to amounts reserved therefor on the Financial
Statements, (i) none of the Inventory has been pledged as collateral or otherwise is subject to any
Lien (other than a Permitted Exception or as set forth on Schedule 5.4(e)) or is held on
consignment from others, (ii) the values at which all Inventory is carried on the Financial
Statements reflect the historical inventory valuation policy of the Business, and (iii) the
Inventory is in good and



29









 




merchantable condition in all material respects and is suitable and usable
in all material respects for the purposes for which it is intended in the Ordinary Course of
Business. All of the Inventory has been acquired by Seller or a Subsidiary only in bona fide,
arms-length transactions entered into in the Ordinary Course of Business.




     (f) Rebates. The Business Balance Sheet reflects all Rebates granted or accrued or
committed to be granted or accrued by Seller or any Subsidiary prior to the Balance Sheet Date, and
Seller and the Subsidiaries have not granted or accrued or committed to grant or accrue any Rebates
since the Balance Sheet Date except in the Ordinary Course of Business and in an amount that would
result in a decrease of no more than 5% in annual revenue attributable to any such customer on an
individual basis.



          5.5 No Undisclosed Liabilities. All of the Liabilities reflected on the Business Balance Sheet are related to the Business.
Except (i) to the extent reflected or reserved against in the Business Balance Sheet, (ii) for
Liabilities that are incurred after the date of the Business Balance Sheet and prior to the date
hereof in the Ordinary Course of Business consistent with past practices, (iii) for Liabilities
that are incurred after the date hereof in accordance with the terms hereof, or (iv) for Excluded
Liabilities, there are no material Liabilities or other material obligations of any nature
whatsoever relating to the Business or of the Transferred Subsidiaries.




          5.6 Absence of Certain Developments. Except as expressly contemplated hereby, from the Balance Sheet Date to the date of this
Agreement, (i) Seller and the Subsidiaries have conducted the operations of the Business only in
the Ordinary Course of Business consistent with past practice and have not taken any action that
would have been prohibited by Section 7.2 if this Agreement had been in effect at the time
such action was taken and (ii) there has not been any Material Adverse Effect.




          5.7 Taxes. Except as set forth on Schedule 5.7:




     (a) All Tax Returns required to be filed by each of the Transferred Subsidiaries have been
timely filed. All Taxes required to be paid (whether or not shown to be due on such Tax Returns) by
each of the Transferred Subsidiaries have been timely paid. All such Tax Returns are true, correct
and complete in all material respects. All material Tax Returns required to be filed by each of
Seller and the Retained Subsidiaries in connection with the Business have been timely filed.
Seller and the Retained Subsidiaries each has paid all Taxes required to be paid by them, the
nonpayment of which would result in a Lien or other encumbrance on the Assets in the hands of
Purchaser, excepting in each case such Taxes as will not be due until after the Closing Date.



     (b) There is no Legal Proceeding, investigation, audit or examination proposed in writing or
currently pending against or with respect to any of the Transferred Subsidiaries or in connection
with the Business in respect of any Tax. No deficiencies for any Taxes which have not been
resolved have been proposed in writing, asserted or assessed in writing against any of the
Transferred Subsidiaries or in connection with the Business.



     (c) All material Taxes required to have been withheld by each of the Transferred Subsidiaries
or in connection with the Business have been withheld and paid over to the proper Governmental
Body.



30









 





     (d) There are no Liens for Taxes upon any property or assets of any of the Transferred
Subsidiaries or the Assets (other than for Taxes not yet due and payable).



     (e) None of the Transferred Subsidiaries has any liability for the Taxes of any Person
including under Section 1.1502-6 of the Treasury Regulations (or any similar provision of state,
local or foreign law), as a transferee or successor (other than for Taxes of an affiliated group of
which the common parent is Parent). None of the Transferred Subsidiaries is a party to, is bound
by or has any obligation under, any tax sharing agreement or similar contract or any agreement
that obligates it to make any payment for Taxes of any other Person (other than an obligation (x)
in any customary agreements with customers, vendors or the like entered into in the Ordinary Course
of Business or in any customary credit agreement and (y) with respect to property taxes payable for
properties leased to the Transferred Subsidiaries).



     (f) None of the Transferred Subsidiaries organized under the Laws of a country other than the
United States (the “Foreign Transferred Subsidiaries”) has a permanent establishment in a
jurisdiction other than the jurisdiction of its incorporation.



     (g) Schedule 5.7(g) sets forth each jurisdiction in which each of the Transferred
Subsidiaries files a Tax Return.



     (h) None of the Transferred Subsidiaries will be required to include any item of income in, or
exclude any item of deduction from, taxable income for any period (or any portion thereof) ending
after the Closing Date as a result of any: (i) installment sale or other open transaction
disposition made on or prior to the Closing Date; or (ii) prepaid amount received on or prior to
the Closing Date.



     (i) All charges for amounts payable or amounts receivable among any of Seller or the Retained
Subsidiaries, on the one hand, and any of the Transferred Subsidiaries, on the other hand, have
been made at arms’ length for fair value.



     (j) Schedule 5.7(j) sets forth a complete and accurate list of all material
agreements, rulings, settlements or other similar Tax documents relating to Tax incentives between
any of the Foreign Transferred Subsidiaries and a Governmental Body.



     (k) All conditions (including filing of Tax or any other information or regulatory returns)
relating to grant of any license or approval for claiming any Tax holiday or any other Tax benefit
by GenTek Technology Pvt. Ltd. have been fulfilled. Further, there is no litigation challenging
the availability of any such Tax holiday or Tax benefit.



     (l) Canadian Seller is not a non-resident of Canada for purposes of the Income Tax Act
(Canada).



          5.8 Real Property.




     (a) Schedule 5.8(a) sets forth a true and complete list of all real property and
interests in real property owned in fee by Seller and the Subsidiaries that are primarily used or
held for use in connection with the Business, other than the Concord Facility (individually, an
“Owned Property” and collectively, the “Owned Properties”). Seller or the
Subsidiaries, as applicable,



31









 




have good and marketable fee title to all Owned Properties, free and
clear of all Liens of any nature whatsoever except (i) Liens set forth on Schedule 5.8(a)
and (ii) Permitted Exceptions. Seller has made
available to Purchaser copies of all deeds, title reports and policies and surveys for the
Owned Properties in the possession of Seller or the Subsidiaries.




     (b) Schedule 5.8(b) sets forth a true and complete list of all leases of real property
by Seller and the Subsidiaries that are primarily used or held for use in connection with the
Business (individually, a “Real Property Lease” and collectively, the “Real Property
Leases”). The Real Property Leases, together with the Owned Properties, constitute all
material interests in real property currently used or currently held for use primarily in
connection with the Business. There does not exist any actual or, to the Knowledge of Seller,
threatened or contemplated condemnation or eminent domain proceedings that affect the Real Property
Leases or any part thereof, and Seller has not received any written notice of the intention of any
Governmental Body or other Person to take or use all or any part thereof. Each of the Owned
Properties and real property subject to any Real Property Lease, and all buildings, fixtures and
improvements thereon, are adequate in all material respects for their intended use in the operation
of the Business as currently conducted.



     (c) The zoning and land use regulation of each parcel of Owned Property and real property
subject to any Real Property Lease permits the presently existing improvements located thereon and
the continuation of the business presently being conducted on such parcel. There is no pending or,
to the Knowledge of Seller, contemplated rezoning of any Owned Property or Real Property Lease.
Each Owned Property and Real Property Lease is in compliance with applicable state law and local
subdivision ordinances.



     (d) There are no contracts or options to sell the Owned Property or any portion of the Owned
Property which are presently in effect. Except as set forth on Schedule 5.8(d), neither Seller nor
any of its Subsidiaries have entered into any leases with respect to the Owned Property or
subleases of the Real Property Leases.



          5.9 Tangible Personal Property. Except as set forth on Schedule 5.9(i), Seller or the Subsidiaries, as applicable,
have good and marketable title to, or a valid leasehold interest in, each of the items of Tangible
Personal Property reflected in the Business Balance Sheet (except as sold or disposed of subsequent
to the date thereof in the Ordinary Course of Business consistent with past practice) or otherwise
included in the Assets, free and clear of any and all Liens other than the Permitted Exceptions.
All of such Tangible Personal Property, taken as a whole, is in good operating condition and
repair, reasonable wear and tear excepted, has been reasonably maintained in accordance with normal
industry practice, and is usable in the Ordinary Course of Business and is suitable, sufficient in
amount, size and type and adequate, in each case, in all material respects, for the uses for which
they are used to carry on the Business as now conducted. Schedule 5.9(ii) sets forth a
list of all Tangible Personal Property that will remain at the Concord Facility following the
shutdown of operations currently in progress at the Concord Facility (the “Remaining Concord
Assets”).




          5.10 Intellectual Property.




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     (a) Schedule 5.10(a) contains a list (by name, part number and other appropriate
product identifiers) of all products (excluding products in development) sold, distributed or
otherwise disposed of during 2005 and 2006 by Seller or any of the Subsidiaries in connection with
the Business, and such list is complete and accurate in all material respects. None of such
products, nor any other Product, is a Retained Aviation Product.



     (b) The Business Intellectual Property constitutes all the Intellectual Property necessary for
Purchaser to conduct the Business in substantially the same manner as it is currently operated or
included or incorporated in the Products as currently sold, distributed or otherwise disposed of.
Seller or its Subsidiaries is the exclusive owner of all right, title and interest in and to (free
and clear of all encumbrances except Permitted Exceptions or as set forth on Schedule
5.10(b)) the Business Intellectual Property other than In-Licensed IP.



     (c) Schedule 5.10(c) sets forth a list (as of the date of this Agreement) of all U.S.
and foreign Patents, Marks and Copyrights, in each case included in the Business Intellectual
Property, registered by or on behalf of Seller or any Subsidiary with any Governmental Body, such
list including the jurisdiction(s) in which each item of the foregoing was or is filed or
registered and the respective application or registration numbers and dates (“Registered
IP”). Except for the Registered IP set forth on Schedule 5.10(c), all Registered IP
are subsisting and, to the Knowledge of Seller, valid, and all necessary registration, maintenance
and other filing fees due through the date hereof in connection with Registered IP have been timely
paid and all necessary documents in connection with Registered IP have been timely filed with the
relevant authorities in the U.S. or foreign jurisdictions, as the case may be, for the purposes of
establishing and maintaining Registered IP. Except as set forth on Schedule 5.10(c), there
are no actions that are required to be taken by Seller or any of its Subsidiaries within
one-hundred and twenty (120) days of the date hereof with respect to the Registered IP that if not
taken will have a material adverse effect on any Registered IP, or the prosecution of applications
or registrations relating thereto, including the payment of any registration, maintenance or
renewal fees or the filing of any response to United States Patent and Trademark Office actions.



     (d) Since July 1, 2002, no Person has asserted, or threatened to assert, in writing to Seller
or its Subsidiaries any claims (i) contesting the right of Seller or any of its Subsidiaries to
use, exercise, sell, license, transfer or dispose of any Business Intellectual Property or any
products, processes or materials covered thereby in any manner, or (ii) challenging the ownership,
validity or enforceability of any Business Intellectual Property. No Business Intellectual
Property is subject to any outstanding order, judgment, decree, stipulation or agreement related to
or restricting in any manner the licensing, assignment, transfer, use or conveyance thereof by
Seller or any of its Subsidiaries.



     (e) Except for NDAs, Schedule 5.10(e) lists all licenses, sublicenses and other
agreements to which Seller or any of its Subsidiaries is a party and pursuant to which any third
party is authorized to use, exercise or receive any benefit from the Business Intellectual
Property. Seller has delivered to Purchaser accurate and complete copies of all licenses,
sublicenses, and other agreements identified above and is in compliance with all material terms and
conditions of such licenses, sublicenses, and other agreements.



33









 





     (f) Schedule 5.10(f) separately lists: (i) all In-Licensed IP; (ii) all licenses,
sublicenses and other agreements to which Seller or any of its Subsidiaries is a party and pursuant
to which Seller or any of its Subsidiaries is authorized to use, exercise, or receive any benefit
from any In-Licensed IP, except for licenses under NDAs and licenses for Off-the-Shelf Software
(collectively, “In-Licenses”); and (iii) all such In-Licenses, that require Seller or any
of its Subsidiaries to license, assign or otherwise grant rights to additions, modifications or
improvements to In-Licensed IP made by or for Seller or any of its Subsidiaries to any third party.
Seller has delivered to Purchaser copies of all In-Licenses. Seller and its Subsidiaries are in
compliance with all material terms and conditions of all such In-Licenses.



     (g) The operation of the Business as currently conducted by Seller and its Subsidiaries does
not infringe or misappropriate any Intellectual Property of any third party, violate any right to
privacy or publicity of any third party, or constitute unfair competition or trade practices under
applicable Laws. Since July 1, 2002, neither Seller nor any of its Subsidiaries has received
notice from any third party that the operation of the Business as currently conducted by Seller and
its subsidiaries or the manufacture, use, sale, support, reproduction, modification or other
commercial exploitation of any Product infringes or misappropriates the Intellectual Property of
any third party, violates any right to privacy or publicity of any third party, or constitutes
unfair competition or trade practices under applicable Laws.



     (h) Neither Seller nor any of its Subsidiaries has brought any actions or lawsuits alleging
(i) infringement of any of the Business Intellectual Property or (ii) breach of any license,
sublicense or other agreement authorizing another party to use any Business Intellectual Property,
and, to the Knowledge of Seller, there does not exist any fact which could reasonably form the
basis of any such action or lawsuit. Neither Seller nor any of its Subsidiaries has entered into
any agreement granting any third party the right to bring infringement actions with respect to, or
otherwise to enforce rights with respect to, any of the Business Intellectual Property.



     (i) Seller and its Subsidiaries have taken reasonable and appropriate steps to protect and
preserve the confidentiality of all material Confidential Information.



     (j) The consummation of the transactions contemplated by this Agreement will neither violate
nor result in the breach, modification, cancellation, termination, suspension of, or acceleration
of any payments with respect to any contracts, licenses or agreements relating to Business
Intellectual Property. Following the Closing, Purchaser will be permitted to exercise all of the
rights of Seller or any of its Subsidiaries under such contracts, licenses and agreements to the
same extent Seller or any of its Subsidiaries would have been able to had the transactions
contemplated by this Agreement not occurred and without the payment of any additional amounts or
consideration other than ongoing fees, royalties or payments which Seller or its Subsidiaries would
otherwise be required to pay. Neither this Agreement nor the transactions contemplated hereby will
result in (i) Purchaser or any of its Affiliates granting to any third party any right to or with
respect to any material Intellectual Property right owned by, or licensed to, Purchaser or any of
its Affiliates, or (ii) Purchaser or any of its Affiliates being bound by, or
subject to, any non-compete or other material restriction on the operation or scope of its
business.



34









 





          5.11 Material Contracts.




     (a) Schedule 5.11(a) sets forth all of the following Contracts to which Seller or the
Subsidiaries are a party or by which any of them are bound as of the date of this Agreement,
relating to or in connection with the Business, the Assets, the Assumed Liabilities, the
Transferred Subsidiaries or the Transferred Employees, but excluding any Contracts exclusively
relating to or in connection with the Excluded Assets or the Excluded Liabilities (collectively,
the “Material Contracts”):




     (i) Contracts with Seller or any Affiliate of Seller;




     (ii) Contracts for the sale or other disposition of any of the assets of Seller
or the Subsidiaries that would constitute “Assets” if held by the Seller or the
Subsidiaries as of the Closing Date for consideration in excess of $100,000, other
than the sale of Inventory in the Ordinary Course of Business;




     (iii) Contracts relating to the acquisition by Seller or the Subsidiaries of
any operating business or the capital stock of any other Person, in each case for
consideration in excess of $50,000;




     (iv) Contracts containing covenants of Seller or the Subsidiaries not to
compete in any line of business or with any Person, or from soliciting customers or
employees, in any geographical area;




     (v) Contracts relating to joint ventures, strategic alliances, comarketing,
copromotion, copackaging, joint development or similar arrangements with any other
Person;




     (vi) Contracts relating to the borrowing of money, or the making of any loans;




     (vii) Contracts evidencing a letter of credit under any indebtedness of Seller
or Parent or their Affiliates for the benefit of the Business;




     (viii) Contracts granting exclusive rights in Business Intellectual Property to
any other Person;




     (ix) indemnification, employment or other Contracts, other than those Contracts
related to equity-based awards granted by Parent or any of its Affiliates to any
Transferred Employee constituting Excluded Liabilities, with any Transferred
Employee which involve the payment of aggregate yearly compensation or other
consideration in excess of $50,000;




     (x) Contracts granting or evidencing a Lien on any assets of Seller or any
Subsidiary, other than a Permitted Exception;




     (xi) management, consulting or other advisory services Contracts involving fees
in excess of $100,000 per annum;



35









 






     (xii) Contracts relating to the purchase of goods, materials or supplies
involving anticipated annual payments, in the case of Contracts with suppliers, in
excess of $500,000, or, with anticipated annual receipts, in the case of Contracts
with customers, in excess of $500,000, and in either case that are not terminable by
Seller or the Subsidiaries, as applicable, without penalty or acceleration on notice
of ninety (90) days or less, excluding, in each case, purchase orders for the
purchase of Inventory or sales of any goods or services in the Ordinary Course of
Business;




     (xiii) any Contracts other than those described in clause (xii) which involve
the expenditure of more than $100,000 in the aggregate or require performance by any
party more than one (1) year from the date hereof that, in either case, are not
terminable by Seller or the Subsidiaries, as applicable, without penalty on notice
of ninety (90) days or less;




     (xiv) Contracts evidencing indemnities, liabilities, obligations and guarantees
by any of the Transferred Subsidiaries for the benefit of Seller or Parent or any
Affiliate of Seller or Parent (other than the Transferred Subsidiaries);




     (xv) Contracts relating to capital leases included in the Assets (all such
capital leases identified on Schedule 5.11(a)(xv) being referred to as
“Capital Leases”); and




     (xvi) each commitment or agreement to enter into any of the foregoing.



