Corella Electric Wire and Cable Inc. Pursues Lawsuit Against Belden Inc.; CEWC on the Brink of Bankruptcy.

Business Editors & High-Tech/Legal Writers

PHOENIX--(BUSINESS WIRE)--March 4, 2002

For nearly 10 years Corella Electric Wire and Cable Inc. ("CEWC") has been Arizona's largest Minority Business Enterprise ("MWBE"), a significant employer of minority employees, and a contributor of financial support to the community.

During that time CEWC manufactured and supplied telecommunication cable to AT&T and its successors Cable Systems International ("CSI") and Belden Inc. ("Belden"). Belden is a NYSE publicly traded company (ticker "BWC"), whose chairman, president and CEO is Baker Cunningham.

AT&T originally chose CEWC for this strategic alliance from 97 candidates, following a notice of the program by AT&T in the Wall Street Journal. AT&T initiated the program so that it could sell telecommunications cable to Pacific Telesis, which was obligated by California law to obtain product with minority content. Belden assumed CEWC's contracts in 1999.

The relationship between AT&T and CEWC was the subject of a Sept. 30, 1993, Harvard Business School case study by Professor J. Gregory Dees to establish the significance and importance of Fortune 100 companies using MWBEs to enhance productivity and profitability.

According to that case study:

CEWC was a Hispanic-owned and controlled company located in

Phoenix. Its president had grown up in the barrios of Phoenix and

eventually founded his own electrical contracting business that,

over its 16-year history, became one of the fastest-growing

Hispanic-owned businesses in the United States. For his

accomplishments, he had recently received the 1992 Arizona

Minority Small Businessperson of the Year Award from the U.S.

Department of Commerce. In order to form CEWC and win this

contract, he joined forces with a team of four young entrepreneurs

who brought graduate business school training, a high level of

energy, strategic planning skills and a diversity of experience

(manufacturing, technical, and financial) to the venture. Two of

these entrepreneurs were also Hispanic, with roots in the Phoenix

area.

Peter Woog (Vice President of AT&T's Copper Cable Products

business) was optimistic that CEWC and AT&T would enjoy a good and

productive relationship. There were many possibilities for

expansion of Opportunity Park and Woog hoped that other ventures

of this type would be created in the near future. Al Riggin,

purchasing manager AT&T Phoenix, was pleased with the impact CEWC

would have on the percentage of purchases from MWBEs. "In 1992,

the Phoenix Works paid more than $170 million to suppliers -- and

yet less than 3% went to MWBEs. In CEWC's first year of operation,

they will have a business that will manufacture more than six

billion conductor feet of wire on an annual basis. That will just

about triple our MWBE payments."

Since the relevant contracts prohibit CEWC from selling cable to any other entity, each of Belden and its predecessors has been CEWC's sole customer and sole source of revenue. During this time AT&T, CSI and Belden generated significant revenue and received significant tax benefits from the business relationship with CEWC because of CEWC's status as a MWBE.

Belden has refused to pay CEWC the amounts due under its MWBE contracts with CEWC. In order to enforce its rights, CEWC has commenced litigation against Belden in Arizona Superior Court, Cause No. CV-2001-022535, seeking over $8,000,000 in damages resulting from Belden's actions. CEWC also attempted to negotiate an agreement with Belden that would allow it to stay in business, but Belden refused to enter into such an agreement.

According to John Corella, CEWC's president and CEO, "Belden's refusal to comply with the terms of our contracts forced CEWC to terminate its manufacturing activities, and left the company with no viable course except to proceed with litigation against Belden to recover its damages."

Following the termination of its manufacturing activities, CEWC made its completed cable and remaining product available to Belden for purchase. Following weeks of inspections by Belden's representatives and discussions between the parties, on Friday, March 1, 2002, Belden sent CEWC a written notice that Belden will not purchase any of the product, and further purported to terminate CEWC's lease at the facility as of March 6, 2002.

According to Mr. Corella: "Belden's precipitous action and refusal to purchase the remaining product may force CEWC into bankruptcy."

Because of the pendency of the lawsuit, Mr. Corella has referred all questions regarding these subjects to CEWC's attorneys at Brown & Bain, P.A., Phoenix, AZ (602/351-8000).

CEWC anticipates that all of its creditors will be paid in full. CEWC deeply regrets the loss of employment resulting from the shutdown and its effects upon its former employees.