EXHIBIT 2.1
ANNEX 1
OEI INTERNATIONAL, INC.
UNIFORM PROVISIONS
FOR THE
ACQUISITION
OF
FOUNDING COMPANIES
WORDS AND TERMS USED IN THESE UNIFORM PROVISIONS WHICH ARE
DEFINED IN THE AGREEMENT AND PLAN OF REORGANIZATION AMONG OEI INTERNATIONAL,
INC., [NEWCO], [NAME OF ACQUISITION CANDIDATE] AND ITS STOCKHOLDERS NAMED
THEREIN (CALLED THEREIN AND HEREIN "THIS AGREEMENT") TO WHICH THESE UNIFORM
PROVISIONS ARE ATTACHED AS ANNEX I, ARE USED HEREIN AS DEFINED THEREIN.
THE UNIFORM PROVISIONS
ARTICLE I
ADDITIONAL DEFINITIONS
Section 1.02 ADDITIONAL DEFINED TERMS. As used in this Agreement, the
following terms have the meanings assigned to them below:
"ACQUISITION PROPOSAL" has the meaning specified in Section 6.05.
"AFFILIATE" means, as to any specified Person, any other Person
who, directly or indirectly through one or more intermediaries or
otherwise, controls, is controlled by or is under common control with
the specified Person. As used in this definition, "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person (whether through
ownership of Capital Stock of the Person, by contract, or otherwise).
"BUSINESS DAY" means a day other than Saturday, Sunday or any day
on which banks located in New York, New York or Houston, Texas are
authorized or obligated to close.
"CAPITAL LEASE" means a lease of (or other agreement conveying
the right to use) real or personal property that is required to be
classified and accounted for as a capital lease under GAAP as in effect
on the date of this Agreement.
"CAPITAL STOCK" means, with respect to: (a) any corporation, any
share, or any depositary receipt or other certificate representing any
share, of an equity ownership interest in the corporation; and (b) any
other Entity, any share, membership or other percentage interest, unit
of participation or other equivalent (however designated) of an equity
interest in the Entity.
"CASH COMPENSATION" means, as applied to any employee,
nonemployee director or officer of, or any natural person who performs
consulting or other independent contractor services for, the Company or
any Company Subsidiary, the wages, salaries, bonuses (discretionary and
formula), fees and other cash compensation paid or payable by the
Company and each Company Subsidiary to that employee or other natural
person.
"CERCLA" means the Comprehensive Environmental Response,
Conservation, and Liability Act of 1980.
"CERTIFICATE OF MERGER" means: (a) if the Surviving Corporation
is a Delaware corporation, the certificate of merger respecting the
Merger which contains the information
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required by the DGCL to effect the Merger; and (b) if the Company's
Organization State is not Delaware, the articles or certificate of
merger respecting the Merger which contains the information required by
the laws of the Company's Organization State to effect the Merger.
"CHARTER DOCUMENTS" means, with respect to any Entity at any
time, in each case as amended, modified and supplemented at that time,
(a) the articles or certificate of formation, incorporation or
organization (or the equivalent organizational documents) of the Entity,
(b) the bylaws or limited liability company agreement or regulations (or
the equivalent governing documents) of the Entity, and (c) each document
setting forth the designation, amount and relative rights, limitations
and preferences of any class or series of the Entity's Capital Stock or
of any rights in respect of the Entity's Capital Stock.
"CLAIM NOTICE" has the meaning specified in Section 9.05.
"CLOSING" has the meaning specified in Section 1.01.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPANY COMMITMENT" has the meaning specified in Section 4.22.
"COMPANY ERISA BENEFIT PLAN" has the meaning specified in Section
4.26(d).
"COMPANY ERISA PENSION PLAN" has the meaning specified in Section
4.26(d).
"COMPANY ERISA GROUP" means any "group of organizations" within
the meaning of Section 414(b), (c), (m) or (o) of the Code, or any
"controlled group" as defined in Section 4001(a)(14) of ERISA, of which
the Company is a member.
"COMPANY SUBSIDIARY" means at any time any Entity that is a
Subsidiary of the Company at that time.
"CONFIDENTIAL INFORMATION" means, with respect to any Person, all
trade secrets and other confidential, nonpublic and/or proprietary
information of that Person, including information derived from designs,
reports, investigations, research, testing, development,
work-in-progress, codes, marketing and sales programs, capital
expenditure projects, cost summaries, pricing formulae, contract
analyses, financial information, projections, confidential filings with
any Governmental Authority and any other confidential, nonpublic
concepts, methods of doing business, ideas, materials or information
prepared or performed for, by or on behalf of that Person.
"CURRENT BALANCE SHEET" has the meaning specified in Section
1.01.
"CURRENT BALANCE SHEET DATE" has the meaning specified in Section 1.01
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"CURRENT DATE" means any day during the 20-day period ending on
the date of the Closing.
"CURRENT MARKET PRICE" means, as to the OEI Common Stock on any
date, the average of the daily closing prices for the ten (10)
consecutive trading days before such date excluding any trades which are
not bona fide arm's length transactions. The closing price for each day
shall be (i) if the OEI Common Stock is listed or admitted for trading
on any national securities exchange, the last sale price of the OEI
Common Stock, regular way, or the mean of the closing bid and asked
prices thereof if no such sale occurred, in each case as officially
reported on the principal securities exchange on which the OEI Common
Stock is listed, (ii) if the OEI Common Stock is not then traded on any
such national securities exchange but is traded on the National Market
System, the mean between the closing high bid and low asked quotations
of the OEI Common Stock in the National Market System, as reported by
any member firm of the New York Stock Exchange selected by OEI, or (iii)
if not quoted as described in clauses (i) and (ii), the mean between the
high bid and low asked quotations for the OEI Common Stock as reported
by the National Quotation Bureau Incorporated or any similar successor
organization, as reported by any member firm of the New York Stock
Exchange selected by OEI. If the OEI Common Stock is quoted on a
national securities or central market system in lieu of a market or
quotation system described above, the closing price shall be determined
in the manner set forth in clause (i) of the preceding sentence if
actual transactions are reported and in the manner set forth in clause
(ii) of the preceding sentence, if bid and asked quotations are reported
but actual transactions are not.
"DAMAGE" to any specified Person means any cost, damage
(including any consequential, exemplary, punitive or treble damage) or
expense (including reasonable and necessary or appropriate fees and
actual expenses of and disbursements by attorneys, consultants, experts
or other Representatives and Litigation costs) to, any fine of or
penalty on, or any liability (including loss of earnings or profits) of,
any other nature of that Person.
"DAMAGE CLAIM" means, as asserted (a) against any specified
Person, any claim, demand or Litigation made or pending against that
Person for Damages to any other Person, or (b) by the specified Person,
any claim or demand of the specified Person against any other Person for
Damages to the specified Person.
"DGCL" means the General Corporation Law of the State of
Delaware.
"DERIVATIVE SECURITIES" of a specified Entity means any Capital
Stock or debt security or other Indebtedness of the specified Entity or
any other Person which is convertible into or exchangeable for, or any
option, warrant or other right to acquire, (a) any unissued Capital
Stock of the specified Entity or (b) any Capital Stock of the specified
Entity which has been issued and is being held by the Entity directly or
indirectly as treasury Capital Stock.