     (b) Each Assigned Agreement and Real Property Lease is valid, binding and in full force and
effect and is enforceable in accordance with its terms by Seller and the Subsidiaries party
thereto, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or in equity). Except
as set forth on Schedule 5.11(b), neither Seller nor any of the Subsidiaries is in default
in any material respect under any Assigned Agreement or Real Property Lease, nor, to the Knowledge
of Seller, does any condition exist that, with notice or lapse of time or both, would constitute a
default in any material respect thereunder by Seller or the Subsidiaries party thereto, nor has
Seller or any of the Subsidiaries received any written notice of any default in any material
respect under any Assigned Agreement or Real Property Lease. Except as set forth on Schedule
5.11(b), to the Knowledge of Seller, no other party to any Assigned Agreement or Real Property
Lease is in default in any material respect thereunder, nor, to the Knowledge of Seller, does any
condition exist that with notice or lapse of time or both would constitute a default in
any material respect by any such other party thereunder. Each Material Contract and Real
Property Lease has been stamped, if and to the extent required, in accordance with applicable Laws,
so as to render it admissible in evidence in any legal proceedings.



36









 





     (c) Except as set forth on Schedule 5.11(c), all of the Assigned Agreements arise
exclusively out of and relate exclusively to the Assets, the Assumed Liabilities or the conduct of
the Business, and not to any business of Seller or any of the Subsidiaries other than the Business.



          5.12 Employee Benefits Plans.




     (a) Schedule 5.12(a) contains a true and complete list of (1) each “employee benefit
plan” (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”)), (2) any other material written, unwritten, formal or informal plan or
agreement involving direct or indirect compensation other than workers’ compensation, unemployment
compensation and other government programs, or (3) any material employment, severance or other
similar Contract or policy (written or oral) providing for insurance coverage (including any
self-insured arrangements), non-statutory workers’ compensation, disability benefits, supplemental
unemployment benefits, vacation benefits, retirement benefits, deferred compensation,
profit-sharing, bonuses, stock options, stock appreciation rights or other forms of incentive
compensation or post-retirement insurance, compensation or benefits, (x) that is entered into with
any Business Employee, (y) in which any Business Employee participates, or (z) with respect to
which any of the Transferred Subsidiaries has or is reasonably expected to have any present or
future liability (directly or indirectly). All such plans, agreements, programs, policies and
arrangements required to be scheduled on Schedule 5.12(a) shall be collectively referred to
as the “Benefit Plans”. Schedule 5.12(a) identifies (i) those Benefit Plans that
are maintained or contributed to solely by any of the Transferred Subsidiaries, or to which solely
the Transferred Subsidiaries are a party (the “Transferred Benefit Plans”) and (ii) those
Benefit Plans that are maintained or contributed to by Parent, Seller or their Affiliates (other
than the Transferred Subsidiaries), or to which Parent, Seller or their Affiliates (other than the
Transferred Subsidiaries) are a party (the “Parent Plans”).



     (b) Parent has provided or made available to Purchaser, with respect to each Transferred
Benefit Plan, a current, accurate and complete copy (or, to the extent no such copy exists, an
accurate description) thereof (including, without limitation, all amendments thereto) and, to the
extent applicable: (A) any related trust agreement or other funding instrument, (B) the most
recent Internal Revenue Service or Department of Labor determination, opinion, notification and
advisory letter, (C) the most recent summary plan description together with the summary or
summaries of material modifications thereto, if any, (D) for the most recent three plan years, (1)
the Form 5500 and all attached schedules, (2) audited financial statements, and (3) actuarial
valuation reports, (E) for the most recent plan year, all discrimination tests, and (F) all
material written agreements and contracts currently in effect, including (without limitation)
administrative service agreements, group annuity contracts, and group insurance contracts.



     (c) (A) Each Benefit Plan that is intended to qualify as a “cash or deferred arrangement”
within the meaning of Section 401(k) of the Code (a “401(k) Plan”) has been maintained and
administered in all material respects in accordance with its terms, and in material compliance with
the applicable provisions of ERISA, the Code and other applicable Laws; (B) each 401(k) Plan, and
each related trust intended to qualify under Section 501(a) of the Code, has received a favorable
determination letter as to its qualification under Section 401(a) or Section 501(a) of the Code, as
applicable, and nothing has occurred, whether by action or failure



37









 




to act, that could reasonably be
expected to cause the loss of such qualification; and (C) to the Knowledge of Seller, no event has
occurred and no condition exists that would subject Seller or any of the Subsidiaries, either
directly or by reason of their affiliation with any member of their “Controlled Group” (defined as
any organization which is a member of a controlled group of organizations within the meaning of
Sections 414(b), (c), (m) or (o) of the Code), to any material tax, fine, lien, penalty or other
liability imposed by ERISA, the Code or other applicable Laws for which Purchaser would reasonably
be expected to be liable.




     (d) None of Parent, Seller or any of the Subsidiaries participate in or contribute to any
“multiemployer plan” as defined in Section 3(37) of ERISA, a plan described in Section 413 of the
Code or any plan subject to Title IV of ERISA or Section 302 of ERISA. None of Parent, Seller or
any of the Subsidiaries has any outstanding or contingent obligations or liabilities with respect
to a multiemployer plan, a plan described in Section 413 of the Code or any plan subject to Title
IV of ERISA or Section 302 of ERISA.



     (e) With respect to any Transferred Benefit Plan, (A) neither Parent, Seller nor any
Subsidiary has received any written notice of any, and to the Knowledge of Seller there are no,
pending or threatened actions, suits or claims (other than routine claims for benefits in the
ordinary course), and (B) neither Parent, Seller nor any Subsidiary has received any notice of any,
and to the Knowledge of Seller there is no, pending or threatened administrative investigation,
audit or other administrative proceeding by the Department of Labor, the Internal Revenue Service
or other Governmental Body which, in any such case, individually or in the aggregate, could
reasonably be expected to result in a material liability to Purchaser. No “Prohibited
Transaction,” within the meaning of Section 4975 of the Code or Sections 406 or 407 of ERISA and
not otherwise exempt under Section 408 of ERISA, has occurred with respect to any Transferred
Benefit Plan.



     (f) There is no Benefit Plan, agreement, plan or arrangement covering any Business Employee or
with respect to which any Transferred Subsidiary could have any liability that, individually or
collectively, could give rise to the payment as a result of the transactions contemplated by this
Agreement of any amount that would not be deductible by Parent, Seller or such Subsidiary by reason
of Section 280G of the Code (or any similar foreign, state or local Law). For purposes of the
foregoing sentence, the term “payment” shall include (without limitation) any payment,
acceleration, forgiveness of indebtedness, vesting, distribution, increase in benefits or
obligation to fund benefits.



     (g) Except as set forth on Schedule 5.12(g), no Benefit Plan provides death or medical
benefits, whether or not insured, with respect to any Business Employee, or any spouse or dependent
of any such Business Employee, beyond the Business Employee’s retirement or other termination of
employment with Seller and its Subsidiaries other than coverage mandated
by Part 6 of Title I of ERISA or Section 4980B of the Code (“COBRA”).



     (h) Except as set forth on Schedule 5.12(h), no Transferred Benefit Plan is maintained
outside the jurisdiction of the United States, or covers any employee residing or working outside
the United States (any such Transferred Benefit Plan, a “Foreign Benefit Plan”). With
respect to any Foreign Benefit Plans, all Foreign Benefit Plans have been established, maintained
and administered in compliance in all material respects with their terms and all applicable
statutes,



38









 




laws, ordinances, rules, orders, decrees, judgments, writs, and regulations of any
controlling Governmental Body.




     (i) Except as set forth on Schedule 5.12(i), with respect to each Transferred Benefit
Plan that is required by applicable Law to be funded or insured, except as would not reasonably be
expected to result in material liability to any of the Transferred Subsidiaries, the fair market
value of the assets of each funded Transferred Benefit Plan, the liability of each insurer for any
Transferred Benefit Plan funded through insurance or the book reserve established for any
Transferred Benefit Plan, together with any accrued contributions, is sufficient to procure or
provide for the accrued benefit obligations, as of the date of this Agreement, with respect to all
current and former participants in such plan according to the actuarial assumptions and valuations
most recently used and consistent with applicable Law to determine employer contributions to such
Transferred Benefit Plan and no transaction contemplated by this Agreement shall cause such assets,
reserve or insurance obligations to be less than such benefit obligations.



     (j) Except as set forth on Schedule 5.12(j), there are no Contracts pertaining to any
transaction or incentive bonus, “stay-put” or other similar non-equity based compensatory payments
to be made to Transferred Employees on or after the Closing Date as a result of the execution of
this Agreement or the consummation of the transactions contemplated by this Agreement or the
Transaction Documents to which Parent, Seller or any Subsidiary is a party.



          5.13 Labor Matters.




     (a) Except as set forth on Schedule 5.13(a), neither Seller nor any of the
Subsidiaries, with respect to the Business, is a party to any US or non-US collective bargaining
agreement or other labor union contract (or is subject to any statutory scheme of similar import)
applicable to all or any of the Business Employees, nor, to the Knowledge of Seller, are there any
activities or proceedings of any labor union to organize any Business Employees.



     (b) Seller and the Subsidiaries are, with respect to the Business, in material compliance with
all applicable Laws respecting employment practices, terms and conditions of employment,
management-labor relations and wages and hours which are in effect as of the date of this
Agreement. With respect to the operation of the Business, (i) there is no material unfair labor
practice charge or other employment related complaint pending or, to the Knowledge of Seller,
threatened against Seller or any of the Subsidiaries before any Governmental Body, and (ii) there
is no material Legal Proceeding brought by or on behalf of any employee, prospective
employee, former employee, retiree, labor organization or other representative of Seller’s or
any of the Subsidiaries’ employees pending or, to the Knowledge of Seller, threatened against
Seller or any of the Subsidiaries, in each case with respect to the operation of the Business.
Neither Seller nor any of the Subsidiaries is a party to or bound by any consent decree with, or
citation by, any Governmental Body relating to employees or employment practices of, or in
connection with, the Business. Except as set forth on Schedule 5.13(b), there is no
material labor strike, slowdown or work stoppage, lockout or labor disturbance pending or, to the
Knowledge of Seller, threatened, nor is there any material grievance currently being asserted,
which involves any Business Employee. Neither Seller nor any of the Subsidiaries has experienced
any material work stoppage or work slowdown with respect to the operation of the Business at any
time since



39









 




the later of (i) the date that is five (5) years immediately preceding the date of this
Agreement and (ii) with respect to a particular Subsidiary, the date that Seller acquired or formed
such Subsidiary. As of the Closing Date, Seller and the Subsidiaries shall have, in all material
respects, paid in full to all Business Employees all wages, salaries, commissions, bonuses and
benefits due and payable prior to the Closing to such Business Employees. Seller and the
Subsidiaries are, and have operated the Business, in material compliance with their respective
obligations pursuant to the Worker Adjustment and Retraining Notification Act of 1988 (“the
WARN Act”) and similar applicable foreign, state and local Laws, and all other notification and
bargaining obligations arising under any collective bargaining agreement, statute or otherwise.




     (c) Except to the extent restricted by applicable Law with respect to Business Employees
employed by any Subsidiary in Canada (the “Canada Employees”) (in which case Seller shall
take reasonable efforts to provide the same or similar information with respect to the Canada
Employees in a manner that complies with applicable Law), Schedule 5.13(c) contains a true,
correct and complete list of all present regular, leased, temporary and part-time Business
Employees who are wholly or predominantly engaged for purposes of conducting, and required in
connection with the operation of, the Business, the facility or other location at which such
Business Employees are employed, their current base salary and target bonus, and all stock options
and other equity-based compensation awarded to such Business Employees.



     (d) Except to the extent restricted by applicable Law with respect to the Canada Employees (in
which case Seller shall take reasonable efforts to provide the same or similar information with
respect to the Canada Employees in a manner that complies with applicable Law), Schedule
5.13(d) contains a true and complete list (by location and title or position of employment) of
all Business Employees of Seller or any Subsidiary who are on long-term disability or are not on
active payroll of Seller or one of the Subsidiaries as of the date hereof.



     (e) Except as set forth on Schedule 5.13(e), neither Seller nor any of the
Subsidiaries has closed any plant or facility, or implemented any early retirement, separation or
window program affecting, in whole or in part, Business Employees within the past five years, nor
has any such party announced any such action or program for the future affecting, in whole or in
part, Business Employees.



     (f) Each of the Transferred Subsidiaries has made all corresponding reserves, in each case to
the extent required by GAAP or applicable Law, for payment of seniority premium,
severance indemnity and any other accrued payments and benefits to be paid their respective
Business Employees pursuant to applicable Law, which reserves are properly reflected in each of the
Transferred Subsidiaries’ financial statements.



          5.14 Litigation. Except as set forth on Schedule 5.14, neither Parent, Seller nor any Subsidiary has
received any written notice of or been served with any, and to the Knowledge of Seller there are
no, material Legal Proceedings pending or threatened against, affecting or involving any of the
Transferred Subsidiaries, the Business or any of the Assets, or challenging the validity of this
Agreement or any of the transactions contemplated hereby or by any of the Transaction Documents to
which Seller, Parent or any Subsidiary is a party. Neither Seller nor any of its Subsidiaries nor
any of the Assets is or are subject to any Order affecting or involving the Business or the Assets,
except for those that, individually or in the aggregate, would not





40










 




reasonably be expected to interfere in any material respect with the conduct of the Business as
currently conducted. To the Knowledge of Seller, except as set forth on Schedule 5.14,
there are no formal or informal governmental inquiries or investigations or internal investigations
or material whistle-blower complaints pending or threatened, relating to, affecting or involving
any of the Transferred Subsidiaries, the Business or any of the Assets.




          5.15 Compliance with Laws; Permits.




     (a) Except as set forth on Schedule 5.15, Seller and the Subsidiaries are in
compliance with all Laws (other than Environmental Laws covered in Section 5.16 and Tax
Laws covered in Section 5.7) of any Governmental Body applicable to the Business, except
where the failure to be in compliance would not reasonably be expected to have a Material Adverse
Effect. Since the later of December 1, 2001 and, with respect to any Subsidiary having a Seller
Acquisition Date after December 1, 2001, the Seller Acquisition Date applicable to such Subsidiary,
neither Seller nor the Subsidiaries have received any written notice of or been charged with any
material violation of any Laws relating to the Business. With respect to any Subsidiary having a
Seller Acquisition Date after December 1, 2001, to the Knowledge of Seller, such Subsidiary has
not, prior to the Seller Acquisition Date applicable to such Subsidiary, received any written
notice of or been charged with any material violation of any Laws relating to the Business.



     (b) Except as set forth on Schedule 5.15, Seller and the Subsidiaries currently have
all Permits, and have made all registrations or filings with or notices to any Governmental Body,
which are required for the operation of the Business as presently conducted, except where the
absence of which would not reasonably be expected to materially interfere with or limit the
operation of the Business as presently conducted. Neither Seller nor the Subsidiaries are in
default or violation (and no event has occurred which, with notice or the lapse of time or both,
would constitute a default or violation) of any term, condition or provision of any such Permit,
except where such default or violation would not reasonably be expected to have a Material Adverse
Effect. No proceeding to modify, suspend, revoke, withdraw, terminate or otherwise limit any such
Permit is pending or, to the Knowledge of Seller, threatened. No action by any
Governmental Body has been taken or, to the Knowledge of Seller, threatened, in connection
with the expiration, continuance or renewal of any such Permit.



          5.16 Environmental Matters. Except as set forth on Schedule 5.16,




     (a) The operations of Seller and the Subsidiaries are in material compliance with all
applicable Environmental Laws, which compliance includes obtaining, maintaining and complying with
any Permits required under all applicable Environmental Laws necessary to operate their business
(“Environmental Permits”);



     (b) None of Seller or the Subsidiaries is the subject of any outstanding, unresolved Order of
any Governmental Body in connection with (i) a violation of Environmental Laws, (ii) Remedial
Action or (iii) any Release or threatened Release of a Hazardous Material;



     (c) None of Seller or the Subsidiaries is subject to any pending, or to the Knowledge of
Seller, threatened claim alleging that Seller or the Subsidiaries is in violation of any



41









 







Environmental Law or any Environmental Permit or has liability under any Environmental Law or with
respect to Hazardous Materials;



     (d) There are no pending or, to the Knowledge of Seller, threatened litigation or
investigations of the business of Seller or the Subsidiaries or any Owned Properties or Real
Property Leases of Seller or the Subsidiaries under Environmental Laws or with respect to Hazardous
Materials, which would reasonably be expected to result in Seller or the Subsidiaries incurring any
material liability pursuant to any Environmental Laws or pursuant to any Real Property Lease;



     (e) To the Knowledge of Seller, there are no current circumstances or conditions arising out
of the operations of Seller and the Subsidiaries, or of real property currently owned or leased by
Seller or any of the Subsidiaries (including the Owned Properties), including the Release of
Hazardous Materials, that would reasonably be expected to result in liabilities under Environmental
Laws or pursuant to any Real Property Lease, except in each case as would not reasonably be
expected to have a Material Adverse Effect;



     (f) Neither Seller nor any of the Subsidiaries is undertaking or under any agreement or
obligation to conduct any Remedial Action as a result of the presence or Release of Hazardous
Materials;



     (g) Seller and the Subsidiaries are not aware of any material liability associated with the
off-site disposal or treatment of Hazardous Materials;



     (h) Schedule 5.16(h) sets forth a complete list of all Phase I and Phase II reports
relating to the Leased Real Property and the Owned Properties (other than the Concord Facility) in
the possession, custody or control of Seller, and all Environmental Permits held by Seller or any
Subsidiary.



     (i) Neither Seller nor any of the Subsidiaries has any material financial assurance
obligations under Environmental Law.



     (j) After having made due and diligent inquiry, to the Knowledge of Seller, neither the Seller
nor any of the Subsidiaries, nor their predecessors, have ever designed, manufactured, sold or
distributed any asbestos containing products.



     (k) All products manufactured by Seller or any of the Subsidiaries which, to the Knowledge of
Seller, have been or will be installed in products which have been sold after July 1, 2006, or will
be sold, in the European Union, are in material compliance with customer specifications regarding
the requirements of Directive 2002/95/EC of the European Parliament and of the Council of 27
January 2003 on the restriction of the use of certain hazardous substances in electrical and
electronic equipment.



          5.17 Financial Advisors. Except as set forth on Schedule 5.17, no Person has
acted, directly or indirectly, as a broker, finder or financial advisor for Seller or any of the
Subsidiaries in connection with the transactions contemplated by this Agreement and no Person is
entitled to any fee or commission or like payment from Purchaser in respect thereof.




42









 








          5.18 Related Party Transactions.




     (a) Except as set forth on Schedule 5.18 or as contemplated by this Agreement, none of
Seller or any Affiliate of Seller (i) owns any material direct or indirect interest of any kind in
(other than passive investments in mutual funds or other institutional investment vehicles), or
controls, or is a director or officer of, or has the right to participate materially in the profits
of (other than passive investments in mutual funds or other institutional investment vehicles), any
Person that is or has since January 1, 2004 been (A) a supplier, customer, landlord, tenant,
creditor or debtor of a Transferred Subsidiary or the Business or (B) engaged in any other business
related to the Business, or (ii) is a party to any Contract with any Transferred Subsidiary or is a
participant in any transaction to which a Subsidiary is a party to the extent relating to the
Business (other than the Excluded Assets and the Excluded Liabilities) or any of the Assets,
including any Assigned Agreement.



          5.19 Insurance. Schedule 5.19 contains a complete and accurate list of all
material policies or binders of insurance currently maintained by Seller or any of the Subsidiaries
that provide coverage with respect to (i) the Business or the Assets (other than the Excluded
Assets and the Excluded Liabilities), and (ii) any wire harness or cable assembly products
historically sold, distributed or otherwise disposed of by Seller or any of its Subsidiaries which
were designed, or intended or known by Seller or such Subsidiary, to be used in aircraft or other
aviation applications (“Retained Aviation Products”) including any insurance required to be
maintained by any Contract, showing as to each policy or binder the carrier, policy number,
expiration dates and a general description of the type of
coverage provided (including whether it is a “claims made” or “occurrence” based policy), and
all such material policies are in full force and effect.




          5.20 Foreign Corrupt Practices Act. Neither Seller, nor any Subsidiary since its
Seller Acquisition Date, nor, to the Knowledge of Seller, any Subsidiary prior to its Seller
Acquisition Date (including, in each case, any of the officers, directors, agents, employees or
other Persons associated with or acting on behalf of Seller or such Subsidiary), has, directly or
indirectly, taken any action which would cause it to be in violation of the Foreign Corrupt
Practices Act of 1977, as amended, or any rules or regulations thereunder, used any corporate funds
for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political
activity, made any unlawful payment to foreign or domestic government officials or employees or
made any bribe, rebate, payoff, influence payment, kickback or other similar unlawful payment.




          5.21 Customers. Schedule 5.21 sets forth the names of all the customers of
the Business that purchased goods or services from Seller or the Subsidiaries with an aggregate
annualized purchase price of Five Hundred Thousand Dollars ($500,000) or more during the twelve
(12) months ended December 31, 2005 or Three Hundred Seventy-Five Thousand Dollars ($375,000) or
more during the nine (9) months ended September 30, 2006, and the amount for which each such
customer or its sub-assembler was invoiced during such periods. Except as disclosed in
Schedule 5.21, neither Seller nor any Subsidiary has received any written notice that any
such customer of the Business has ceased, or will cease, to use the goods or services of the
Business, or has substantially reduced, or will substantially reduce, the use of such goods or
services at any time.





43









 








          5.22 Suppliers. Schedule 5.22 sets forth the names of all the suppliers from
which Seller and the Subsidiaries ordered raw materials, supplies, merchandise and other goods for
the Business with an aggregate annualized purchase price of Five Hundred Thousand Dollars
($500,000) or more during the twelve (12) months ended December 31, 2005 or Three Hundred
Seventy-Five Thousand Dollars ($375,000) or more during the nine (9) months ended September 30,
2006, and the amount paid to each such supplier by Seller or such Subsidiary during such periods.
Except as disclosed in Schedule 5.22, neither Seller nor any Subsidiary has received any
written notice that any such supplier will not sell raw materials, supplies, merchandise and other
goods to the Business at any time after the Closing Date on terms and conditions substantially
similar to those used in its current sales to the Business, excluding general and customary price
increases.




          5.23 Product Recalls. Seller has made available to Purchaser copies of all forms of
material written warranties and guarantees made by Seller and the Subsidiaries with regard to the
Products and in effect as of the date of this Agreement. Except as set forth on Schedule
5.23, Seller and the Subsidiaries did not issue warranty credits for defects in Products to any
single customer of the Business in excess of $10,000 in the year ended December 31, 2005 or $40,000
in the nine
months ended September 30, 2006, and Seller and the Subsidiaries did not issue aggregate
warranty credits for defects in Products in excess of $200,000 in either such year or such nine
month period. There are no pending or on-going recalls, or recalls contemplated by Seller, of any
Products.




          5.24 Title to Assets. Seller or its applicable Subsidiaries have good, valid and
marketable title, of record and beneficially, to, or a valid leasehold interest in, all of the
Assets and at the Closing will transfer and deliver to Purchaser legal and valid title to the
Assets, free and clear of all Liens, other than Permitted Exceptions.




          5.25 Sufficiency of Assets. The Assets and the services and occupancy rights to be
provided under the Transition Services Agreement constitute all of the assets necessary for
Purchaser to conduct the Business in substantially the manner in which it is currently being
conducted. Schedule 5.25 contains a true and complete list of all of the properties,
assets, rights, Contracts and claims of Seller and the Subsidiaries used or held for use in the
Business but which are primarily used or held for use in any businesses of Seller or any of the
Subsidiaries other than the Business.




          5.26 Disclaimer of other Representations and Warranties. Except as set forth in this
Agreement, the Schedules hereto and the other Transaction Documents, and the certificates delivered
pursuant hereto and thereto, neither Parent nor Seller makes any representation or warranty,
express or implied, at law or in equity, with respect to the Business or Parent, Seller or any
Subsidiary, or any of the assets, liabilities or operations thereof, including, without limitation,
with respect to merchantability or fitness for any particular purpose, and any such other
representations or warranties are hereby expressly disclaimed.




44









 








ARTICLE VI




REPRESENTATIONS AND WARRANTIES OF PURCHASER




          Purchaser hereby represents and warrants to Seller as follows:




          6.1 Organization and Good Standing. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to own, lease and operate its properties and to carry on its business
as now conducted.




          6.2 Authorization of Agreement. Purchaser has full corporate power and authority to
execute and deliver this Agreement and each other Transaction Document to which Purchaser is a
party in connection with the consummation of the transactions contemplated by this Agreement, and
to consummate
the transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Transaction Documents to which Purchaser is a party and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by all necessary corporate
action on the part of Purchaser. This Agreement has been, and each of the Transaction Documents to
which Purchaser is a party will be at or prior to the Closing, duly and validly executed and
delivered by Purchaser and (assuming the due authorization, execution and delivery by the other
parties hereto and thereto) this Agreement constitutes, and each Transaction Document to which
Purchaser is a party, when so executed and delivered, will constitute, the legal, valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’
rights and remedies generally, and subject, as to enforceability, to general principles of equity,
including principles of commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or in equity).




          6.3 Conflicts; Consents of Third Parties.




     (a) None of the execution and delivery by Purchaser of this Agreement or the Transaction
Documents to which Purchaser is a party, the consummation of the transactions contemplated hereby
or thereby, or compliance by Purchaser with any of the provisions hereof or thereof will conflict
with, or result in any violation of or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination or cancellation under, any provision of (i) the
certificate of incorporation or by-laws or other comparable organizational documents of Purchaser;
(ii) any Contract or Permit to which Purchaser is a party or by which any of the properties or
assets of Purchaser are bound; (iii) any Order of any Governmental Body applicable to Purchaser or
by which any of the properties or assets of Purchaser are bound; or (iv) any applicable Law, other
than, in the case of clauses (ii), (iii) and (iv), such conflicts, violations, defaults,
terminations or cancellations that would not have a material adverse effect on Purchaser’s ability
to consummate the transactions contemplated hereby or thereby.



     (b) No Consent of, with or to any Person or Governmental Body is required on the part of
Purchaser in connection with the execution and delivery of this Agreement or the Transaction
Documents to which Purchaser is a party or the compliance by Purchaser with any



45









 







of the provisions
hereof or thereof, or the consummation of the transactions contemplated hereby or thereby, except
for (A) compliance with the applicable requirements of the HSR Act and (B) such Consents the
failure of which would not have a material adverse effect on Purchaser’s ability to consummate the
transactions contemplated hereby or thereby.



          6.4 Litigation. There are no Legal Proceedings pending or, to the knowledge of
Purchaser, threatened that are reasonably likely to prohibit or restrain the ability of Purchaser
to enter into this Agreement or consummate the transactions contemplated hereby.




          6.5 Investment Intention. Purchaser is acquiring the Transferred Securities for its own account, for investment
purposes only and not with a view to the distribution (as such term is used in Section 2(11) of the
Securities Act of 1933, as amended (the “Securities Act”) thereof. Purchaser understands
that the Transferred Securities have not been registered under the Securities Act and cannot be
sold unless subsequently registered under the Securities Act or an exemption from such registration
is available. Purchaser qualifies as an “accredited investor,” as such term is defined in Rule
501(a) promulgated pursuant to the Securities Act. Purchaser is capable of evaluating the risks
and merits of acquiring the Transferred Securities and can afford to bear the economic risk of its
purchase of such Transferred Securities.




          6.6 Financial Advisors. No Person has acted, directly or indirectly, as a broker,
finder or financial advisor for Purchaser in connection with the transactions contemplated by this
Agreement and no Person is entitled to any fee or commission or like payment in respect thereof.




          6.7 Sufficient Funds. Purchaser has available, or has made arrangements to obtain
(through existing credit arrangements or otherwise), sufficient funds to pay the Purchase Price.




          6.8 No Knowledge of Breach. As of the date hereof, Purchaser is not aware of any
facts, events or circumstances that has caused any of the representations or warranties of Parent
and Seller set forth in Article V hereof to be untrue or incorrect in any material respect
as of the date hereof.




ARTICLE VII




COVENANTS




          7.1 Access to Information; Financing Cooperation.



     (a) Prior to the Closing Date, Purchaser shall be entitled, through its Representatives
(including, without limitation, its legal advisors and accountants), to make such investigation of
the properties, business and operations of Seller and the Subsidiaries and such examination of the
Books and Records of each of them as it reasonably requests, in each case relating to the Business,
the Assets and the Assumed Liabilities and to make extracts and copies of such Books and Records.
Any such investigation and examination shall be conducted during regular business hours and under
reasonable circumstances and shall be subject to restrictions under applicable Law. Parent and
Seller shall use commercially reasonable efforts to cause their Representatives and the
Representatives (including, without limitation, legal advisors and



46









 







accountants) of the Subsidiaries
to cooperate with Purchaser and Purchaser’s Representatives in connection with such investigation
and examination; provided, however, that Purchaser shall schedule any site visits and employee
interviews in advance and at such times as Purchaser and Seller agree. In connection with such
investigation and examination, Purchaser and its
Representatives shall cooperate with Seller and its Representatives and shall use their
commercially reasonable efforts to minimize any disruption to the business of Seller and the
Subsidiaries. No information or knowledge obtained in any investigation pursuant to this
Section 7.1 shall affect or be deemed to modify any representation or warranty contained
herein or the conditions to the obligations of the parties to consummate the transactions
contemplated hereby in accordance with the terms and provisions hereof, nor shall it prejudice any
right or entitlement of any indemnified party to indemnification under this Agreement.



     (b) Parent and Seller shall, and shall cause the Subsidiaries to, and shall use commercially
reasonable efforts to cause its and their respective Representatives to, provide on a timely basis
all such assistance and cooperation as Purchaser may reasonably request in connection with the
arrangement of any equity or debt financing that Purchaser may seek in connection with the
transactions contemplated by this Agreement (provided, that such requested assistance and
cooperation does not unreasonably interfere with the ongoing operations of Seller and the
Subsidiaries), including (i) making senior management of Seller reasonably available for customary
lender meetings and cooperating with prospective lenders in performing their due diligence, (ii)
cooperating in the preparation of any offering memorandum or similar document, (iii) furnishing
Purchaser and its financing sources with financial and other pertinent information regarding Seller
and the Subsidiaries as may be reasonably requested by Purchaser, including financial statements
and financial data, (iv) providing access to the Owned Properties and properties subject to Real
Property Leases for Phase I environmental inspections, and (v) providing documents as may be
reasonably requested by Purchaser; provided, that none of Seller nor any Subsidiary shall be
required to pay any commitment or other similar fee or incur any other liability or any travel,
lodging or other material out-of-pocket expenses in connection with any such financing or
cooperation provided pursuant to this Section 7.1(b).



          7.2 Conduct of the Business Pending the Closing.




     (a) Prior to the Closing, except (i) as set forth on Schedule 7.2, (ii) as required by
applicable Law, (iii) as otherwise contemplated by this Agreement or (iv) with the prior written
consent of Purchaser (which consent shall not be unreasonably withheld or delayed), Parent and
Seller shall:




     (i) conduct, and cause the Subsidiaries to conduct, the Business only in the
Ordinary Course of Business;




     (ii) use commercially reasonable efforts to (A) preserve the present business
operations, organization and goodwill of the Business, (B) preserve the present
relationships with customers, vendors, suppliers, distributors and sales prospects
of the Business and any other Persons with whom Seller or any of its Subsidiaries
otherwise has material business relationships relating to the Business, and (C) keep
available the services of the current Business Employees;



47









 






     (iii) (A) maintain all existing rights, privileges, licenses and other
authorizations (including all Business Intellectual Property) reasonably necessary
for the operation of the Business, (B) continue in all material respects the
current sales, marketing and promotional activities relating to the Business, (C)
keep and maintain the Assets in all material respects in their current condition and
state of repair to permit their use in the continuing operation of the Business,
ordinary wear and tear excepted, and (D) perform its respective obligations in all
material respects under the Assigned Agreements and the Real Property Leases
included within the Assets in accordance with the terms thereof,




     (iv) make capital expenditures in the manner set forth in the Business’s 2006
capital expenditure budget (including as to time and amount);




     (v) cause the Business to conduct its working capital and cash management
practices, the collection of accounts receivable, the payment of accounts payable
(including the writing and mailing of checks with respect thereto) and the
maintenance of inventories in the Ordinary Course of Business; and




     (vi) cause the Business to pay, prior to the Closing Date, all Rebates due and
payable on or prior to the Closing Date.