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"EFFECTIVE TIME" has the meaning specified in Section 2.02.
"ELECTION PERIOD" has the meaning specified in Section 9.05(b).
"EMPLOYEE POLICIES AND PROCEDURES" means at any time all employee
manuals and all material policies, procedures and work-related rules
that apply at that time to any employee, nonemployee director or officer
of, or any other natural person performing consulting or other
independent contractor services for, the Company or any Company
Subsidiary.
"EMPLOYMENT AGREEMENT" means at any time (a) any agreement to
which the Company or any Company Subsidiary is a party which then
relates to the direct or indirect employment or engagement, or arises
from the past employment or engagement, of any natural person by the
Company or any Company Subsidiary, whether as an employee, a nonemployee
officer or director, a consultant or other independent contractor, a
sales representative or a distributor of any kind, including any
employee leasing or service agreement and any noncompetition agreement,
and (b) any agreement between the Company or any Company Subsidiary and
any Person which arises from the sale of a business by that Person to
the Company or any Company Subsidiary and limits that Person's
competition with the Company or any Company Subsidiary.
"ENGINEERING CONTRACT" means any written or oral contract,
subcontract or other agreement under which the Company or a Company
Subsidiary is or may become obligated to (a) provide to or for any
Person design, engineering, construction, construction management,
technical, project management, quality control or quality assurance,
consulting, procurement, inspection, or supervisory services which
require or involve the Practice of Engineering by the Company or a
Company Subsidiary or (b) construct, erect, assemble, manufacture,
fabricate, modify, convert or demolish for, or for sale to, any Person
all or any part of any building, plant, structure or other physical
facility, any roads, highways, bridges, tunnels or railways, or any
machinery, equipment or apparatus.
"ENTITY" means any sole proprietorship, corporation, partnership
of any kind having a separate legal status, limited liability company,
business trust, unincorporated organization or association, mutual
company, joint stock company or joint venture.
"ENVIRONMENTAL LAWS" means any and all Governmental Requirements
relating to the environment or worker health or safety, including
ambient air, surface water, land surface or subsurface strata, or to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals or industrial, toxic or hazardous substances or
wastes (including Solid Wastes, Hazardous Wastes or Hazardous
Substances) or noxious noise or odor into the environment or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, recycling, removal, transport or handling of
pollutants, contaminants, chemicals or industrial, toxic or hazardous
substances or wastes (including
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petroleum, petroleum distillates, asbestos or asbestos-containing
material, polychlorinated biphenyls, chlorofluorocarbons or
hydrochlorofluorocarbons).
"ERISA" means the Employee Retirement Income Security Act of
1974.
"ERISA AFFILIATE" means, with respect to any specified Person at
any time, any other Person, including an Affiliate of the specified
Person, that is, or at any time within six years of that time was, a
member of any ERISA Group of which the specified Person is or was a
member at the same time.
"ERISA AFFILIATE PENSION PLAN" has the meaning specified in
Section 4.26(d).
"ERISA EMPLOYEE BENEFIT PLAN" means any "employee benefit plan"
as defined in Section 3(3) of ERISA and includes any ERISA Pension
Benefit Plan.
"ERISA PENSION BENEFIT PLAN" means any "employee pension benefit
plan," as defined in Section 3(2) of ERISA, including any plan that is
covered by Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Code (excluding any Multiemployer Plan).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"FINAL PROSPECTUS" means the prospectus included in the
Registration Statement at the time it becomes effective, except that if
the prospectus first furnished to the Underwriter after the Registration
Statement becomes effective for use in connection with the IPO differs
from the prospectus included in the Registration Statement at the time
it becomes effective (whether or not the prospectus so furnished to the
Underwriter is required to be filed with the SEC pursuant to Securities
Act Rule 424(b)), the prospectus so furnished will be the "FINAL
PROSPECTUS."
"FINANCIAL STATEMENTS" means the Initial Financial Statements and
the other financial statements of the Company and the Company
Subsidiaries, if any, delivered to OEI prior to the Effective Time
pursuant to Section 6.09.
"GAAP" means generally accepted accounting principles and
practices in the United States as in effect from time to time which (i)
have been concurred with by Xxxxxx Xxxxxxxx LLP and (ii) have been or
are applied on a basis consistent (except for changes concurred with by
Xxxxxx Xxxxxxxx LLP) with the most recent audited Financial Statements
delivered to OEI prior to the Effective Time.
"GENERAL RELEASE" means the general release of the Company and
the Company Subsidiaries to be executed at or before, and delivered to
OEI and the Company at, the
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Closing, effective as of the Effective Time, by each Stockholder, which
general release shall be in the form of the attached Exhibit 1.02-B,
with its blanks appropriately completed.
"GOVERNMENTAL APPROVAL" means at any time any authorization,
consent, approval, permit, franchise, certificate, license, implementing
order or exemption of, or registration or filing with, any Governmental
Authority.
"GOVERNMENTAL AUTHORITY" means any national, state, county,
municipal or other government, domestic or foreign, or any agency,
board, bureau, commission, court, department or other instrumentality of
any such government.
"GOVERNMENTAL REQUIREMENT" means at any time (a) any law,
statute, code, ordinance, order, rule, regulation, judgment, decree,
injunction, order, writ, edict, award, authorization or other
requirement of any Governmental Authority in effect at that time or (b)
any obligation included in any certificate, certification, franchise,
permit or license issued by any Governmental Authority or resulting from
binding arbitration, including any requirement under common law, at that
time.
"GUARANTY" means, for any specified Person, without duplication,
any liability, contingent or otherwise, of that Person guaranteeing or
otherwise representing liability for any obligation of any other Person
(the "PRIMARY OBLIGOR") in any manner, whether directly or indirectly,
and including any liability of the specified Person, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or
payment of) the other Person's obligation or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of
that obligation, (b) to purchase property, securities or services for
the purpose of assuring the owner of that obligation of its payment, or
(c) to maintain working capital, equity capital or other financial
statement condition or liquidity of the primary obligor so as to enable
the primary obligor to pay that obligation; PROVIDED, HOWEVER, that the
term "GUARANTY" excludes endorsements for collection or deposit in the
ordinary course of the endorser's business.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976.
"IMMEDIATE FAMILY MEMBER" of a Stockholder means at any time: (a)
if the Stockholder is a natural person, any child or grandchild (by
blood or legal adoption) or spouse of the Stockholder at that time, or
any child of the Stockholder's spouse; and (b) if the Stockholder is an
Entity which has as an ultimate beneficial owner one or more natural
persons, or a natural person and his spouse, any child or grandchild (by
blood or legal adoption) or spouse at that time (if not then an ultimate
beneficial owner of the Entity), or any child of the spouse, of the
ultimate beneficial owner or owners of the Entity.
"INDEBTEDNESS" of any Person means, without duplication, (a) any
liability of that Person (i) for borrowed money or arising out of any
extension of credit to or for the account
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of that Person (including reimbursement or payment obligations with
respect to surety bonds, letters of credit, banker's acceptances and
similar instruments), for the deferred purchase price of property or
services or arising under conditional sale or other title retention
agreements, other than trade payables arising in the ordinary course of
business, (ii) evidenced by notes, bonds, debentures or similar
instruments, (iii) in respect of Capital Leases, or (iv) in respect of
Interest Rate Protection Agreements, (b) any liability secured by any
Lien upon any property or assets of that Person (or upon any revenues,
income or profits of that Person therefrom), whether or not that Person
has assumed the liability or otherwise become liable for its payment, or
(c) any liability of others of the type described in the preceding
clause (a) or (b) in respect of which that Person has incurred, assumed
or acquired a liability by means of a Guaranty.
"INDEMNITY NOTICE" has the meaning specified in Section 9.05(e).
"INDEMNIFIED PARTY" has the meaning specified in Section 9.05(b).
"INDEMNIFYING PARTY" has the meaning specified in Section
9.05(b).
"INFORMATION" means written information, including (a) data,
certificates, reports and statements (excluding Financial Statements)
and (b) summaries of unwritten agreements, arrangements, contracts,
plans, policies, programs or practices or of unwritten amendments or
modifications of, supplements to or waivers under any of the foregoing
documents.
"INTEREST RATE PROTECTION AGREEMENT" means, for any Person, an
interest rate swap, cap or collar agreement or similar arrangement
providing for the transfer or mitigation of interest rate risks of that
Person, either generally or under specific contingencies, between that
Person and any other Person.
"IPO" means the first time after January 1, 1998 a registration
statement filed under the Securities Act and respecting a primary
offering by OEI of shares of OEI Common Stock is declared effective
under the Securities Act and the shares registered by that registration
statement are issued and sold by OEI.
"IPO CLOSING DATE" means the date on which OEI first receives
payment for the shares of OEI Common Stock it sells to the Underwriter
in the IPO.
"IPO PRICE" means the price per share of OEI Common Stock which
is set forth as the "price to public" on the cover page of the Final
Prospectus.
"IPO PRICING DATE" means the date, if any, on which OEI and the
Underwriter agree in the Underwriting Agreement to the price per share
of Common Stock at which the Underwriter, subject to the terms and
conditions of the Underwriting Agreement, will purchase newly issued
shares of OEI Common Stock from OEI on the IPO Closing Date.
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"IRS" means the Internal Revenue Service.
"LIEN" means, with respect to any property or asset of any Person
(or any revenues, income or profits of that Person therefrom), in each
case whether the same is consensual or nonconsensual or arises by
contract, operation of law, legal process or otherwise, (a) any
mortgage, lien, security interest, pledge, attachment, levy or other
charge or encumbrance of any kind thereupon or in respect thereof or (b)
any other arrangement under which the same is transferred, sequestered
or otherwise identified with the intention of subjecting the same to, or
making the same available for, the payment or performance of any
liability in priority to the payment of the ordinary, unsecured
creditors of that Person, including any "ADVERSE CLAIM" (as defined in
Section 8-102(a) of each applicable Uniform Commercial Code) in the case
of any Capital Stock. For purposes of this Agreement, a Person shall be
deemed to own subject to a Lien any asset that Person has acquired or
holds subject to the interest of a vendor or lessor under any
conditional sale agreement, Capital Lease or other title retention
agreement relating to that asset.
"LITIGATION" means any action, case, proceeding, claim,
grievance, suit or investigation or other proceeding conducted by or
pending before any Governmental Authority or any arbitration proceeding.
"MATERIAL" means, as applied to any specified Entity, material to
the business, operations, property or assets, liabilities, financial
condition or results of operations of the specified Entity and its
Subsidiaries considered as a whole.
"MATERIAL ADVERSE EFFECT" means, with respect to the consequences
of any fact or circumstance (including the occurrence or non-occurrence
of any event) to the Company and the Company Subsidiaries considered as
a whole (or after the Effective Time the Surviving Corporation and the
Company Subsidiaries considered as a whole), that such fact or
circumstance has caused, is causing or can reasonably be expected to
cause, singly or in the aggregate with other facts and circumstances,
any Damages in excess of the Threshold Amount.
"MATERIAL AGREEMENT" of an Entity means any contract or agreement
(a) to which the Entity or any of its Subsidiaries is a party, or by
which the Entity or any of its Subsidiaries is bound or to which any
property or assets of the Entity or any of its Subsidiaries is subject
and (b) which is Material to the Entity.
"MATERIAL ENGINEERING CONTRACT" has the meaning specified in
Section 4.22(a).
"MINIMUM CASH AMOUNT" has the meaning specified in Section
7.02(a)(iii).
"MOODY'S" means Xxxxx'x Investors Service, Inc.
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"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA, Section 414 of the Code or Section 3(37) of
ERISA.
"NATIONAL MARKET SYSTEM" means the National Market System of the
Nasdaq Stock Market, Inc.
"NEWCO COMMON STOCK" means the common stock, par value $1 per
share, of Newco.
"OEI COMMON STOCK" means the common stock, par value $.001 per
share, of OEI.
"OEI INDEMNIFIED PARTY" means OEI and its Affiliates (including,
from and after the Effective Time, the Company and all Company
Subsidiaries) and each of their respective officers, directors,
employees, agents and counsel; PROVIDED, HOWEVER, that no Person who
indemnifies any OEI Indemnified Parties under this Agreement in his
capacity as a Stockholder will be an OEI Indemnified Party for purposes
of this Agreement, notwithstanding that the Person is an OEI Indemnified
Party for purposes of one or more of the Other Agreements.
"OEI INDEMNIFIED LOSS" has the meaning specified in Section
9.03(a).
"ORGANIZATION STATE" means, as applied to (a) any corporation,
its state or other jurisdiction of incorporation, (b) any limited
liability company or limited partnership, the state or other
jurisdiction under whose laws it is organized and existing in that legal
form, and (c) any other Entity, the state or other jurisdiction whose
laws govern that Entity's internal affairs.
"OTHER AGREEMENTS" has the meaning specified in the Preliminary
Statements in this Agreement.
"OTHER COMPENSATION PLAN" means any compensation arrangement,
plan, policy, practice or program established, maintained or sponsored
by the Company or any Company Subsidiary, or to which the Company or any
Company Subsidiary contributes, on behalf of any of its employees,
nonemployee directors or officers or other natural persons performing
consulting or other independent contractor services for the Company or
any Company Subsidiary, including all such arrangements, plans,
policies, practices or programs providing for severance pay, deferred
compensation, incentive, bonus or performance awards or the actual or
phantom ownership of any Capital Stock or Derivative Securities of the
Company or any Company Subsidiary, but excluding all Company ERISA
Pension Plans and Employment Agreements.
"OTHER FINANCING SOURCES" has the meaning specified in Section
7.02(a)(iii).