     (b) Except (i) as set forth on Schedule 7.2, (ii) as required by applicable Law, (iii)
as otherwise contemplated by this Agreement or (iv) with the prior written consent of Purchaser
(which consent shall not be unreasonably withheld or delayed), Seller shall not, and shall cause
the Subsidiaries not to:




     (i) repurchase, redeem or otherwise acquire any outstanding equity interests or
other securities of the Transferred Subsidiaries in a manner that would adversely
affect the ability of Seller to consummate the transactions contemplated by this
Agreement;




     (ii) transfer, issue, sell or dispose of any equity interests of Seller or the
Subsidiaries or grant options, warrants, calls or other rights to purchase or
otherwise acquire equity interests or other securities of Seller or the Subsidiaries
in a manner that would adversely affect the ability of Seller to consummate the
transactions contemplated by this Agreement, other than, in each case, to Parent,
Seller or a wholly-owned Subsidiary;




     (iii) effect any recapitalization, reclassification or like change in the
capitalization of the Transferred Subsidiaries;




     (iv) amend the organizational documents of the Transferred Subsidiaries;




     (v) (A) materially increase the annual level of compensation payable or to
become payable by Seller or the Subsidiaries to any Transferred Employee at a
managerial level or above, (B) grant any bonus, benefit or other direct or



48









 







indirect
compensation to any Transferred Employee, other than any (x) retention or
transaction bonuses that constitute Excluded Liabilities, (y) previously awarded
non-discretionary bonuses pursuant to bonus plans listed on Schedule
5.12, and (z) bonuses required to be granted by applicable Law, (C) increase the
coverage or benefits available under any (or create any new) severance pay,
termination pay, vacation pay, company awards, salary continuation for disability,
sick leave, deferred compensation, bonus or other incentive compensation, insurance,
pension or other employee benefit plan or arrangement made to, for, or with any
Transferred Employee (other than any broad-based modification of any Benefit Plan)
or otherwise modify, amend or terminate any Benefit Plan in a manner that could
result in any liability or increased liability to any Transferred Subsidiary, or (D)
enter into any employment, deferred compensation, severance, consulting,
non-competition or similar agreement (or amend any such agreement) with a
Transferred Employee, except for any “at will” employment arrangement with
non-managerial employees, and except, in each case, as required by applicable Law
from time to time in effect or by the terms of any Benefit Plans;




     (vi) subject to any Lien any of the Assets, except for Permitted Exceptions;




     (vii) sell, lease, license, transfer or otherwise dispose of any Assets which,
individually, have a book value in excess of $50,000, or will result in receipt of
gross proceeds in excess of $200,000, except for sales or other dispositions of
inventory and obsolete assets in the Ordinary Course of Business;




     (viii) make any material change in any method of accounting or accounting
practice with respect to the Business, other than in accordance with GAAP or as
required by applicable Law;




     (ix) cause any Transferred Subsidiary to incur any indebtedness for borrowed
money, guarantee any such indebtedness of another Person or issue any debt
securities or grant options, warrants, calls or other rights to purchase or
otherwise acquire any debt securities of the Transferred Subsidiaries;




     (x) cancel or compromise any material debt or claim or waive or release any
material right of Seller and the Subsidiaries related to the Business, the Assets,
the Assumed Liabilities or the Transferred Subsidiaries, other than as contemplated
by Section 7.12 with respect to intercompany debt among Parent, Seller, or any
Affiliate thereof, on the one hand, and the Transferred Subsidiaries, on the other
hand;




     (xi) solely with respect to any Business Employee, except as required by Law,
(A) enter into any labor or collective bargaining agreement or (B) through
negotiations or otherwise, make any commitment or incur any liability to any labor
organizations;



49









 






     (xii) enter into or agree to enter into any merger or consolidation with any
corporation or other entity, or acquire the securities or business of any other
Person;




     (xiii) amend, terminate or modify any Material Contract or enter into any
Contract which would have been required to be set forth on Schedule 5.11(a)
if such Contract were in effect as of the date hereof;




     (xiv) propose or consent to any change to the pricing of any Products, or offer
any discounts or Rebates to any customers of the Business;




     (xv) (A) terminate any Business Employee other than for cause or (B) hire any
new Business Employee performing sales or management functions except to fill any of
the openings identified on Schedule 7.2(b)(xv);




     (xvi) revalue any of the Assets, including without limitation writing down or
up the value of any Asset, writing off any Account Receivable, settling, discounting
or compromising any Account Receivable, or reversing any reserves, in each case,
other than as required by GAAP or applicable Law;




     (xvii) (A) make, rescind or change any material Tax election, annual Tax
accounting period or method of Tax accounting, (B) settle or compromise any material
Tax claim or assessment, (C) file any amended Tax Return or (D) surrender any right
to claim a material Tax refund, in each case, with respect to any of the Transferred
Subsidiaries; or




     (xviii) enter into any Contract or letter of intent to do anything prohibited
by this Section 7.2.



          7.3 Consents. Purchaser and Seller shall use their commercially reasonable efforts to
obtain, prior to Closing (or if not obtained by such time, at the earliest practicable date), all
Consents required to consummate the transactions contemplated by this Agreement, including, without
limitation, the Consents referred to in Sections 5.2(a), 5.2(b) and 6.3(b)
hereof; provided, however, that no party shall be obligated to pay any consideration to any third
party from whom Consent is requested.




          7.4 Further Assurances. Subject to the terms of this Agreement, each of Purchaser,
Parent and Seller shall use its commercially reasonable efforts to (i) take all actions necessary
or appropriate to consummate the transactions contemplated by this Agreement, (ii) cause the
fulfillment of all of the conditions to the other party’s obligations to consummate the
transactions contemplated by this Agreement and (iii) at any time, and from time to time, after the
Closing Date, execute such additional instruments and take such actions as may be reasonably
requested by the other parties to confirm or perfect or otherwise to carry out the intent and
purposes of this Agreement.




          7.5 Confidentiality.




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     (a) Purchaser acknowledges that the information provided to it in connection with this
Agreement and the transactions contemplated hereby is subject to the terms of the confidentiality
agreement between Purchaser and Parent, dated May 24, 2006 (the “Confidentiality
Agreement”), the terms of which are incorporated herein by reference; provided, that Purchaser
and its Representatives shall be permitted to disclose information that is not subject to
applicable privacy Laws as necessary and consistent with customary practices in connection with any
equity or debt financing that Purchaser may seek in connection with the transactions contemplated
by this Agreement. Effective upon, and only upon, the consummation of the Closing, the
Confidentiality Agreement shall terminate.



     (b) Parent and Seller recognize that by reason of their ownership of the Business and the
Assets, they and their respective subsidiaries have acquired confidential information and trade
secrets concerning the Business and the Assets, the use or disclosure of which could cause
Purchaser or its subsidiaries substantial loss and damages that could not be readily calculated and
for which no remedy at law would be adequate. Accordingly, Parent and Seller covenant and agree
with Purchaser that neither Parent nor Seller nor any of their respective subsidiaries will, prior
to May 24, 2009, except in performance of their respective obligations to Purchaser or with the
prior written consent of Purchaser, directly or indirectly, disclose any proprietary, secret or
confidential information relating to the Business and the Assets that any such Person may learn or
has learned by reason of its ownership of the Business and the Assets, unless (i) such information
becomes known to the public generally through no fault of Parent, Seller or any of their respective
subsidiaries, (ii) disclosure is required by applicable Law, or (iii) such information was not
previously known to Parent, Seller or any of their respective subsidiaries but becomes rightfully
known to Parent, Seller or such subsidiary after Closing, without restriction, from a source (other
than Purchaser and its subsidiaries) not related to Parent’s and Seller’s prior ownership of the
Business and the Assets and without any breach of duty to Purchaser or its subsidiaries. The
parties hereto agree that the covenant contained in this Section 7.5(b) imposes a
reasonable restraint on Parent and Seller and their respective subsidiaries.



          7.6 Preservation of Records. Parent, Seller and Purchaser agree that each of them
shall preserve and keep the records held by them relating to the Business, Assets and Assumed
Liabilities for a period of seven (7) years from the Closing Date, or such longer period as may be
required by applicable Law, and, subject to applicable Law, shall make such records and personnel
available to the other as may be reasonably required by such party in connection with, among other
things, any insurance claims by or Legal Proceedings against or governmental investigations of
Seller or Purchaser or any of their Affiliates or in order to enable Seller or Purchaser to comply
with their respective obligations under this Agreement and each other agreement, document or
instrument contemplated hereby or thereby; provided, however, that nothing herein shall be deemed
to alter Section 7.10, which shall govern the preservation of records with regard to Taxes.
In the event Seller or Purchaser wishes to destroy such records after that time, such party shall
first give ninety (90) days prior written notice to the other party and such other party shall have
the right at its option and expense, upon prior written notice given to such party within that
ninety (90) day period, to take possession of the records within sixty (60) days after the date of
such notice.




          7.7 Publicity.




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     (a) Parent, Seller and Purchaser shall not, and Seller shall cause the Subsidiaries not to,
issue any press release or public announcement concerning this Agreement or the transactions
contemplated hereby without obtaining the prior written approval of the other party hereto, which
approval will not be unreasonably withheld or delayed, unless, in the judgment of Parent, Seller or
Purchaser, disclosure is otherwise required by applicable Law or, in the case of Parent, the rules
and regulations of NASDAQ; provided, that, to the extent required by applicable Law, the party
intending to make such release shall use its commercially reasonable efforts consistent with
applicable Law or such rules and regulations to consult with the other party with respect to the
text thereof.



     (b) Each of Parent, Seller and Purchaser agree that the terms of this Agreement shall not be
disclosed or otherwise made available to the public and that copies of this Agreement shall not be
publicly filed or otherwise made available to the public, except where such disclosure,
availability or filing is required by applicable Law and only to the extent required by such Law.



          7.8 Employees and Employee Benefits.




     (a) Purchaser shall offer employment, commencing on the Closing Date, to all Business
Employees who are actively employed by Seller or one of the Retained Subsidiaries on the day
immediately preceding the Closing Date, and those Business Employees of Seller or any Retained
Subsidiary who are placed on disability, or who otherwise go on leave and cease to be on active
payroll of Seller or one of the Retained Subsidiaries, after the date hereof and prior to the
Closing Date (provided, however, that Purchaser shall only be required to offer employment to any
such Business Employee if he or she returns to active employment within six months (or, for any
such Business Employee on maternity, parental or other family leave, within such longer period as
may be required by applicable Law) of the Closing Date), and who are set forth on Schedule
5.13(c), on an “at-will” basis (except in the case of the Canada Employees or where prohibited
by applicable Law) and at a wage and salary level (excluding performance-based or incentive
compensation, bonuses and equity-based compensation) that is the same as that provided to such
employees on the day preceding the Closing Date. Purchaser shall offer employment to all actively
employed Canada Employees with such terms that are sufficient to avoid any obligation to provide
severance or any similar payment under applicable Law as a result of the termination of such
Business Employee’s employment by Seller or the Subsidiaries. Not later than fifteen (15) Business
Days after the date hereof, Seller shall provide Purchaser with all information regarding the
Canada Employees necessary for Purchaser to make offers of employment to such Canada Employees in
accordance with the preceding sentence. For the avoidance of doubt, each Business Employee of each
Transferred Subsidiary shall continue to be employed by or provide services to the respective
Transferred Subsidiary as of the Closing, pursuant to the same terms of employment or service that
are applicable to such Business Employee immediately prior to the Closing, and (unless otherwise
provided by applicable Law)
each such Business Employee shall not be treated as undergoing a termination of employment or
service as a result of the consummation of the transactions contemplated by this Agreement. Seller
shall make no promises, representations or guarantees to the Business Employees about the
possibility of their being hired or employed by Purchaser. Nothing in this Section 7.8(a)
shall obligate or otherwise require Purchaser to employ or otherwise retain any Business Employee
for any length of time. Seller shall provide Purchaser with reasonable access to such



52









 







employees
and shall not, with respect to the Business, enforce against any such employee any confidentiality,
non-compete, non-solicit or similar contractual obligations, or otherwise assert with respect to
any such employee or Purchaser or any of its Affiliates claims that would otherwise prohibit or
restrict such employee’s employment with Purchaser. Such employees who accept and commence
employment with Purchaser as of the Closing Date (or, with respect to Business Employees who are
placed on disability or who otherwise go on leave and cease to be on active payroll of Seller or
one of the Retained Subsidiaries after the date hereof and prior to the Closing Date, within six
months (or, for any such Business Employee on maternity, parental or other family leave, within
such longer period as may be required by applicable Law) following the Closing Date to the extent
they are on disability or not on active payroll as of the Closing Date), together with those
Business Employees who are employed by a Transferred Subsidiary on the day immediately preceding
the Closing Date, are referred to collectively as the “Transferred Employees.” Seller
shall be responsible for (i) the payment of any termination or severance payments (including under
the KERP) that are owed and (ii) the provision of health plan continuation coverage in accordance
with the requirements of COBRA or any similar applicable Law, as applicable, for any Business
Employees (including their eligible spouses and dependents) that are not actively employed by
Seller or one of the Subsidiaries on the day immediately preceding the Closing Date that in each
case result from such Business Employees’ employment by Seller or such Subsidiary, other than any
termination or severance payments (including under the KERP) to the extent payable as a result of
the transactions contemplated by this Agreement. Purchaser shall be responsible for (i) the
payment of any termination or severance payments (including under the KERP) that are owed and (ii)
the provision of health plan continuation coverage in accordance with the requirements of COBRA or
any similar applicable Law, as applicable, for any Business Employees (including their eligible
spouses and dependents) that are actively employed by Seller or one of the Subsidiaries on the day
immediately preceding the Closing Date that in each case result from such Business Employees’
employment by Seller or such Subsidiary and for all termination or severance payments (including
under the KERP) to the extent payable as a result of the transactions contemplated by this
Agreement.



     (b) For all purposes, including eligibility, vesting and benefit accrual (but excluding
benefit accrual under any defined benefit plan) under the employee benefit plans of Purchaser
providing benefits to Transferred Employees (the “Purchaser Plans”), Purchaser shall credit
each Transferred Employee with his or her years of service with Parent, Seller or the Subsidiaries,
as applicable, and any predecessor entities, to the same extent as such Transferred Employee was
entitled immediately prior to the Closing to credit for such service under any similar Benefit
Plan. The Purchaser Plans shall not deny Transferred Employees coverage on the basis of
pre-existing conditions, waiting time or any other eligibility requirements and shall credit such
Transferred Employees for any deductibles and out-of-pocket expenses paid in the year of initial
participation in the Purchaser Plans.



     (c) Except as required by applicable Law, as of the Closing Date the Transferred Employees
shall cease to accrue further benefits under the Parent Plans; provided, however, that Parent shall
take such actions as may be necessary to, effective immediately prior to the Closing Date, cause
all Transferred Employees to be fully vested in any unvested portion of their benefits under any
Benefit Plan that is a 401(k) plan. Except as otherwise expressly provided below in this Section
7.8(c) or in Section 7.8(d), from and after the Closing Date, Parent will retain all



53









 







obligations
and liabilities under the Parent Plans, and neither Purchaser nor any of its Affiliates will have
any obligation or liability with respect thereto. Purchaser will not assume sponsorship or any
liability with respect to any of the Parent Plans or any part thereof, and no Parent Plan and no
assets of any Parent Plan will be transferred to Purchaser or any of its Affiliates or to any plan
of Purchaser or any of its Affiliates. Notwithstanding the foregoing, Purchaser shall assume all
liability for each Transferred Employee’s vacation accrual outstanding as of the Closing Date to
the extent reflected in Working Capital as of the Closing Date. As of the Closing Date, Purchaser
shall assume all assets and liabilities with respect to the Transferred Benefit Plans. As soon as
practicable following the Closing, the Transferred Employees with account balances in Parent’s
401(k) plan shall be entitled to receive a lump sum distribution of such vested balances and, if
requested by any such employee, Purchaser’s 401(k) plan shall accept a direct rollover contribution
of such employee’s account balances pursuant to Code Section 401(a)(31). Parent and Purchaser
shall take (or shall cause to be taken) all actions reasonably necessary to effect the transfer of
assets in accordance with the foregoing sentence.