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"OTHER TRANSACTION DOCUMENTS" means the Other Agreements and the
other written agreements, documents, instruments and certificates at any
time executed pursuant to or in connection with the Other Agreements
(other than the Transaction Documents and the Underwriting Agreement),
all as amended, modified or supplemented from time to time.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PERMITTED INVESTMENTS" means at the time of their purchase or
other acquisition by the Company or any Company Subsidiary (a)
obligations issued or guaranteed by the United States of America with a
remaining maturity not exceeding one year, (b) commercial paper with
maturities of not more than 270 days and a published rating of not less
than A-1 by S&P or P-1 by Moody's, and (c) certificates of deposit and
bankers' acceptances having maturities of not more than one year of any
commercial bank or trust company if (A) the issuing bank or trust
company has a combined capital and surplus of at least $5 million and
(B) its unsecured long-term debt obligations, or those of a holding
company of which it is a Subsidiary, are rated not less than A- by S&P
or A3 by Moody's.
"PERMITTED LIENS" means, as applied to the property or assets of
any Person (or any revenues, income or profits of that Person
therefrom): (a) Liens for Taxes if the same are not at the time due and
delinquent; (b) Liens of carriers, warehousemen, mechanics, laborers,
materialmen and landlords for sums not yet due; (c) Liens incurred in
the ordinary course of that Person's business in connection with
worker's compensation, unemployment insurance and other social security
legislation (other than pursuant to ERISA or Section 412(n) of the
Code); (d) Liens incurred in the ordinary course of that Person's
business in connection with deposit accounts or to secure the
performance of bids, tenders, Engineering Contracts, trade contracts,
statutory obligations, surety and appeal bonds, performance and
return-of-money bonds and other obligations of like nature; (e)
easements, rights-of-way, reservations, restrictions and other similar
encumbrances incurred in the ordinary course of that Person's business
or existing on property and not materially interfering with the ordinary
conduct of that Person's business or the use of that property; (f)
defects or irregularities in that Person's title to its real properties
which do not materially diminish the value of the surface estate or
interfere with the ordinary conduct of that Person's business or the use
of any of such properties; (g) any interest or title of a lessor of
assets being leased by any Person pursuant to any Capital Lease
disclosed in Section 4.19 of the Disclosure Statement or any lease that,
under GAAP, would be accounted for as an operating lease; and (h) Liens
securing purchase money Indebtedness disclosed in Section 4.18 or 4.19
of the Disclosure Statement so long as the Liens do not attach to any
property or assets other than the properties or assets purchased with
the proceeds of such Indebtedness.
"PERSON" means any natural person, Entity, estate, trust, union
or employee organization or Governmental Authority or, for the purpose
of the definition of "ERISA Affiliate," any trade or business.
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"PLAN" has the meaning specified in Section 4.27(a).
"PRACTICE OF ENGINEERING" means any service or creative work the
performance of which requires engineering education, training and
experience in the application of special knowledge of the mathematical,
physical or engineering sciences to such services or creative work, and
includes the application of such service or creative work in (a) the
design, engineering, assembly, programming, integration or installation
of control and instrumentation systems and (b) the design, engineering,
fabrication or installation of modular refining and processing plants.
"PRIVATE PLACEMENT MEMORANDUM" means the OEI Private Placement
Memorandum dated as of April ___, 1998, relating to the offer of OEI
Common Stock in connection with the Merger.
"PROFESSIONAL CODES" means any and all Governmental Requirements
relating to the Practice of Engineering or the licensing, qualification
or registration of natural persons as engineers of any classification.
"PROHIBITED TRANSACTION" means any transaction that is prohibited
under Section 4975 of the Code or Section 406 of ERISA and not exempt
under Section 4975 of the Code or Section 408 of ERISA.
"PROPERTY, PLANT AND EQUIPMENT" means at any time any property
that then would be included and classified as property, plant and
equipment on a consolidated balance sheet, prepared in accordance with
GAAP, of the Company and the Company Subsidiaries.
"PROPRIETARY RIGHTS" means (a) patents, applications for patents
and patent rights, (b) in each case, whether registered, unregistered or
under pending registration, trademark rights, trade names, trade name
rights, corporate names, business names, trade styles or dress, service
marks and logos and other trade designations and copyrights and (c), in
the case of the Company or any Company Subsidiary, all agreements
relating to the technology, know-how or processes used or marketed in
any business of the Company or any Company Subsidiary.
"QUALIFIED PLANS" has the meaning specified in Section 4.27(b).
"RCRA" means the Resource Conservation and Recovery Act of 1976.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement to be executed and delivered at the Closing by OEI and the
Stockholders electing to be parties thereto, which shall be in the form
of Exhibit 1.02-A, with it blanks appropriately completed.
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"REGISTRATION STATEMENT" means the registration statement
(including (a) each preliminary prospectus included therein prior to the
date on which that registration statement is declared effective under
the Securities Act (including any prospectus filed with the SEC pursuant
to Securities Act Rule 424(b)), (b) the Final Prospectus and (c) any
amendments thereof and all supplements and exhibits thereto) filed by
OEI with the SEC to register shares of OEI Common Stock under the
Securities Act for public offering and sale in the IPO.
"RELATED PARTY AGREEMENT" means any contract or other agreement,
written or oral, to which the Company or any Company Subsidiary is a
party or is bound or by which any property of the Company or any Company
Subsidiary is bound or may be subject and (a) to which any Stockholder
or any of that Stockholder's Related Persons or Affiliates also is a
party, (b) of which any Stockholder or any Stockholder's Related Persons
or Affiliates is a beneficiary, or (c) as to which any transaction
contemplated thereby properly would be characterized (without regard to
the amount involved) as a related party transaction for purposes of
applying the disclosure requirements of GAAP or the SEC applicable to
the Registration Statement.
"RELATED PERSON" of a Stockholder means: (a) if the Stockholder
is a natural person, (i) any Immediate Family Member of the Stockholder,
(ii) any Estate of the Stockholder or any Immediate Family Member of the
Stockholder, (iii) the trustee of any inter vivos or testamentary trust
of which all the beneficiaries are Immediate Family Members of the
Stockholder, and (iv) any Entity the entire equity interest in which is
owned by any one or more of the Stockholder and Immediate Family Members
of the Stockholder; and (b) if the Stockholder is an Entity, Estate or
trust, (i) any Person who owns an equity interest in the Stockholder on
the date hereof, (ii) any Person who would be a Related Person under
clause (a) of this definition of a natural person who is an ultimate
beneficial owner of the Stockholder, or (iii) any other Entity the
entire equity interest in which is owned by any one or more of the
Stockholder and Immediate Family Members of the Stockholder. As used in
this definition, "Estate" means, as to any natural person who has died
or been adjudicated mentally incompetent by a court of competent
jurisdiction, (i) that person's estate or (ii) the administrator,
conservator, executor, guardian or representative of that person's
estate.
"REPRESENTATIVES" means, with respect to any Person, the
directors, officers, employees, Affiliates, accountants (including
independent certified public accountants), advisors, attorneys,
consultants or other agents of that Person, or any other representatives
of that Person or of any of that Person's directors, officers,
employees, Affiliates, accountants (including independent certified
public accountants), underwriters, advisors, attorneys, consultants or
other agents.