     (d) In the event of a termination of employment after the Closing Date of any Transferred
Employee who is a participant in Parent’s Key Employee Retention Plan (the “KERP”) as of
the Closing Date, Purchaser will provide such Transferred Employee with severance benefits which
are substantially similar in the aggregate to those provided for by the KERP, in accordance with
the terms of Section 4.01 and Schedule C of the KERP (and such other provisions of the KERP as are
necessary to give effect to such section, including the release provision of Section 4.03 thereof)
and in accordance with the terms of Schedule 7.8(d).



     (e) On the Closing Date, Seller shall deliver to Purchaser a list of all Business Employees
(by position and location of employment) who have terminated employment with the Company within 90
days of the Closing Date under circumstances that could give rise to liability under the WARN Act.
Purchaser and its Affiliates shall not terminate the employment of any Transferred Employee within
ninety (90) days following the Closing Date to the extent such termination would reasonably be
expected to result in any Liability to Parent or Seller under the WARN Act or any similar
applicable Law, and Purchaser shall provide written notice to Seller upon any termination of the
employment of any Transferred Employee by Purchaser or its Affiliates within ninety (90) days
following the Closing Date.



     (f) Purchaser and its Affiliates shall accept and agree to all of the terms and conditions of
any collective bargaining agreement or other labor union agreement or contract to which any
Transferred Subsidiary is a party as of the date hereof or entered into after the date hereof in
compliance with this Agreement.



     (g)




     (i) Canadian Purchaser shall establish or designate a registered pension plan
in Canada effective as of the Closing Date (the “Purchaser Canadian Plan”),
which shall have terms which are substantially similar to terms of Seller’s or its
Subsidiaries’ registered pension plan in Canada (the “Seller Canadian Plan”)
and with contribution rates no less favorable than those provided under the Seller
Canadian Plan in effect immediately prior to the Closing Date.



54









 






     (ii) Effective as of the Closing Date, the Transferred Employees who are
members of the Seller Canadian Plan shall begin to accrue benefits under the
Purchaser Canadian Plan, subject to applicable Laws. The period of service of the
Transferred Employees with Seller or its Subsidiaries prior to the Closing Date
shall be recognized in the Purchaser Canadian Plan for purposes of eligibility and
vesting and for purposes of any service based contribution rate.




     (iii) As soon as practicable following the Closing Date, Seller shall provide
to Purchaser a draft report (the “Draft Transfer Report”) which shall
identify, as at the Closing Date, the defined contribution assets held in the Seller
Canadian Plan in respect of the Transferred Employees, and shall set out such
information as is required by applicable Laws to request the consent of the Ontario
Superintendent of Financial Services (the “Superintendent”) to the transfer
of the defined contribution accounts of the Transferred Employees from the Seller
Canadian Plan to the Purchaser Canadian Plan.




     (iv) If Purchaser disagrees with any calculation set forth in the Draft
Transfer Report, Purchaser shall as soon as practicable deliver notice to Seller.
In the event of such notice, Seller and Purchaser shall discuss the disagreement,
and if they are unable to reach an agreement as to such calculation within fifteen
(15) calendar days after Seller’s receipt of the notice of Purchaser’s disagreement,
then Seller and Purchaser shall mutually engage the accounting firm of KPMG or any
other multi-national independent accounting firm mutually acceptable to the parties
(the “Independent Accountants”) which shall review such calculation. The
Independent Accountants’ determination of such calculation shall be final and
binding on all parties, absent fraud or arithmetic error. The cost of such
determination shall be borne equally by Seller and Purchaser.




     (v) If Purchaser accepts the Draft Transfer Report or after final
determination, pursuant to Section 7.8(g)(iv), of any disagreement, Seller
shall submit such report in final form (the “Transfer Report”) to the
Superintendent, and shall promptly provide to Purchaser a copy of all correspondence
from and to Seller regarding the Transfer Report.




     (vi) If the Superintendent does not consent to a transfer from the Seller
Canadian Plan in accordance with the Transfer Report, there shall be no transfer.
If the Superintendent consents to such a transfer, then as soon as practicable after
Seller’s receipt of such consent, Seller shall cooperate with Purchaser to
cause the transfer to the Purchaser Canadian Plan of cash, assets or a combination
of cash and assets, to be determined by mutual agreement between Seller and
Purchaser subject to the obtaining of any necessary Seller Canadian Plan member or
beneficiary consent, in respect of the defined contribution accounts of the
Transferred Employees who are members of the Seller Canadian Plan, all in accordance
with the Transfer Report.




     (vii) During the period between the Closing Date and the date on which assets
are transferred from the Seller Canadian Plan to the Purchaser Canadian




55









 






Plan
pursuant to this Section 7.8(g), (A) Seller shall administer the Seller
Canadian Plan in accordance with applicable Laws and the terms thereof, and shall
not make any changes to the Seller Canadian Plan in respect of the Transferred
Employees, except as may be required by applicable Laws; (B) Seller shall cause the
defined contribution account balances of the Transferred Employees to be invested
pursuant to the investment arrangements in effect under the Seller Canadian Plan at
the Closing Date, subject to such directions from the Transferred Employees as are
permitted under the terms of the Seller Canadian Plan and any reasonable
restrictions as determined by Seller which may be necessary to effect the transfer
of assets under Section 7.8(g)(vi), and shall cause such balances to be
adjusted to take into account the actual investment earnings or losses, as
applicable, under such investment arrangements; and (C) Seller shall cause the
funding agent of the Seller Canadian Plan to record and administer all disbursements
(including periodic or lump sum benefit payments and applicable plan and fund
related expenses) relating to the Transferred Employees in respect of and on behalf
of the Purchaser Canadian Plan. Following the transfer of the defined contribution
account balances of the Transferred Employees from the Seller Canadian Plan to the
Purchaser Canadian
Plan pursuant to this Section 7.8(g), Seller and the
Seller Canadian Plan shall have no obligations or liabilities relating to the
pension and other benefits and entitlements of the Transferred Employees under the
Seller Canadian Plan, except to the extent such obligation or liability was the
result of a breach of duty or other violation under applicable Laws occurring prior
to the transfer.




7.9 Supply Agreement; Transition Services Agreement.



     (a) Promptly after the date hereof, Seller and Purchaser shall negotiate in good faith the
terms, duration and cost of a supply agreement for insulated wire products of Seller’s CableTech
Business for use in the Business (the “Supply Agreement”). The general principles to be
applicable to the Supply Agreement shall be that (i) the initial term will be one (1) year from the
Closing Date, and (ii) if during the term of the Supply Agreement Purchaser receives a bona fide
offer from another supplier to sell the same or similar insulated wire products as those covered by
the Supply Agreement at a price lower than the prices set forth in the Supply Agreement, Purchaser
may provide written notice and reasonable evidence of such offer to Seller and Seller shall, thirty
(30) days following receipt of such notice,
meet said price for all subsequent purchases under the Supply Agreement; provided, that Seller
shall not be required to reduce the initial prices set forth in the Supply Agreement by more than
five percent (5%) prior to the date that is one hundred eighty (180) days following the Closing
Date.



     (b) Transition Services. Promptly after the date hereof, the parties shall negotiate
in good faith the terms, duration and cost of a transition services agreement (the “Transition
Services Agreement”). The general principles to be applicable to the Transition Services
Agreement shall be as follows:




     (i) Parent, Seller and the Retained Subsidiaries shall provide to Purchaser
those services provided to the Business or the Transferred Subsidiaries on or prior
to the date hereof or otherwise reasonably requested by Purchaser in



56









 






order to allow
for the operation of the Business in the Ordinary Course of Business, including (A)
shared facility space at Parent’s offices in Westland, Michigan, (B) finance and
accounting support services, including payroll processing, accounts payable
processing, accounting, Hyperion system support, credit, collections and cash
application services, and bank/lock box transition, (C) information technology
application support services, including system operations and support and
specifically requested special projects, and (D) information technology data
processing services, including software services, fixed asset systems, and hosting,
maintenance, collocation, Internet connection, tape storage/disaster recovery and
router maintenance services (the “Services”);




     (ii) Purchaser will be billed for services provided by (A) third party vendors
under the software license agreements between QAD, Inc. and Parent, including
maintenance and licensing, and (B) and data, voice, cellular and Blackberry services
(the “Third Party Services”) either directly by the vendors or by Parent or Seller
presenting vendor invoices to Purchaser for reimbursement;




     (iii) All Services to be provided by Parent, Seller and the Retained
Subsidiaries (excluding the direct billed Third Party Services noted in (ii) above)
shall be provided at their costs historically charged to the Business for such
Service or, for all Services which were not previously charged to the Business, for
no charge for the six month period after the closing and for the period thereafter
for an aggregate amount for all such Services not to exceed Eighty Eight Thousand
Dollars ($88,000), which aggregate amount shall be allocated among specific Services
in a mutually agreeable manner;




     (iv) Services shall be made available for a minimum of six (6) months, with the
ability of Purchaser to extend such Service for a period not to exceed twelve (12)
months from Closing. The general principle will be for Purchaser to migrate away
from utilizing a particular Service as soon as reasonably practicable and
commercially reasonable; and




     (v) Purchaser shall be permitted to terminate any one or more of the Services
upon fifteen (15) days prior notice of its intention to terminate such
Services, and such termination of such Services shall not in and of itself,
terminate the Transition Services Agreement.




7.10 Tax Matters.



     (a) Control of Tax Audits. Purchaser shall promptly notify Parent in writing upon
receipt by any Transferred Subsidiary of a written notice of any pending or threatened Tax audits
or assessments for which the Parent or Seller may have liability pursuant to this Agreement, and
Parent shall have the right to represent the interests of the Transferred Subsidiaries in any Tax
audit or administrative or court proceeding (a “Tax Proceeding”) relating to any Tax for
any Pre-Closing Tax Period (excluding Tax with respect to any Straddle Period) (a “Pre-Closing
Tax Proceeding”) and to employ counsel of its choice; provided, that if the results of such
Pre-Closing Tax Proceeding could reasonably be expected to have a material adverse effect on



57









 




Purchaser, any of Purchaser’s Affiliates or any of the Transferred Subsidiaries for any
Post-Closing Tax Period (an “Adverse Pre-Closing Tax Proceeding”), then Parent shall (i)
keep Purchaser informed regarding the progress and substantive aspects of any Adverse Pre-Closing
Tax Proceeding, (ii) provide Purchaser with an opportunity to comment on any written materials to
be submitted to the applicable Governmental Body in connection with an Adverse Pre-Closing
Proceeding and (iii) shall not compromise or settle an Adverse Pre-Closing Tax Proceeding without
Purchaser’s prior written consent, which consent shall not be unreasonably withheld, conditioned or
delayed. Parent shall promptly notify Purchaser if it decides not to control the defense or
settlement of any such Pre-Closing Tax Proceeding and Purchaser thereupon shall be permitted to
defend and settle such Pre-Closing Tax Proceeding. With respect to any Tax Proceeding (excluding
any Pre-Closing Tax Proceeding) of any of the Transferred Subsidiaries relating to a Straddle
Period, Parent and Purchaser shall jointly control the defense and settlement of any such Tax
Proceeding and each party shall cooperate with the other party at its own expense and there shall
be no settlement or closing or other agreement with respect thereto without the consent of the
other party, which consent shall not be unreasonably withheld, conditioned or delayed. Purchaser
shall have the right to represent the interests of the Transferred Subsidiaries in any Tax
Proceeding relating to any Tax for any Post-Closing Tax Period (excluding Tax with respect to any
Straddle Period) and to employ counsel of its choice; provided, that if the results of such
Post-Closing Tax Proceeding could reasonably be expected to have a material adverse effect on
Parent or any of Parent’s Affiliates for any Post-Closing Tax Period or give rise to an indemnity
claim pursuant to Section 9.1 (an “Adverse Post-Closing Tax Proceeding”), then
Purchaser shall (i) keep Parent informed regarding the progress and substantive aspects of the
portion of such Adverse Post-Closing Tax Proceeding that could give rise to any indemnification by
Parent or any of its Affiliates, (ii) provide Parent with an opportunity to comment on any written
materials to be submitted to the applicable Governmental Body in connection with such portion of
such Adverse Post-Closing Proceeding and (iii) shall not compromise or settle such portion of such
Adverse Post-Closing Tax Proceeding without Parent’s prior written consent, which consent shall not
be unreasonably withheld, conditioned or delayed.




     (b) Tax Returns. Purchaser shall, or cause the Transferred Subsidiaries to, properly
prepare or cause to be properly prepared, and shall timely file or cause to be timely filed, all
Tax Returns of the Transferred Subsidiaries that are required to be filed after the Closing Date
except for any federal or state income Tax Returns of Noma O.P., Inc. for a Pre-Closing Tax Period
that are filed on a combined, unitary, or consolidated basis with any of Parent, Seller or their
Subsidiaries, which Parent or Seller shall cause to be filed; provided, that Parent shall reimburse
Purchaser for (i) all reasonable out-of-pocket costs incurred in preparing Tax Returns of the
Transferred Subsidiaries that relate to periods ending on or prior to the Closing Date and (ii) a
portion of all reasonable out-of-pocket costs incurred in preparing Straddle Period Tax Returns of
the Transferred Subsidiaries, which costs shall be apportioned based upon the number of days
relating to the pre-Closing portion of the Straddle Period (such Tax Returns to be filed by or on
behalf of Purchaser, “Transferred Subsidiary Tax Returns”). Purchaser shall engage
Deloitte & Touche LLP, or another nationally recognized firm mutually selected by Purchaser and
Parent, to prepare the income Tax Returns of the Transferred Subsidiaries for Pre-Closing Periods
and Straddle Periods. The Transferred Subsidiary Tax Returns shall be prepared in a manner
consistent with past practices, unless such past practices are not in accordance with applicable
Law. Purchaser shall provide Parent with drafts of all Transferred Subsidiary Tax Returns for all



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Pre-Closing Tax Periods (including Tax Returns that cover Straddle Periods) no later than thirty
(30) days prior to the earlier of the due date or filing date thereof, taking into account all
applicable extensions. Parent shall have the right to review and provide comments on such
Transferred Subsidiary Tax Returns during the fifteen (15) day period following the receipt of such
Transferred Subsidiary Tax Returns and Purchaser shall accept all reasonable comments to the extent
such comments affect Taxes of the Transferred Subsidiaries in a Pre-Closing Tax Period. No later
than five (5) Business Days prior to the due date for the payment of any Taxes with respect to any
such Transferred Subsidiary Tax Return (giving effect to extensions) or five (5) Business Days
following written request from Purchaser, whichever is later, Seller shall pay Purchaser an amount
equal to the portion of Taxes attributable to the Pre-Closing Tax Period, as determined pursuant to
the principles set forth in Section 7.10(e), except to the extent such Taxes are accrued
and taken into account in determining Final Working Capital.




     (c) Cooperation; Other Tax Matters. Seller and Purchaser shall cooperate fully with
each other in connection with the preparation and timely filing of any Tax Returns required to be
prepared and filed by Purchaser, the Transferred Subsidiaries, Parent or Seller hereunder, or in
connection with the Business, or in connection with the preparation or filing of any election,
claim for refund, consent or certification of any Transferred Subsidiary (including access to
books, records and individuals). For the avoidance of doubt, each party shall retain all Tax
Returns and other records and information relating to Taxes with respect to the Business in
possession of such party immediately following the Closing until the expiration of the applicable
statute of limitations.



     (d) Transfer Taxes. All sales (including bulk sales), use, value added, goods and
services, documentary, stamp, gross receipts, registration, transfer, conveyance, excise,
recording, license, stock transfer stamps, and other similar Taxes and fees (“Transfer
Taxes”) arising out of or in connection with or attributable to the transactions effected
pursuant to this Agreement shall be paid one-half by Purchaser and one-half by Seller, in each case
to the extent such Transfer Taxes are not recoverable to such party or an
Affiliate thereof. Seller and Purchaser shall use their respective commercially reasonable
efforts to deliver certain of the Assets, as appropriate, through an electronic delivery or in such
other manner reasonably calculated and legally permitted, and take all other commercially
reasonable actions necessary, including the filing of any elections, refund claims or other
documents, to minimize or avoid the incurrence of Transfer Taxes.