"REPORTABLE EVENT" means, with respect to any Company ERISA
Pension Plan, (a) the occurrence of any of the events set forth in
Section 4043(b) or 4043(c) (other than a Reportable Event as to which
the provision of 30 days' notice to the PBGC is waived under applicable
regulations), 4062(e) or 4063(a) of ERISA with respect to that plan, (b)
any event
12
requiring the Company or any ERISA Affiliate to provide security to that
plan under Section 401(a)(29) of the Code, or (c) any failure to make a
payment required by Section 412(m) of the Code with respect to that
plan.
"RESTRICTED PAYMENT" means, with respect to any Entity at any
time, any of the following effected by the Entity: (a) any declaration
or payment of any dividend or other distribution, direct or indirect, on
account of any Capital Stock of that Entity or any Affiliate of the
Entity or (b) any direct or indirect redemption, retirement, purchase or
other acquisition for value of, or any direct or indirect purchase,
payment or sinking fund or similar deposit for the redemption,
retirement, purchase or other acquisition for value of, or to obtain the
surrender of, any then outstanding Capital Stock of the Entity or any
Affiliate of the Entity or any then outstanding warrants, options or
other rights to acquire or subscribe for or purchase unissued or
treasury Capital Stock of the Entity or any of its Affiliates.
"RESTRICTED PERIOD" has the meaning specified in Section 11.02.
"RETURNS" means the returns, reports or statements (including any
information returns) any Governmental Requirement requires to be filed
for purposes of any Tax.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SOLID WASTES, HAZARDOUS WASTES OR HAZARDOUS SUBSTANCES" have the
meanings ascribed to those terms in CERCLA, RCRA or any other
Environmental Law applicable to the business or operations of the
Company or any Company Subsidiary which imparts a broader meaning to any
of those terms than does CERCLA or RCRA.
"S&P" means Standard and Poor's Rating Group.
"STOCKHOLDER INDEMNIFIED PARTY" means (a) each Stockholder and
each of that Stockholder's Affiliates (other than the Company or,
following the Effective Time, the Surviving Corporation or OEI or any of
its Subsidiaries, if the Stockholder is an Affiliate of OEI), agents and
counsel and (b) prior to the Effective Time, the Company and each of its
officers, directors, employees, agents and counsel who are not
Stockholder Indemnified Parties within the meaning of clause (a) of this
definition.
"STOCKHOLDER INDEMNIFIED LOSS" has the meaning specified in
Section 9.04.
"SUBSIDIARY" of any specified Person means at any time, any
Entity a majority of the Capital Stock of which is at that time owned or
controlled, directly or indirectly, by the specified Person.
13
"SUPPLEMENTAL INFORMATION" has the meaning specified in Section
6.07.
"TAX" or "TAXES" means all net or gross income, gross receipts,
net proceeds, sales, use, ad valorem, value added, franchise,
withholding, payroll, employment, excise, property, deed, stamp,
alternative or add-on minimum, environmental or other taxes,
assessments, duties, fees, levies or other governmental charges or
assessments of any nature imposed by any Governmental Requirement,
whether disputed or not, together with any interest, penalties,
additions to tax or additional amounts with respect thereto.
"TAXING AUTHORITY" means any Governmental Authority having or
exercising jurisdiction with respect to any Tax.
"TERMINATION EVENT" means, with respect to any Company ERISA
Pension Plan, (a) any Reportable Event with respect to that plan which
will or is likely to result in the termination of that plan, (b) the
termination of, or the filing of a notice of intent to terminate, that
plan or the treatment of any amendment to that plan as a termination
under Section 4041(c) of ERISA, or (c) the institution of proceedings to
terminate, or the appointment of a trustee to administer, that plan
under Section 4042 of ERISA.
"THIRD PARTY CLAIM" has the meaning specified in Section 9.05(b).
"TRANSACTION DOCUMENTS" means this Agreement, the Certificates of
Merger, the General Release, the Registration Rights Agreement, the
Transferors' Agreement and the other written agreements, documents,
instruments and certificates executed pursuant to or in connection with
this Agreement (other than the Other Transaction Documents and the
Underwriting Agreement), including those specified in Article VII to be
delivered at or before the Closing, all as amended, modified or
supplemented from time to time.
"UNDERWRITER" means, collectively, (a) the investment banking
firms that prospectively may enter into the Underwriting Agreement and
(b) from and after the IPO Pricing Date, the investment banking firms
parties to the Underwriting Agreement.
"UNDERWRITING AGREEMENT" has the meaning specified in Section
7.02(a)(iii).
"WELFARE PLAN" means an "employee welfare benefit plan" as
defined in Section 3(1) of ERISA.
"WHOLLY OWNED SUBSIDIARY" means any corporation or other Entity
all of the outstanding Capital Stock of which, on a fully diluted basis,
is owned and controlled, directly or indirectly through another Wholly
Owned Subsidiary, by the Company.
14
Section 1.03. OTHER DEFINITIONAL PROVISIONS.
(a) Except as otherwise specified herein, all references herein
to any Governmental Requirement defined or referred to herein, including
the Code, CERCLA, ERISA, the Exchange Act, RCRA and the Securities Act,
shall be deemed references to that Governmental Requirement or any
successor Governmental Requirement, as the same may have been amended or
supplemented from time to time, and any rules or regulations promulgated
thereunder.
(b) When used in this Agreement, the words "herein," "hereof" and
"hereunder" and words of similar import shall refer to this Agreement as
a whole and not to any specific provision of this Agreement, and the
words "Article," "Section," "Annex," "Schedule" and "Exhibit" refer to
Articles and Sections of, and Annexes, Schedules and Exhibits to, this
Agreement, unless otherwise specified.
(c) Whenever the context so requires, the singular number
includes the plural and VICE VERSA, and a reference to one gender
includes the other gender and the neuter.
(d) The word "including" (and, with correlative meaning, the word
"include") means including, without limiting the generality of any
description preceding such word, and the words "shall" and "will" are
used interchangeably and have the same meaning.
Section 1.04 CAPTIONS. Captions to Articles, Sections and subsections of
this Agreement and its Annexes, Schedules and Exhibits are included for
convenience of reference only, and shall not constitute a part of this Agreement
or any other Transaction Document for any other purpose, nor shall they in any
way affect the meaning or construction of any provision of this Agreement or any
other Transaction Document.
15
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF EACH STOCKHOLDER
Section 3.02. OWNERSHIP AND STATUS OF COMPANY CAPITAL STOCK. The
Stockholder is the record and beneficial owner (or, if the Stockholder is a
trust or the estate of a deceased natural person, the legal owner) of the number
of shares of Company Capital Stock set forth, by class, and by each series in
each class, opposite the Stockholder's name in Schedule 3.02, free and clear of
all Liens, except for the Liens accurately set forth in Schedule 3.02, all of
which will be released at or before the Effective Time.
Section 3.03. POWER OF THE STOCKHOLDER; APPROVAL OF THE MERGER.