     (e) Straddle Periods. Taxes attributable to Straddle Periods (including any Taxes
resulting from a Tax audit or administrative or court proceeding but excluding any property or ad
valorem Taxes) shall be apportioned to the period ending on the Closing Date and to the period
beginning on the day after the Closing Date by means of a closing of the books and records of
Seller or the applicable Subsidiary, as the case may be, and with respect to the Business as of the
close of business on the Closing Date, and property and ad valorem Taxes shall be apportioned
between the Pre-Closing Tax Period and the Post-Closing Tax Period based on the number of days in
the period that ends on or prior to the Closing Date and based on the number of days in the
Straddle Period beginning after the Closing Date such that the amount allocated to the Pre-Closing
Tax Period shall equal the tax due for the Straddle Period multiplied by a fraction, the numerator
of which is the number of days in the Straddle Period ending on the Closing Date and the
denominator of which is the number of days in the Straddle Period and the amount of Tax



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allocable
to the Post-Closing Tax Period shall equal the tax due for the Straddle Period less the amount
allocable to the Pre-Closing Tax Period.




     (f) Allocation of the Purchase Price. The Parties agree that the total consideration,
as determined for tax purposes paid for the Assets, including, for the avoidance of doubt, the
Transferred Securities, will be allocated to such Assets in accordance with Section 1060 of the
Code and the rules and regulations promulgated thereunder and any similar provision of state, local
and foreign law, as appropriate. Seller and Purchaser will cooperate to agree on the amount of
such consideration that is allocable to the Transferred Securities of the Foreign Transferred
Subsidiaries by Closing and will attach a schedule setting forth such allocation to this Agreement
at Closing. Seller shall provide Purchaser with a proposed schedule detailing how the remainder of
such consideration is allocable to the Assets (other than the Transferred Securities of the Foreign
Subsidiaries) within ninety (90) days following the Closing Date (the “Allocation
Schedule”). Within 30 days after the receipt of the Allocation Schedule, Purchaser will
propose to Seller any changes to the Allocation Schedule. Purchaser and Seller will endeavor in
good faith to resolve any differences with respect to the Allocation Schedule within 30 days after
Seller’s receipt of notice of objection or suggested changes from Purchaser. If an agreement is
reached, Seller and Purchaser agree that for income tax purposes, they shall report the
transactions contemplated by this Agreement in accordance with such allocation, provided that
nothing contained herein shall prevent Seller, Purchaser or the Transferred Subsidiaries from
settling any proposed deficiency or adjustment by any taxing authority based on or arising out of
the allocation agreed to by Purchaser and Seller pursuant to this Section 7.10(f) and none of
Seller, Purchaser or the Transferred Subsidiaries will be required to litigate before any court any
proposed deficiency or adjustment by any taxing authority challenging such allocation. If,
however, Purchaser and Seller cannot in good faith resolve any differences with respect to the
Allocation Schedule, Purchaser and Seller shall prepare separate allocations.



     (g) Tax Refunds. Any Tax refunds of a Transferred Subsidiary that are received by
such Transferred Subsidiary, and any amounts credited against Taxes that would otherwise be payable
by a Transferred Subsidiary in a Post-Closing Tax Period, with respect to Taxes paid by such
Transferred Subsidiary in a Pre-Closing Tax Period shall be for the account of Parent and Seller,
and Purchaser shall pay over to Parent any such refund or the amount of any such credit within
fifteen (15) days after receipt or entitlement thereto. In addition, to the extent that a claim
for a Tax refund or a Tax proceeding results in a payment or credit against Tax by a taxing
authority to Purchaser or its Affiliates (including any Transferred Subsidiary) of any Tax
liability of a Transferred Subsidiary taken into account in the calculation of Final Working
Capital and has not otherwise been taken into account under this Section 7.10(g), Purchaser
shall pay such amount (net of any reasonable out-of-pocket expenses incurred to obtain such Tax
refund or credit and net of any Taxes imposed on such Transferred Subsidiary as a result of the
receipt of such Tax refunds or credit) to Parent within fifteen (15) days after receipt or entitle
thereto. Any amount paid by Purchaser to Seller under this Section shall be treated as an
adjustment to the purchase price paid for the stock of the Transferred Subsidiaries that receive
such refund or credit.



     (h) Amended Tax Returns and Other Post-Closing Actions. Unless otherwise required by
applicable Law, none of Purchaser, the Transferred Subsidiaries or their Affiliates shall amend any
Tax Return filed with respect to any Pre-Closing Tax Period of the Transferred



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Subsidiaries without
the express written consent of Parent, which shall not be unreasonably withheld, conditioned or
delayed. None of Purchaser or its Affiliates (including the Transferred Subsidiaries) shall take
any action on the Closing Date other than in the Ordinary Course of Business or as contemplated
under this Agreement if such action could increase the Tax Liability or indemnification obligations
of Seller or its Affiliates.




     (i) Section 338 Election. Seller shall reasonably determine in good faith and advise
Purchaser in writing, as soon as reasonably practicable following the final determination of the
Allocation pursuant to Section 7.10(f), but in no event later than one hundred eighty (180)
days following the Closing Date, whether an election under Section 338 of the Code with respect to
the acquisition of each Transferred Subsidiary (each election, a “338 Election”) can be
made without any adverse effect on Seller. If Seller determines that there is no adverse effect
from a 338 Election with respect to a Transferred Subsidiary, Purchaser may make a 338 Election for
such Transferred Subsidiary without the Seller’s prior written consent. If Seller determines that
there is an adverse effect of making a 338 Election with respect to a Transferred Subsidiary,
Purchaser shall not make a 338 Election for such Transferred Subsidiary without the Seller’s prior
written consent.



     (j) GST Elections. Canadian Purchaser will be registered under Part IX of the Excise
Tax Act (Canada) as of immediately prior to the Closing. At the Closing, Canadian Purchaser and
Canadian Seller shall execute jointly an election under Section 167 of the Excise Tax Act (Canada)
to have the sale of the Purchased Assets take place on a goods and services tax-free basis under
Part IX of the Excise Tax Act (Canada), and Canadian Purchaser shall file the election in the
manner and within the time prescribed by the applicable Law. Purchaser shall indemnify and hold
Seller harmless in respect of any goods and services tax, penalties, interest and other amounts
which may be assessed against Canadian Seller as a result of the transactions
under this Agreement not being eligible for such election or as a result of the Canadian
Purchaser’s failure to file the election within the prescribed time.



     (k) ITA Election. Canadian Purchaser and Canadian Seller shall timely execute jointly
an election in prescribed from under Section 22 of the Income Tax Act (Canada) as to the sale of
Accounts Receivable of the Canadian Seller and shall designate in such election an amount equal to
the portion of the Purchase Price allocated to such assets pursuant to Section 7.10(f) as the
consideration paid therefor.



     (l) Provincial Sales Tax Certificate. Seller shall obtain and provide to Purchaser at
the Closing, or as soon as is reasonably possible thereafter, a certificate (a “Clearance
Certificate”) pursuant to section 6 of the Retail Sales Tax Act (Ontario) indicating that
Seller has paid all provincial sales taxes collectable or payable by Seller up to the Closing or
has entered into satisfactory arrangements with the Ontario Ministry of Finance for the payment of
such provincial sales taxes.



          7.11 Use of Name.




     (a) Purchaser agrees that it shall, and shall cause the Transferred Subsidiaries to, (i) as
soon as practicable after the Closing Date and in any event within ninety (90) days following the
Closing Date, cease to make any use of the name “GenTek” or any other service



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marks, domain names,
trademarks, trade names, identifying symbols, logos, emblems, signs or insignia related thereto or
containing or comprising the foregoing, including any name or mark confusingly similar thereto
(collectively, the “Seller Marks”), (ii) immediately after the Closing, cease to hold
itself out as having any affiliation with Parent or any of its Affiliates (other than the
Transferred Subsidiaries) and (iii) effective as of the Closing, in the case of any Transferred
Subsidiary whose name includes the name “GenTek”, change its corporate name to a name that does not
include the name “GenTek” and make any necessary legal filings with the appropriate Governmental
Body to effect such change. In furtherance thereof, as promptly as practicable but in no event
later than ninety (90) days following the Closing Date, Purchaser shall, and shall cause the
Transferred Subsidiaries to, remove, strike over or otherwise obliterate all Seller Marks from all
materials owned by Purchaser or any Transferred Subsidiary, including, without limitation, any
vehicles, business cards, schedules, stationery, packaging materials, displays, signs, promotional
materials, manuals, forms, computer software and other materials. Notwithstanding the foregoing,
Purchaser and the Transferred Subsidiaries shall be entitled to use and sell in the Ordinary Course
of Business all inventory, packaging materials, product literature, brochures and promotional
materials existing or on order on the Closing Date until all such inventory, packaging materials,
product literature, brochures and promotional materials are used, sold or otherwise disposed of.




     (b) Parent and Seller agree that they shall, and shall cause the Retained Subsidiaries to, (i)
as soon as practicable after the Closing Date and in any event within ninety (90) days following
the Closing Date, cease to make any use of the name “Noma” or any other service
marks, domain names, trademarks, trade names, identifying symbols, logos, emblems, signs or
insignia related thereto or containing or comprising the foregoing, including any name or mark
confusingly similar thereto (collectively, the “Transferred Marks”), and (ii) effective as
of the Closing, in the case of Seller or any Retained Subsidiary whose name includes the name
“Noma”, change its corporate name to a name that does not include the name “Noma” and make any
necessary legal filings with the appropriate Governmental Body to effect such change. In
furtherance thereof, as promptly as practicable but in no event later than ninety (90) days
following the Closing Date, Seller shall, and shall cause the Retained Subsidiaries to, remove,
strike over or otherwise obliterate all Transferred Marks from all materials owned by Seller or any
Retained Subsidiary, including, without limitation, any vehicles, business cards, schedules,
stationery, packaging materials, displays, signs, promotional materials, manuals, forms, computer
software and other materials, other than Transferred Marks contained in minute books and other
Books and Records maintained by Seller or any Retained Subsidiary not included in the Assets.
Notwithstanding the foregoing, Seller and the Retained Subsidiaries shall be entitled to use and
sell in the Ordinary Course of Business all inventory, packaging materials, product literature,
brochures and promotional materials existing or on order on the Closing Date until all such
inventory, packaging materials, product literature, brochures and promotional materials are used,
sold or otherwise disposed of.



          7.12 Termination of Intercompany Obligations. Except as set forth on Schedule
7.12 and for the Transition Services Agreement, the Supply Agreement and the other Transaction
Documents, on or prior to the Closing Date, Seller shall cause to be terminated and cancelled (x)
all intercompany accounts payable and other obligations from Seller or the Retained Subsidiaries to
the Transferred Subsidiaries, to the extent that they are greater than all intercompany accounts
payable and other obligations from the Transferred Subsidiaries to Seller




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or the Retained
Subsidiaries, (y) all intercompany accounts payable and other obligations from the Transferred
Subsidiaries to Seller or the Retained Subsidiaries, to the extent that they are greater than all
intercompany accounts payable and other obligations from Seller or the Retained Subsidiaries to the
Transferred Subsidiaries, and (z) all agreements between Seller or the Retained Subsidiaries and
the Transferred Subsidiaries, in each case in all respects such that there is no liability
thereunder on the part of Seller or such Subsidiary or such Transferred Subsidiary. Seller and
Purchaser shall cooperate in good faith to mutually agree on determining which intercompany
accounts payable and other obligations shall be terminated and cancelled pursuant to clauses (x)
and (y) hereof. Except as expressly set forth in this Agreement, on or prior to the Closing Date,
Seller shall cause to be terminated and cancelled all indemnity obligations from the Transferred
Subsidiaries to Seller or the Retained Subsidiaries, and all indemnity obligations from Seller or
the Retained Subsidiaries to the Transferred Subsidiaries, in each case, in all respects such that
there is no liability thereunder on the part of Seller or such Subsidiary or such Transferred
Subsidiary except as contemplated hereby. Seller and the Retained Subsidiaries shall cause the
foregoing to be effectuated without any cost or expense to the Transferred Subsidiaries or the
Business.




          7.13 Non-Competition.




     (a) In consideration of Purchaser entering into this Agreement and in order that Purchaser and
the Canadian Purchaser may enjoy the full benefit of the Assets and the Business acquired from
Seller and the Canadian Seller,




     (i) for a period of five (5) years from and after the Closing Date (the
“Noncompetition Period”), neither Parent, Seller nor any of their respective
subsidiaries shall, directly or indirectly, whether as principal, agent, partner,
officer, director, stockholder, employee, consultant or otherwise, alone or in
association with any other Person, own, manage, operate, control, participate in,
invest in (other than an investment that results in such Person owning less than 5%
of the outstanding voting stock of a publicly traded company), or carry on a
business which, directly or indirectly, is in competition with the Business anywhere
in the world other than Canada;




     (ii) Parent shall cause Canadian Seller to execute and deliver to Purchaser and
Canadian Purchaser at the Closing an agreement (the “Canada Non-Competition
Covenant”), pursuant to which Canadian Seller shall agree that during the
Noncompetition Period, Canadian Seller shall not, and shall cause Parent, Seller and
their respective subsidiaries (other than Canadian Seller) not to, directly or
indirectly, whether as principal, agent, partner, officer, director, stockholder,
employee, consultant or otherwise, alone or in association with any other Person,
own, manage, operate, control, participate in, invest in (other than an investment
that results in such Person owning less than 5% of the outstanding voting stock of a
publicly traded company), or carry on a business which, directly or indirectly, is
in competition with the Business anywhere in Canada;



          provided, however, that in no event shall any purchaser of the CableTech Business, or any
Affiliates of such purchaser (in each case that is not an Affiliate of Parent or




63









 







Seller), be
subject to the obligations set forth in this Section 7.13 and in the Canada Non-Competition
Covenant so long as such purchaser or any of its Affiliates, at the time of such purchaser’s
acquisition of the CableTech Business, directly or indirectly, whether as principal, agent,
partner, officer, director, stockholder, employee, consultant or otherwise, alone or in association
with any other Person, owns, manages, operates, controls, participates in, invests in (other than
an investment that results in such Person owning less than 5% of the outstanding voting stock of a
publicly traded company), or carries on a business which, directly or indirectly, is in competition
with the Business.




     (b) For greater certainty, the parties agree that the Canada Non-Competition Covenant is an
integral part of this Agreement, including the agreements and documents under Section 2.5
hereof. Canadian Seller and Canadian Purchaser acknowledge and agree that no amount of the
Purchase Price received or receivable by or allocated to the Canadian Seller is allocated
explicitly to the Canada Non-Competition Covenant. The Canadian Seller and Canadian Purchaser
agree to file any joint election, if required, to ensure that proposed subsection 56.4(5) of the
Income Tax Act (Canada) or amendment to such proposal as enacted as Law or a successor provision
thereto applies.



     (c) Parent, Seller and Canadian Seller acknowledge and agree that the remedy at law for any
breach, or threatened breach, of any of the provisions of this Section 7.13 and of the
Canada Non-Competition Covenant will be inadequate and, accordingly, Parent, Seller and Canadian
Seller covenant and agree that Purchaser and Canadian Purchaser shall, in addition to any other
rights and remedies which Purchaser may have at law, be entitled to equitable relief, including
injunctive relief, and to the remedy of specific performance with respect to any breach or
threatened breach of such covenant, as may be available from any court of competent jurisdiction.
In addition, Parent, Seller, Canadian Seller, Purchaser and Canadian Purchaser agree that the terms
of the covenant in this Section 7.13 and in the Canada Non-Competition Covenant are fair
and reasonable in light of Purchaser’s and Canadian Purchaser’s plans for the Assets and the
Business and are necessary to accomplish the full transfer of the goodwill and other intangible
assets contemplated hereby. In the event that any of the covenants contained in this Section
7.13 and in the Canada Non-Competition Covenant shall be determined by any court of competent
jurisdiction to be unenforceable for any reason whatsoever, then any such provision or provisions
shall not be deemed void, and the parties hereto agree that said limits may be modified by the
court and that said covenant contained in this Section 7.13 and in the Canada
Non-Competition Covenant shall be amended in accordance with said modification, it being
specifically agreed by the parties that it is their continuing desire that this covenant be
enforced to the full extent of its terms and conditions or if a court finds the scope of the
covenant unenforceable, the court should redefine the covenant so as to comply with applicable Law.



          7.14 Non-Solicitation.




     (a) For three (3) years after the Closing Date, Parent and Seller shall not, and shall cause
their respective subsidiaries (other than the Transferred Subsidiaries) not to, whether for their
own account or for the account of any Person, solicit (excluding general solicitations by newspaper
or other public media or non-directed third-party search firm), offer employment to or hire any
Transferred Employee.



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     (b) For three (3) years after the Closing Date, Purchaser shall not, and shall cause its
subsidiaries not to, whether for their own account or for the account of any Person, solicit
(excluding general solicitations by newspaper or other public media or non-directed third-party
search firm), offer employment to or hire any employee of Parent or any of its subsidiaries.



          7.15 Insurance.




     (a) To the extent that any insurance policies or binders cover any loss, liability, claim,
damage or expense relating to the Business (other than the Excluded Assets and the Excluded
Liabilities), the Assets, the Assumed Liabilities or the Retained Aviation Products and relating to
or arising out of occurrences or wrongful acts prior to the Closing Date and such policies continue
after the Closing Date to permit claims to be made thereunder with respect to such occurrences or
acts prior to the Closing Date, Parent, Seller and their Affiliates shall cooperate with Purchaser
and its Affiliates to submit any such claims, including filing and furnishing
required notices for the benefit of or on behalf of Purchaser or its Affiliates under such
policies or pursuing claims previously made. Parent and Seller shall use their reasonable best
efforts so that, on and after the Closing Date, Purchaser and its Affiliates will be able to have
the right to make claims for indemnification to the extent possible under the terms of such
policies and, to the extent assignable, shall assign the right to make such claims to Purchaser.



     (b) If there shall have been suffered between the date of this Agreement and the Closing Date
any casualty or loss relating to the Assets, then at the Closing all claims to insurance proceeds
or other rights of Seller or any of its Subsidiaries against third parties relating to such
casualty or loss shall (to the extent assignable) be separately assigned by Seller or its
Subsidiaries to Purchaser (to the extent such proceeds have not been applied to mitigate such
casualty or loss). To the extent not so assignable, Seller shall, and shall cause its Subsidiaries
to, remit all proceeds received from insurers or third parties to the extent related to such claims
(and to the extent such proceeds have not been applied to mitigate such casualty or loss) to
Purchaser.



          7.16 No Solicitation or Negotiation. Parent and Seller agree that between the date of
this Agreement and the earlier of (i) the Closing and (ii) the termination of this Agreement,
neither Parent nor Seller, nor any of their respective Affiliates or Representatives will (A)
solicit, initiate, encourage or accept any other proposals or offers from any Person (other than
Purchaser) (x) relating to any acquisition or purchase of all or any portion of the Assets or the
Business, other than in connection with the sale of Inventory in the Ordinary Course of Business,
or (y) to enter into any business combination or other extraordinary business transaction, except
in the case of this clause (y) as would not have a Material Adverse Effect or as would not
materially impair or delay the ability of Parent and Seller to perform their respective obligations
under this Agreement, (B) release any Person from, or waive any provision of, any confidentiality
agreement that relates to the Assets or the Business, or (C) participate in any discussions,
conversations, negotiations or other communications regarding, or furnish to any other Person
(other than Purchaser) any information with respect to, or otherwise cooperate in any way, assist
or participate in, facilitate or encourage any effort or attempt by any other Person to seek to do
any of the foregoing. Parent and Seller immediately shall cease and cause to be terminated all
existing discussions, conversations, negotiations and other communications with any Persons
conducted heretofore with respect to any of the foregoing. Parent and Seller shall notify
Purchaser promptly if any such proposal or offer, or any




65









 







inquiry or other contact with any Person
with respect thereto, is made and shall, in any such notice to Purchaser, indicate in reasonable
detail the identity of the Person making such proposal, offer, inquiry or contact and the principal
terms and conditions of such proposal, offer, inquiry or other contact.




          7.17 Certain Notices. From and after the date of this Agreement until the Closing,
Parent and Seller, on the one hand, and Purchaser, on the other, shall promptly notify each other
orally and in writing of (a) any notice or other communication from any Person alleging that the
consent of such Person is or may be required in connection with the transactions contemplated by
this Agreement or by the Transaction Documents, (b) any Legal Proceedings commenced or threatened
against, relating to or involving or otherwise affecting such party that, if pending on
the date of this Agreement, would have been required to be disclosed pursuant to Article
V, in the case of Parent and Seller, or Article VI, in the case of Purchaser, or that
relate to the transactions contemplated by this Agreement or the Transaction Documents, (c) any
circumstance, effect, change, event or development known to it that (i) individually or taken
together with all other circumstances, effects, changes, events or developments known to it, has
had, or would reasonably be expected to have, a Material Adverse Effect or (ii) would result in, or
would reasonably be expected to result in, any of the conditions to the Closing set forth in
Article VIII not being satisfied or which would adversely affect, in any material respect,
the ability of the parties to consummate the transactions contemplated by this Agreement or by the
Transaction Documents on a timely basis, and (d) in the case of Parent and Seller, any customer
listed on Schedule 5.21 or supplier listed on Schedule 5.22, threatening any
material modification or change in, or termination of, its business or other relationship with the
Business.




          7.18 Successors.




     (a) In the event that following the Closing Date Parent or Seller (or any of their respective
successors or assigns) shall, prior to the expiration or termination of all of Parent’s and
Seller’s obligations under this Agreement, including Parent’s and Seller’s obligations pursuant to
Article IX and Section 7.10 hereof, which continue in effect after the consummation
of such transaction, (i) consolidate or merge with any other Person and shall not be the continuing
or surviving corporation or entity in such consolidation or merger, (ii) transfer all or
substantially all of its properties and assets to any other Person, or (iii) adopt a plan of
dissolution or liquidation, then in each case proper provision shall be made so that the continuing
or surviving corporation or entity (or its successors or assigns, if applicable), or transferee of
such assets, or such liquidating trust or other agent, as the case may be, shall expressly assume
all of Parent’s and Seller’s obligations under this Agreement, including Parent’s and Seller’s
obligations pursuant to Article IX and Section 7.10 hereof, which continue in
effect after the consummation of such transaction. Prior to any such transaction, Parent and
Seller shall notify Purchaser of any transaction that would trigger the terms of this Section
7.18, including the identity of the continuing or surviving corporation or entity, transferee,
liquidating trust or other agent, as the case may be.



     (b) In the event that following the Closing Date Purchaser (or any of its successors or
assigns) shall, prior to the expiration or termination of all of Purchaser’s obligations under this
Agreement, including Purchaser’s obligations pursuant to Article IX and Section
7.10 hereof, which continue in effect after the consummation of such transaction, (i)
consolidate or merge



66









 




with any other Person and shall not be the continuing or surviving corporation
or entity in such consolidation or merger, (ii) transfer all or substantially all of its properties
and assets to any other Person, or (iii) adopt a plan of dissolution or liquidation, then in each
case proper provision shall be made so that the continuing or surviving corporation or entity (or
its successors or assigns, if applicable), or transferee of such assets, or such liquidating trust
or other agent, as the case may be, shall expressly assume all of Purchaser’s obligations under
this Agreement, including Purchaser’s obligations pursuant to Article IX and Section
7.10 hereof, which continue in effect after the consummation of such transaction. Prior to any
such transaction, Purchaser shall notify Parent of any transaction that would trigger the terms of
this Section 7.18, including
the identity of the continuing or surviving corporation or entity, transferee, liquidating
trust or other agent, as the case may be.




          7.19 Bulk Sales. Purchaser waives compliance with the provisions of the Bulk Sales
Act (Ontario).




ARTICLE VIII




CONDITIONS TO CLOSING




          8.1 Conditions Precedent to Obligations of Purchaser. The obligation of Purchaser to
consummate the transactions contemplated by this Agreement is subject to the fulfillment, on or
prior to the Closing Date, of each of the following conditions (any or all of which may be waived
by Purchaser in whole or in part to the extent permitted by applicable Law):




     (a) the representations and warranties of Seller and Parent set forth in this Agreement shall
be true and correct as of the date of this Agreement and as of the Closing Date with the same
effect as though made as of the Closing Date (except that the accuracy of representations and
warranties that by their terms speak as of a specified date will be determined as of such date);
provided, however, that in the event of a breach of a representation or warranty, the condition set
forth in this Section 8.1(a) shall be deemed satisfied unless the effect of all such
breaches of representations and warranties taken together have resulted in, or would reasonably be
expected to result in, a Material Adverse Effect;



     (b) Seller and Parent shall have performed and complied in all material respects with all
obligations and agreements required by this Agreement to be performed or complied with by them on
or prior to the Closing Date;



     (c) there shall not be in effect any Order by a Governmental Body of competent jurisdiction
restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated
hereby;



     (d) there shall not be pending or threatened any investigation or Legal Proceeding to which a
Governmental Body is a party (i) seeking to restrain or prohibit the consummation of the
transactions contemplated hereby or (ii) seeking to prohibit or limit the ownership or operation by
Purchaser of any material portion of the Business or the Assets.



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     (e) since the date hereof, there shall not have occurred or be continuing a Material Adverse
Effect;



     (f) Seller shall have delivered to Purchaser (i) all necessary Consents of parties to any
Contract set forth on Schedule 8.1(f)(i) and (ii) all necessary approvals by or
registrations with any Governmental Body set forth on Schedule 8.1(f)(ii);



     (g) Seller and Parent shall have executed and delivered to Purchaser the instruments described
in Section 4.2(a);



     (h) Seller shall have delivered to Purchaser a duly and validly executed copy of all
agreements, instruments, certificates and other documents, in form and substance reasonably
satisfactory to Purchaser, that are necessary or appropriate to evidence the release of all Liens
to which any of the Assets are subject other than Permitted Exceptions, and all guarantees,
indemnities, and other liabilities and obligations set forth on Schedule 8.1(h);



     (i) Seller shall have delivered to Purchaser a certificate(s) in form and substance reasonably
satisfactory to Purchaser, duly executed and acknowledged, certifying any facts that would exempt
the transactions contemplated hereby from withholding under section 1445 of the Code and the
Treasury Regulations promulgated thereunder; and



     (j) (A) Seller shall have shut down the operations of the Business at the Concord Facility;
(B) Seller shall have transitioned the production of the Business at the Concord Facility, and
relocated all Tangible Personal Property (other than the Remaining Concord Assets) located at the
Concord Facility, to other facilities operated by the Business; and (C) such relocated production
shall be fully installed at such other facilities of the Business and producing product in a
substantially similar manner as it produced product at the Concord Facility.



          8.2 Conditions Precedent to Obligations of Seller. The obligations of Seller to
consummate the transactions contemplated by this Agreement are subject to the fulfillment, prior to
or on the Closing Date, of each of the following conditions (any or all of which may be waived by
Seller in whole or in part to the extent permitted by applicable Law):




     (a) the representations and warranties of Purchaser set forth in this Agreement shall be true
and correct as of the date of this Agreement and as of the Closing Date with the same effect as
though made as of the Closing Date (except that the accuracy of representations and warranties that
by their terms speak as of a specified date will be determined as of such date); provided, however,
that in the event of a breach of a representation or warranty, the condition set forth in this
Section 8.2(a) shall be deemed satisfied unless the effect of all such breaches of
representations and warranties taken together have resulted in, or would reasonably be expected to
result in, a material adverse effect on Purchaser’s ability to consummate the transactions
contemplated hereby;



     (b) Purchaser shall have performed and complied in all material respects with all obligations
and covenants required by this Agreement to be performed or complied with by Purchaser on or prior
to the Closing Date;



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     (c) there shall not be in effect any Order by a Governmental Body of competent jurisdiction
restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated
hereby;



     (d) Seller shall have obtained all necessary Consents of parties to any Contract set forth on
Schedule 8.2(d);



     (e) there shall not be pending or threatened any investigation or Legal Proceeding to which a
Governmental Body is a party seeking to restrain or prohibit the consummation of the transactions
contemplated hereby;



     (f) at least thirty (30) days shall have passed from the date that Seller or Parent receives
written notice from Purchaser of (i) any circumstance, effect, change, event or development known
to Purchaser that, individually or taken together with all other circumstances, effects, changes,
events or developments known to Purchaser, has had, or would reasonably be expected to have, a
Material Adverse Effect or (ii) a breach of any representation, warranty, covenant or agreement of
Seller or Parent set forth in this Agreement; provided, however, that this paragraph (f) shall not
be applicable to any such Material Adverse Effect or breach which is not capable of being cured by
Seller or Parent during such thirty (30) day period through the exercise of its commercially
reasonable efforts; and



     (g) Purchaser shall have executed and delivered to Seller the instruments described in
Section 4.2(b).



          8.3 Frustration of Closing Conditions. None of Purchaser or Seller may rely on the
failure of any condition set forth in Sections 8.1 or 8.2, as the case may be, if
such failure was caused by such party’s failure to comply with any provision of this Agreement.




ARTICLE IX




INDEMNIFICATION




          9.1 Indemnification.




     (a) Following the Closing, subject to the provisions of this Article IX and
Section 10.1, Parent and Seller hereby jointly and severally agree to indemnify and hold
Purchaser, the Transferred Subsidiaries and their respective directors, officers, employees,
stockholders, Affiliates, agents, successors and assigns (collectively, the “Purchaser
Indemnified Parties”) harmless from and against any and all losses, liabilities, obligations,
damages, assessments, judgments, costs, penalties and expenses, including reasonable attorneys’ and
other professionals’ fees and disbursements (collectively, “Losses”), based upon,
attributable to or resulting from:




     (i) the failure of any representation or warranty of Seller or Parent set forth
in Article V hereof, or any representation or warranty contained in any certificate
delivered by or on behalf of Seller or Parent pursuant to this Agreement, to be true
and correct in all respects as of the date made;



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     (ii) the breach of any covenant or other agreement on the part of Seller or
Parent under this Agreement and the breach of any covenant or other
agreement on the part of Canadian Seller under the Canada Non-Competition
Covenant;




     (iii) any Excluded Liabilities;




     (iv) Liabilities under or relating to Environmental Laws, including, without
limitation, the presence or release of Hazardous Materials on, in, under or from the
Owned Properties in excess or violation of Environmental Laws, to the extent
relating to events or conditions existing as of, or prior to, the Closing Date;




     (v) (A) all Taxes imposed on any of the Transferred Subsidiaries for any
Pre-Closing Tax Period and (B) all Taxes of any Person imposed on any of the
Transferred Subsidiaries (1) as a result of being a member on or prior to the
Closing Date of any consolidated, combined, affiliated or unitary Tax group or (2)
as a transferee or successor, by contract, or otherwise; and




     (vi) any failure to comply with the provisions of the Bulk Sales Act (Ontario).


Notwithstanding the foregoing, Parent and Seller shall not be required to indemnify any Purchaser
Indemnified Parties pursuant to clause (v) above or as a result of a breach of a representation or
warranty contained in Section 5.7 for any Losses to the extent relating to Taxes arising
out of or resulting from (i) a reduction in any net operating loss, capital loss, tax credit
carryover or other Tax asset generated in a Pre-Closing Tax Period (including any Pre-Closing Tax
Period portion of a Straddle Period), (ii) any transaction that occurs on the Closing Date after
the Closing has occurred that is not in the Ordinary Course of Business, or (iii) any transaction
of the Transferred Subsidiaries occurring after the Closing Date.




     (b) Following the Closing, subject to the provisions of this Article IX and
Section 10.1, Purchaser hereby agrees to indemnify and hold Seller, Parent and their
respective directors, officers, employees, Affiliates, agents, successors and assigns
(collectively, the “Seller Indemnified Parties”) harmless from and against any and all
Losses based upon, attributable to or resulting from:




     (i) the failure of any representation or warranty of Purchaser set forth in
Article VI hereof, or any representation or warranty contained in any certificate
delivered by or on behalf of Purchaser pursuant to this Agreement, to be true and
correct as of the date made;




     (ii) the breach of any covenant or other agreement on the part of Purchaser
under this Agreement; and




     (iii) any Assumed Liabilities.



     (c) Materiality and Material Adverse Effect qualifications shall be given effect for purposes
of determining the failure of any representations or warranties to be actionable under




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Section 9.1(a)(i)
or Section 9.1(b)(i), but shall be disregarded for purposes of calculating
Losses under this Article IX. Notwithstanding anything to the contrary herein, the parties
hereto agree
and acknowledge that an indemnified party may bring a claim for indemnification for any Losses
under this Article IX notwithstanding the fact that such indemnified party had knowledge of
the breach, event or circumstance giving rise to such loss prior to the Closing or waived any
condition to the Closing related thereto.




          9.2 Limitations on Indemnification for Breaches of Representations and Warranties.




     (a) An indemnifying party shall not have any liability under Section 9.1(a)(i) or Section
9.1(b)(i) hereof:




     (i) unless and until the total amount of Losses to the Seller Indemnified
Parties or the Purchaser Indemnified Parties, respectively, finally determined to
arise thereunder based upon, attributable to or resulting from the breach of all
representations and warranties, exceeds, in the aggregate, Seven Hundred Thousand
Dollars ($700,000) (the “Deductible”), and then only to the extent such
Losses exceed the Deductible; provided, however, that the Deductible and the Cap
specified in subsection (ii) below shall not apply to breaches of Sections 5.1
(Organization and Good Standing; Authorization), 5.3 (Subsidiaries), 5.7 (Taxes),
5.24 (Title To Assets), 6.1 (Organization and Good Standing), or 6.2 (Authorization
of Agreement); and




     (ii) for any Losses for which the indemnifying parties have liability in excess
of Fifteen Million Dollars ($15,000,000) (the “Cap”) once the total amount
of Losses to the indemnified parties finally determined to arise thereunder based
upon, attributable to or resulting from the breach of all representations and
warranties exceeds the Cap.