(a) The Stockholder has the full power, legal capacity and
authority to execute and deliver this Agreement and each other
Transaction Document to which the Stockholder is a party and to perform
the Stockholder's obligations in this Agreement and in all other
Transaction Documents to which the Stockholder is a party. This
Agreement constitutes, and each such other Transaction Document, when
executed in the Stockholder's individual capacity and delivered by the
Stockholder, will constitute, the legal, valid and binding obligation of
the Stockholder, enforceable against the Stockholder in accordance with
its terms, except as their enforceability may be (i) limited by any
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors' rights generally and (ii)
subject to general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law). If
the Stockholder is an Entity, the Stockholder has, in accordance with
all applicable Governmental Requirements and its Charter Documents,
obtained all approvals and taken all actions necessary for the
authorization, execution, delivery and performance by the Stockholder of
this Agreement and the other Transaction Documents to which the
Stockholder is a party. If the Stockholder is acting otherwise than in
his individual capacity (whether as an executor or a guardian or in any
other fiduciary or representative capacity), all actions on the part of
the Stockholder and all other Persons (including any court) necessary
for the authorization, execution, delivery and performance by the
Stockholder of this Agreement and the other Transaction Documents to
which the Stockholder is a party have been duly taken.
(b) The Stockholder, acting in each capacity in which he is
entitled, by reason of the Company's Charter Documents or the
Governmental Requirements of the Company's Organization State or for any
other reason, to vote to approve or disapprove the consummation of the
Merger, has voted, or has granted an irrevocable proxy to
representatives of OEI to vote, all the shares of Company Capital Stock
owned by him and entitled to a vote or votes on that matter, in any one
or more of the manners prescribed or permitted by the Company's Charter
Documents or the Governmental Requirements of the Company's Organization
State, whichever are controlling, to approve this Agreement and the
consummation of the Merger and the other transactions contemplated by
this Agreement.
16
Section 3.04. NO CONFLICTS OR LITIGATION. The execution, delivery and
performance in accordance with their respective terms by the Stockholder of this
Agreement and the other Transaction Documents to which the Stockholder is or
will be a party do not and will not (a) violate any Governmental Requirement,
(b) breach or constitute a default under any agreement or instrument (other than
Guarantees, if any, listed on Schedule 8.05) to which the Stockholder is a party
or by which the Stockholder or any of the shares of Company Capital Stock owned
by the Stockholder is bound, (c) result in the creation or imposition of, or
afford any Person the right to obtain, any Lien upon any of the shares of
Company Capital Stock owned by the Stockholder (or upon any revenues, income or
profits of the Stockholder therefrom) or (d) if the Stockholder is an Entity,
violate the Stockholder's Charter Documents. No Litigation is pending or, to the
knowledge of the Stockholder, threatened to which the Stockholder is a party
which (a) questions or involves the validity or enforceability of any of the
Stockholder's obligations under any Transaction Document or (b) seeks (i) to
prevent or delay the consummation by the Stockholder of the transactions
contemplated by this Agreement to be consummated by the Stockholder or (ii)
Damages in connection with any consummation by the Stockholder of the
transactions contemplated by this Agreement.
Section 3.05. NO BROKERS. The Stockholder has not, directly or
indirectly, in connection with this Agreement or the transactions contemplated
hereby (a) employed any broker, finder or agent or (b) agreed to pay or incurred
any obligation to pay any broker's or finder's fee, any sales commission or any
similar form of compensation.
Section 3.06. PREEMPTIVE AND OTHER RIGHTS; WAIVER. Except for the right
of the Stockholder to receive shares of OEI Common Stock as a result of the
Merger or to acquire OEI Common Stock pursuant to any written option or warrant
granted by OEI to the Stockholder, the Stockholder either (a) does not have any
statutory or contractual preemptive or other right of any kind (including any
right of first offer or refusal) to acquire any shares of Company Capital Stock
or OEI Common Stock or (b) hereby irrevocably waives each such right of that
type the Stockholder has or may have.
Section 3.07. CONTROL OF RELATED BUSINESSES. Except as accurately set
forth in Schedule 3.07, the Stockholder is not, and none of his Immediate Family
Members are, in any case alone or with one or more other Persons, the
controlling Affiliate of any Entity, business or trade (other than the Company
and the Company Subsidiaries, if the Stockholder is an Affiliate of the Company)
that (a) is engaged in any line of business which is the same as or similar to
any line of business in which the Company or any Company Subsidiary is engaged,
(b) is a significant supplier to, or customer or sales agent of, the Company or
any Company Subsidiary, or (c) is, or has within the three-year period ending on
the date of this Agreement, engaged in any transaction or been a party to any
agreement with the Company or any Company Subsidiary, other than an Employment
Agreement which either (i) is listed in Section 4.26(b) of the Disclosure
Statement or (ii) has expired by its terms or has been terminated without any
further liability or obligation thereunder on the part of the Company or any
Company Subsidiary.
17
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF
THE COMPANY AND THE STOCKHOLDERS
Section 4.02. QUALIFICATION. Section 4.02 of the Disclosure Statement
accurately lists all the jurisdictions in which the Company and the Company
Subsidiaries are authorized or qualified to own or lease and to operate their
properties or to carry on their business as now conducted. The Company and each
Company Subsidiary is duly qualified to do business and in good standing as a
foreign corporation in each state (other than its Organization State) or other
jurisdiction in which it owns or leases property or in which the carrying on of
its business as now conducted so requires, except where the failure to be so
qualified would not have a Material Adverse Effect.
Section 4.03. AUTHORIZATION; ENFORCEABILITY; ABSENCE OF CONFLICTS;
REQUIRED CONSENTS.
(a) The execution, delivery and performance by the Company of
this Agreement and each other Transaction Document to which it is or
will be a party, and the effectuation of the Merger and the other
transactions contemplated hereby and thereby, are within its corporate
or other power under its Charter Documents and all applicable
Governmental Requirements of its Organization State and have been duly
authorized by all proceedings, including actions permitted to be taken
in lieu of proceedings, required under its Charter Documents and all
applicable material Governmental Requirements of its Organization State.
(b) This Agreement has been, and each of the other Transaction
Documents to which the Company is or will be a party, when executed and
delivered to OEI (or, in the case of the Certificate of Merger, the
applicable Governmental Authorities) will have been, duly executed and
delivered by the Company and is, or when so executed and delivered will
be, the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as
enforceability may be (i) limited by any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and (ii) subject to general
principles of equity (regardless of whether enforceability is considered
in a proceeding in equity or at law).