     (b) The aggregate amount of Losses payable to the Purchaser Indemnified Parties pursuant to
this Agreement shall in no event exceed the amount of the Purchase Price.



     (c) Purchaser shall not make any claim for indemnification under this Article IX in
respect of any matter that is taken into account in the calculation of Closing Date Working Capital
pursuant to Section 3.1.



          9.3 Indemnification Procedures.




     (a) A claim for indemnification for any matter not involving a Third Party Claim may be
asserted by notice to the party from whom indemnification is sought. The failure of any party
entitled to indemnification hereunder to give reasonably prompt notice thereof shall not release,
waive or otherwise affect the indemnifying party’s obligations with respect thereto except to the
extent that the indemnifying party can demonstrate actual loss or prejudice as a result of such
failure.



     (b) In
the event that any Legal Proceedings shall be instituted or that any claim or demand
shall be asserted by any third Person (other than such Legal Proceedings, claim or



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demand with
respect to Taxes, which shall be governed by the provisions of Section 7.10) (a “Third
Party Claim”) in respect of which indemnification may be sought under Section 9.1
hereof (regardless of the Deductible or the Cap referred to above), the indemnified party shall
reasonably and promptly cause written notice of the assertion of any Third Party Claim of which it
has knowledge which is covered by this indemnity to be forwarded to the indemnifying party. The
failure of the indemnified party to give reasonably prompt notice of any Third Party Claim shall
not release, waive or otherwise affect the indemnifying party’s obligations with respect thereto
except to the extent that the indemnifying party can demonstrate actual loss or prejudice as a
result of such failure. The indemnifying party shall have the right, at its sole option and
expense, to be represented by counsel of its choice, which must be reasonably satisfactory to the
indemnified party, and to defend against, negotiate, settle or otherwise deal with any Third Party
Claim which relates to any Losses indemnified against hereunder. If the indemnifying party elects
to defend against, negotiate, settle or otherwise deal with any Third Party Claim which relates to
any Losses indemnified against hereunder, it shall within thirty (30) days after its receipt of
notice of a Third Party Claim from the indemnified party (or sooner, if the nature of the Third
Party Claim so requires) notify the indemnified party of its intent to do so. If the indemnifying
party elects not to defend against, negotiate, settle or otherwise deal with any Third Party Claim
which relates to any Losses indemnified against hereunder, the indemnified party may defend
against, negotiate or otherwise deal with such Third Party Claim; provided, however, that the
indemnified party shall not be permitted to settle or consent to the entry of any judgment with
respect to such Third Party Claim without the prior written consent of the indemnifying party
(which shall not be unreasonably withheld). If the indemnified party defends any Third Party
Claim, then the indemnifying party shall reimburse the indemnified party for the reasonable and
documented expenses of defending such Third Party Claim upon submission of periodic bills. If the
indemnifying party shall assume the defense of any Third Party Claim, the indemnified party may
participate, at his or its own expense, in the defense of such Third Party Claim; provided,
however, that such indemnified party shall be entitled to participate in any such defense with
separate counsel at the expense of the indemnifying party if (i) so requested by the indemnifying
party to participate or (ii) in the reasonable opinion of counsel to the indemnified party, a
conflict or potential conflict exists between the indemnified party and the indemnifying party that
would make such separate representation advisable; and provided, further, that the indemnifying
party shall not be required to pay for more than one such counsel for all indemnified parties in
connection with any Third Party Claim. The parties hereto agree to cooperate fully with each other
in connection with the defense, negotiation or settlement of any such Third Party Claim.




     (c) After any final judgment or award shall have been rendered by a court, arbitration board
or administrative agency of competent jurisdiction and the time in which to appeal therefrom shall
have expired, or a settlement shall have been consummated, or the indemnified party and the
indemnifying party shall have arrived at a mutually binding agreement with respect to a Third Party
Claim hereunder (any such final judgment, settlement or agreement, a “Final
Determination”), the indemnified party shall forward to the indemnifying party notice of any
sums due and owing by the indemnifying party pursuant to this Agreement with respect to such
matter.




     (i) Notwithstanding paragraphs (b) and (c) above, if a Third Party Claim
involves a claim (A) seeking injunctive relief with respect to the operation



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of the
Business, (B) seeking to impose criminal (other than misdemeanors) fines, penalties
or sanctions or (C) by a current material customer or supplier of the Business or
Purchaser (each such Third Party Claim, an “Excluded Claim”), then the
indemnified party shall, upon written notice to the indemnifying party at the time
notice of such Excluded Claim is first given to the indemnifying party, have the
right to elect to either (x) assume the defense of such Excluded Claim, in which
case, such Excluded Claim shall be subject to clause (ii) below, or (y) submit such
Excluded Claim to the indemnifying party pursuant to paragraph (b) above, in which
case the procedures in paragraph (b) above shall apply to such Excluded Claim.




     (ii) If an indemnified party elects to assume the defense of an Excluded Claim,
such indemnified party shall, at its own expense, be permitted to defend against,
negotiate, settle or otherwise deal with such Excluded Claim and shall not be
obligated to seek the indemnifying party’s consent to any settlement (except in
connection with an Excluded Claim pursuant to clause (i)(C) of this Section
9.3(c), in which case the indemnified party shall not be permitted to settle
such Excluded Claim without the prior written consent of the indemnifying party
(which shall not be unreasonably withheld)). The indemnifying party shall be
permitted, at its own expense, to participate in the defense of such Excluded Claim.
Upon a Final Determination, the indemnified party shall be permitted to proceed
directly against the indemnifying party for the amount of Losses incurred by reason
of such Excluded Claim pursuant to paragraph (a) above (including all expenses
incurred by such indemnified party in connection with such Excluded Claim; provided,
however, that it is acknowledged and agreed by the parties hereto that the issue of
the indemnifying party’s liability for such Excluded Claim and the amount of any
applicable Losses shall be addressed de novo and the indemnifying party shall not be
prejudiced by any Final Determination with respect to such Excluded Claim).



          9.4 Sole Remedy. The parties hereto agree that their respective remedies under
Article IX of this Agreement are their exclusive remedies under this Agreement from and
after the Closing Date, including without limitation, any matter based on the inaccuracy, untruth,
incompleteness or breach of any representation or warranty of any party hereto contained herein or
based on the failure of any covenant, agreement or undertaking herein, and the parties hereto
hereby waive any claims with respect to any other indemnity available against any indemnifying
party hereunder in such capacity on the basis of common law, statute or otherwise beyond the
express terms of this Agreement; provided, however, that this exclusive remedy for damages does not
preclude a party from bringing an action for fraud. Notwithstanding the foregoing, this
Section 9.4 shall not operate to interfere with or impede the operation of the provisions
of (i) Section 7.10 providing for the resolution of certain disputes with respect to Tax
matters and indemnification for any such matters or (ii) Section 7.13 or 7.14 with
respect to Parent’s or Purchaser’s right to seek equitable remedies (including specific performance
or injunctive relief).




          9.5 Limitation on Losses.





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     (a) NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, THE LIABILITY FOR INDEMNIFICATION
OF ANY INDEMNIFYING PARTY UNDER THIS AGREEMENT SHALL NOT EXCEED THE ACTUAL DAMAGES OF THE PARTY
ENTITLED TO INDEMNIFICATION AND SHALL NOT OTHERWISE INCLUDE INCIDENTAL, CONSEQUENTIAL, INDIRECT,
SPECIAL, PUNITIVE, EXEMPLARY OR OTHER SIMILAR DAMAGES, OTHER THAN COMPENSATORY DAMAGES.



     (b) The amount of Losses payable under this Article IX by the indemnifying party shall
be reduced (i) by any amounts actually recovered by the indemnified parties under insurance
policies or from any other Person alleged to be responsible for any Losses, net of any expenses
incurred by such indemnified party in collecting such amounts; provided, however, that nothing
herein shall require any indemnified party to seek to obtain such recoveries, and (ii) to take
account of any Tax benefit of the indemnified parties arising from the incurrence of the Loss
giving rise to the payment of any such indemnified amount, to the extent such Tax benefit is
realized in the current and all future taxable years that the Losses are incurred. In computing
the amount of any net Tax benefit, the indemnified party shall be deemed to recognize all other
items of income, gain, loss, deduction or credit before recognizing any item arising from the
receipt of any indemnity payment hereunder or the incurrence or payment of any indemnified Losses,
and the Losses shall only be reduced at the time such Tax benefit is realized by the indemnified
party. A Tax benefit will be considered to be realized on (A) the date on which the Tax benefit is
received as a refund of Taxes, or (B) to the extent that the Tax benefit is not received as a
refund of Taxes but rather is claimed as an item that reduces liability for Taxes, the due date of
the Tax Return that reflects such change in liability for Taxes.



          9.6 Tax Treatment of Indemnity Payments. Each of Seller and Purchaser agree to treat
any indemnity payment made pursuant to this Article IX as an adjustment to the Purchase
Price for federal, state, local and foreign income Tax purposes.




          9.7 Environmental Losses. Notwithstanding any other provision of this Agreement, the
Purchaser Indemnified Parties shall not be entitled to indemnification with respect to Losses under
Section 9.1(a)(iv) to the extent resulting from any investigation of environmental conditions
conducted by or at the direction of Purchaser to the extent involving physically invasive testing
procedures such as soil and groundwater sampling, other than any such investigation other than any
such investigation required or otherwise initiated for a legitimate business purpose (which shall
not include an investigation initiated solely for purpose of obtaining indemnification pursuant to
Section 9.1(a)(iv)) or required under applicable Law or by any Order.




          9.8 Subrogation. If any indemnifying party makes any payment under this Article IX in respect of any Losses,
such indemnifying party shall be subrogated, to the extent of such payment, to the rights of the
indemnified party against any third party with respect to such Losses; provided, however, that the
indemnifying party shall not have any rights of subrogation hereunder with respect to the other
Party hereto or any of its Affiliates or customers, or any of their respective officers, directors,
agents or employees.




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ARTICLE X




MISCELLANEOUS




          10.1 Survival of Representations, Warranties and Covenants. The representations,
warranties and pre-closing covenants and agreements of the parties made herein or in any other
document or agreement delivered pursuant to this Agreement shall survive and remain in full force
and effect for a period of eighteen (18) months after the Closing Date, notwithstanding any
investigation made by or on behalf of Purchaser; provided, however, that (a) the representations
and warranties of Parent and Seller contained in Sections 5.1 (Organization and Good
Standing; Authorization), 5.3 (Subsidiaries), 5.17 (Financial
Advisors), 5.24 (Title to Assets), 6.1 (Organization and Good
Standing) and 6.2 (Authorization of Agreement) shall survive indefinitely, (b)
the representations and warranties of Parent and Seller contained in Section 5.7
(Taxes) (other than the representation and warranty set forth in Section 5.7(f), which
shall survive for eighteen (18) months after the Closing Date) shall survive and remain in full
force and effect until ninety (90) days after the expiration of the applicable statute of
limitations or statutory Tax assessment period (including all periods of extension, whether
automatic or permissive), and (c) the representations and warranties specified in Section
5.16 (Environmental Matters) and obligations arising under Section 9.1(a)(iv)
shall survive and remain in full force and effect until five years after the Closing Date (the
applicable period, the “Survival Period”), and there shall be no liability in respect
thereof to any party hereto or their Affiliates in respect thereof after the expiration of the
Survival Period, whether such liability has accrued prior to or after the Closing Date except as to
any matters with respect to which a bona fide written claim shall have been made within the
Survival Period, in which event survival shall continue (but only with respect to, and to the
extent of, such claim) until such claim shall have been finally resolved. All covenants and
agreements, which, by their terms, contemplate performance after the Closing Date, shall survive in
accordance with their terms.




          10.2 Expenses. Except as otherwise provided in this Agreement, Purchaser shall bear
its expenses and Parent and Seller shall bear their expenses and the expenses of the Subsidiaries,
incurred in connection with the negotiation and execution of this Agreement and each other
agreement, document and instrument contemplated by this Agreement and the consummation of the
transactions contemplated hereby and thereby.




          10.3
Submission to Jurisdiction; Consent to Service of Process.




     (a) Any litigation against any party hereto, including any to enforce any judgment entered by
any court in respect thereof, may be brought in any federal or state court of competent
jurisdiction located in State of New York, and the parties hereto hereby irrevocably submit to the
exclusive jurisdiction of any federal or state court located within New York, New York, over any
such action. The parties hereby irrevocably waive, to the fullest extent permitted by applicable
Law, any objection which they may now or hereafter have to the laying of venue of any such action
brought in such court or any defense of inconvenient forum for the maintenance of such action.
Each of the parties hereto agrees that a judgment in any such action may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by Law.



75









 





     (b) Each of the parties hereto hereby consents to process being served by any party to this
Agreement in any suit, action or proceeding by delivery of a copy thereof in accordance with the
provisions of Section 10.6.



          10.4 Entire Agreement; Amendments and Waivers. This Agreement (including the
schedules and exhibits hereto), the Transition Services Agreement, the Supply Agreement and the
Confidentiality Agreement represent the entire understanding and agreement between the parties
hereto with respect to the subject matter hereof. This Agreement can be amended, supplemented or
changed, and any provision hereof can be waived, only by written instrument making specific
reference to this Agreement signed by the party against whom enforcement of any such amendment,
supplement, modification or waiver is sought. No action or nonaction taken pursuant to this
Agreement, including without limitation, any investigation by or on behalf of any party, shall be
deemed to constitute a waiver by the party taking such action or nonaction of compliance with any
representation, warranty, covenant or agreement contained herein. The waiver by any party hereto
of a breach of any provision of this Agreement shall not operate or be construed as a further or
continuing waiver of such breach or as a waiver of any other or subsequent breach. No failure on
the part of any party to exercise, and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or
remedy by such party preclude any other or further exercise thereof or the exercise of any other
right, power or remedy.




          10.5 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made and performed in such state.




          10.6 Notices. All notices and other communications under this Agreement shall be in
writing and shall be deemed given (i) when delivered personally by hand (with written confirmation
of receipt), (ii) when sent by facsimile (with written confirmation of transmission) or (iii) one
Business Day following the day sent by overnight courier (with written confirmation of receipt), in
each case at the following addresses and facsimile numbers (or to such other address or
facsimile number as a party may have specified by notice given to the other party pursuant to
this provision):



If to Parent or Seller, to:



GenTek Inc.

90 East Halsey Road

Parsippany, NJ 07054

Facsimile: (973) 515-3244

Attention: James Imbriaco




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With a copy to:



Latham & Watkins LLP

555 Eleventh Street, NW

Suite 1000

Washington, DC 20004-1304

Facsimile: (202) 637-2201

Attention: Raymond B. Grochowski



If to Purchaser, to:



Electrical Components International, Inc.

101 South Hanley Road

Suite 1050

St. Louis, Missouri 63105

Facsimile: (314) 261-7799

Attention: David Webster, Chief Executive Officer



and



Francisco Partners, L.P.

2882 Sand Hill Road, Suite 280

Menlo Park, California 94025

Facsimile: (650) 233-2999

Attention: David T. ibnAle 



With a copy to:



O’Melveny & Myers LLP

Embarcadero Center West

275 Battery Street

Suite 2600

San Francisco, CA 94111

Facsimile: (415) 984-8701

Attention: Michael J. Kennedy

                 Michael S. Dorf




          10.7 Severability. If any term or other provision of this Agreement is invalid,
illegal, or incapable of being enforced by any Law or public policy, all other terms or provisions
of this Agreement shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision is invalid,
illegal, or incapable of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as possible in an
acceptable manner in order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.





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          10.8 Binding Effect; Assignment. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and permitted assigns. Nothing in this
Agreement shall create or be deemed to create any third party beneficiary rights in any Person not
a party to this Agreement. No assignment of this Agreement or of any rights or obligations
hereunder may be made by Seller or Purchaser, directly or indirectly (by operation of Law or
otherwise), without the prior written consent of the other party hereto and any attempted
assignment without the required consents shall be void. No assignment of any obligations hereunder
shall relieve the parties hereto of any such obligations; provided, however, that Purchaser may
assign its rights and interests without Parent’s or Seller’s consent (i) to any of its Affiliates
or (ii) for collateral security purposes to any lender providing any financing to Purchaser or any
of its Affiliates; provided, further, however, in each case of clauses (i) and (ii), any such
assignment shall not relieve Purchaser of its obligations hereunder.




          10.9 Counterparts. This Agreement may be executed in one or more counterparts, each
of which will be deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement.




[Remainder Of Page Intentionally Left Blank]





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          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the date first written above.




	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	ELECTRICAL COMPONENTS	 	 
	 	 	INTERNATIONAL, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	NOMA HOLDING, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	GENTEK INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 







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