(c) The execution, delivery and performance in accordance with
their respective terms by the Company of the Transaction Documents to
which it is a party do not and will not (i) violate, breach or
constitute a default under (A) the Charter Documents of any of the
Company and the Company Subsidiaries, (B) other than as set forth in
Section 4.03 of the Disclosure Statement, any Governmental Requirement
applicable to any of the Company and the Company Subsidiaries or (C)
except as set forth in Section 4.03 of the Disclosure Statement, any
Material Agreement of the Company, (ii) except as set forth in Section
4.03 of the Disclosure Statement, result in the acceleration or
mandatory prepayment of any Indebtedness, or any Guaranty not
constituting Indebtedness, of any of the Company and the
18
Company Subsidiaries or afford any holder of any of that Indebtedness,
or any beneficiary of any of those Guaranties, the right to require any
of the Company and the Company Subsidiaries to redeem, purchase or
otherwise acquire, reacquire or repay any of that Indebtedness, or to
perform any of those Guaranties, (iii) cause or result in the imposition
of, or afford any Person the right to obtain, any Lien upon any property
or assets of any of the Company and the Company Subsidiaries (or upon
revenues, income or profits of any of the Company and the Company
Subsidiaries therefrom), (iv) except as set forth in Section 4.03 of the
Disclosure Statement, result in the revocation, cancellation, suspension
or material modification, in any single case or in the aggregate, of any
Governmental Approval possessed by any of the Company and the Company
Subsidiaries at the date hereof and necessary for the ownership or lease
or the operation of its properties or the carrying on of its business as
now conducted, including any necessary Governmental Approval under each
applicable Environmental Law, or (v) except as set forth in Section 4.03
of the Disclosure Statement, entitle any Person other than the Company
or a Company Subsidiary to revoke, cancel, suspend or materially modify
any Company Commitment.
(d) Except for (i) the filing of the Certificates of Merger with
the applicable Governmental Authorities, (ii) filings of the
Registration Statement under the Securities Act and the SEC order
declaring the Registration Statement effective under the Securities Act,
and (iii) as may be required by the HSR Act or the applicable state
securities or blue sky laws, no Governmental Approvals are required to
be obtained, and no reports or notices to or filings with any
Governmental Authority are required to be made, by any of the Company
and the Company Subsidiaries for the execution, delivery or performance
by the Company of the Transaction Documents to which it is a party, the
enforcement against the Company of its obligations thereunder or the
effectuation of the Merger and the other transactions contemplated
thereby.
Section 4.04. CHARTER DOCUMENTS AND RECORDS; NO VIOLATION. The Company
has caused true, complete and correct copies of the Charter Documents, each as
in effect on the date hereof, and the minute books and similar corporate or
other Entity records of each of the Company and the Company Subsidiaries to be
delivered or otherwise made available to OEI. No breach or violation of any
Charter Document of any of the Company and the Company Subsidiaries has occurred
and is continuing.
Section 4.05. NO DEFAULTS. Except to the extent the consummation of the
transactions contemplated hereby will violate, breach or constitute a default
under any agreement or instrument described in Section 4.03 of the Disclosure
Statement, no act or omission by the Company or any of the Company Subsidiaries
has occurred, and to the knowledge of the Company, the Company Subsidiaries and
the Stockholders, no other condition or state of facts exists, or, with the
giving of notice or the lapse of time or both, would exist, which (a) entitles
any holder of any outstanding Indebtedness, or any Guaranty not constituting
Indebtedness, of any of the Company and the Company Subsidiaries, or a
representative of the holder, to accelerate the maturity, or require a mandatory
prepayment of that Indebtedness or Guaranty, or affords the holder or its
representative,
19
or any beneficiary of that Guaranty, the right to require any of the Company and
the Company Subsidiaries to redeem, purchase or otherwise acquire, reacquire or
repay any of that Indebtedness, or to perform that Guaranty in whole or in part,
(b) entitles any Person to obtain any Lien (other than a Permitted Lien) upon
any properties or assets of any of the Company and the Company Subsidiaries (or
upon revenues, income or profits of any of the Company and the Company
Subsidiaries therefrom), or (c) to the knowledge of the Company, the Company
Subsidiaries and the Stockholders, constitutes a violation or breach of, or a
default under, any Material Agreement of the Company by any of the Company and
the Company Subsidiaries.
Section 4.06. COMPANY SUBSIDIARIES. Section 4.06 of the Disclosure
Statement either (a) accurately sets forth the form of organization, legal name,
each assumed name and Organization State of each Company Subsidiary or (b)
correctly states no Entity is a Company Subsidiary. Except as accurately
disclosed in Section 4.06 of the Disclosure Statement, each Company Subsidiary
is a Wholly Owned Subsidiary. In the case of any Company Subsidiary that is not
a Wholly Owned Subsidiary, Section 4.06 of the Disclosure Statement accurately
sets forth, by each class and each series within each class, the number of
outstanding shares of Capital Stock of the Company Subsidiary, (a) the Company's
aggregate direct and indirect ownership of those shares and (b) the name and
address of record and percentage ownership of those shares by each holder of
record thereof other than the Company or a Company Subsidiary. No Lien exists on
any outstanding share of Capital Stock of any Company Subsidiary which is owned
directly or indirectly by the Company other than (a) the Liens, if any,
described in Section 4.06 of the Disclosure Statement, all of which will be
released at or before the Effective Time, and (b) Permitted Liens. Except as
accurately set forth in Section 4.06 of the Disclosure Statement, the Company
does not own, of record or beneficially, directly or indirectly through any
Person, and does not control, directly or indirectly through any Person or
otherwise, any Capital Stock or Derivative Securities of any Entity other than a
Company Subsidiary.
Section 4.07. CAPITAL STOCK OF THE COMPANY AND THE COMPANY SUBSIDIARIES.
All the issued and outstanding shares of Capital Stock of each of the Company
and the Company Subsidiaries have been duly authorized and validly issued in
accordance with the applicable Governmental Requirements of their issuer's
Organization State and Charter Documents and are fully paid and nonassessable.
Neither the Company nor any Company Subsidiary has issued or sold any shares of
its outstanding Capital Stock in breach or violation of (a) any applicable
statutory or contractual preemptive rights, or any other rights of any kind
(including any rights of first offer or refusal), of any Person or (b) the terms
of any of its Derivative Securities which then were outstanding. Except as
accurately set forth in Section 4.07 of the Disclosure Statement, no Person has,
otherwise than solely by reason of that Person's right, if any, to vote shares
of the Capital Stock of the Company or any Company Subsidiary it holds (to the
extent those shares afford their holder any voting rights) any right to vote on
any matter with the holders of Capital Stock of the Company or any Company
Subsidiary.
Section 4.08. TRANSACTIONS IN CAPITAL STOCK. Except as accurately set
forth in Section 4.08 of the Disclosure Statement: (a) the Company has no fixed
or contingent obligation to purchase,
20
redeem or otherwise acquire or reacquire any of its equity securities or any
interests therein or to pay any dividend or make any distribution in respect
thereof, and (b) no transaction has been effected, and no action has been taken,
respecting the equity ownership of either the Company or any Company Subsidiary,
in either case in contemplation of the transactions described in this Agreement.
Section 4.09. NO BONUS SHARES. Except as accurately set forth in Section
4.09 of the Disclosure Statement, no outstanding share of Capital Stock of the
Company was issued for less than its fair market value at the time of its
issuance or was issued in exchange for any consideration other than cash.
Section 4.10. PREDECESSOR STATUS; ETC. Section 4.10 of the Disclosure
Statement accurately lists all the legal and assumed names of all predecessor
companies for the past five years of the Company and each Company Subsidiary,
including the names of any Entities from which the Company previously acquired
material assets. Except as accurately disclosed in Section 4.10 of the
Disclosure Statement, the Company has not been a Subsidiary or division of
another corporation or a part of an acquisition that was later rescinded.
Section 4.11. RELATED PARTY AGREEMENTS. Except as set forth in Schedule
4.11, each Related Party Agreement in effect on the date of this Agreement will
have been terminated as of the IPO Closing Date, and no Related Party Agreement
will exist then or thereafter.
Section 4.12. LITIGATION. Except as accurately disclosed in Section 4.12
of the Disclosure Statement, no Litigation is pending or, to the knowledge of
the Company, any Company Subsidiary or any Stockholder, threatened to which the
Company or any Company Subsidiary is or, to the knowledge of the Company, any
Company Subsidiary or the Stockholders, may become a party.
Section 4.13. FINANCIAL STATEMENTS; DISCLOSURE.
(a) FINANCIAL STATEMENTS. The Financial Statements (including in
each case the related schedules and notes) delivered to OEI by the
Company present fairly, in all material respects, the financial position
of the Company (or the consolidated financial position of the Company
and the consolidated Company Subsidiaries, if any) at the respective
dates of the balance sheets included therein and the results of its
operations (or their consolidated operations, as the case may be) and
its cash flows (or their consolidated cash flows, as the case may be)
for the respective periods set forth therein and have been prepared in
accordance with GAAP. As of the date of each balance sheet included in
all previously delivered Financial Statements, neither the Company nor
any Company Subsidiary then had any outstanding Indebtedness to any
Person or any liabilities of any kind (including contingent obligations,
Tax assessments or forward or long-term commitments), or any unrealized
or anticipated loss, which in the aggregate then were Material to the
Company and required by GAAP to be reflected in those Financial
Statements or in the notes related thereto, which were not so reflected.
21
(b) DISCLOSURE. To the knowledge of the Company and the
Stockholders:
(i) all Information (other than financial budgets and
projections) that (A) is set forth in the Disclosure Statement,
(B) has been delivered to OEI by or on behalf of the Company
pursuant to an express requirement of this Agreement, or (C) has
been furnished to OEI by or on behalf of the Company for
inclusion in the Registration Statement under the captions "THE
COMPANY," "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS," "BUSINESS," "MANAGEMENT,"
and "CERTAIN TRANSACTIONS" in any prospectus forming a part of
the Registration Statement taken together, does not contain any
untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements made therein, in
the light of the circumstances under which the statements were
made, not misleading; and
(ii) all financial budgets and projections that have been
or are hereafter from time to time prepared by the Company or any
of its Representatives and made available prior to the Effective
Time to OEI pursuant to or in connection with this Agreement, any
other Transaction Document or the transactions contemplated
hereby or thereby have been and will be prepared and furnished to
OEI in good faith and were and will be based on facts and
assumptions that are believed by the management of the Company to
be reasonable in light of the then current and reasonably
foreseeable business conditions of the Company and the Company
Subsidiaries and represented and will represent management's good
faith estimate of the consolidated projected financial
performance of the Company and the Company Subsidiaries based on
the information available to the Responsible Officer at the time
so furnished (it being acknowledged by OEI that the budgets and
projections referred to in this clause (ii) are derived from
judgments made by the Company's management and are only estimates
of future results based on reasonable assumptions of the
Company's management made at the time of their preparation, and
that there can be no assurance that the budgets or projections
will be obtained or maintained or that actual results will not be
different from those budgeted or projected).
Section 4.14. COMPLIANCE WITH LAWS.
(a) Except as accurately disclosed in Section 4.14 of the
Disclosure Statement, (i) each of the Company and the Company
Subsidiaries possesses, or, if required by the applicable Professional
Codes, one or more of its employees as required by those Professional
Codes possesses, all necessary licenses, registrations and
qualifications material to the conduct of its business, and (ii) to the
knowledge of the Company, each of the Company and the Company
Subsidiaries are in compliance in all material respects with the terms
and conditions of all Governmental Approvals necessary for the ownership
or lease and the operation of its properties (including all the
facilities and sites it owns or holds under
22
any lease) and the carrying on of its business as now conducted,
including its conduct of the Practice of Engineering. The Company has
identified in Section 4.14 of the Disclosure Statement all the
Governmental Approvals it possesses. To the knowledge of the Company,
all the Governmental Approvals identified in Section 4.14 of the
Disclosure Statement, are valid. Except as accurately disclosed in
Section 4.14 of the Disclosure Statement, neither the Company nor any
Company Subsidiary has received any notice from any Governmental
Authority of its intention to cancel, terminate or not renew any such
Governmental Approvals.
(b) Except as accurately disclosed in Section 4.14 of the
Disclosure Statement, each of the Company and the Company Subsidiaries:
(i) to the knowledge of the Company, has been and continues to be in
compliance in all material respects with all Governmental Requirements
applicable to it or any of its presently or previously owned or operated
properties (including all the facilities and sites now or previously
owned or held by it under any lease), businesses or operations,
including all applicable Governmental Requirements under ERISA,
Environmental Laws and Professional Codes; and (ii)(A) neither the
Company nor any Company Subsidiary has received any notice from any
Governmental Authority which asserts, or raises the possibility of
assertion of, any noncompliance by the Company or any Company Subsidiary
with any Governmental Requirements and (B) to the knowledge of the
Company and the Stockholders, no condition or state of facts exists
which would provide a valid basis for any such assertion.
Section 4.15. CERTAIN ENVIRONMENTAL MATTERS. Except as accurately
disclosed in Section 4.15 of the Disclosure Statement: (a) to the knowledge of
the Company, the Company and each Company Subsidiary have complied, and are in
compliance, with the provisions of all Environmental Laws applicable to any of
them or any of their respective presently owned or operated facilities, sites or
other properties, businesses and operations and which relate to the reporting by
the Company and each Company Subsidiary of all sites presently owned or operated
by any of them where Solid Wastes, Hazardous Wastes or Hazardous Substances have
been treated, stored, disposed of or otherwise handled; (b) no release (as
defined in the applicable Environmental Laws) at, from, in or on any site owned
or leased by the Company or any Company Subsidiary has occurred which, if all
relevant facts were known to the relevant Governmental Authorities, reasonably
could be expected to require remediation to avoid deed record notices,
restrictions, liabilities or other consequences that would not be applicable if
the release had not occurred; (c) neither the Company nor any Company Subsidiary
has transported or arranged for the transportation of any Solid Wastes,
Hazardous Wastes or Hazardous Substances to, or disposed or arranged for the
disposition of any Solid Wastes, Hazardous Wastes or Hazardous Substances at,
any off-site location that reasonably could be expected to lead to any valid
claim against the Company, any Company Subsidiary, OEI or Newco, as a
potentially responsible party or otherwise, for any clean-up costs, remedial
work, damage to natural resources, personal injury or property damage, including
any claim under CERCLA; and (d) no storage tanks exist, or, to the knowledge of
the Company, has existed, on or under any of the properties owned or operated by
the Company or any Company Subsidiary from which any Solid Wastes, Hazardous
Wastes or Hazardous Substances have been released into the surrounding
23
environment. The Company has provided OEI with copies (or if not available,
accurate written summaries) of all environmental investigations, studies,
audits, reviews and other analyses conducted by or on behalf, or which otherwise
are in the possession, of the Company or any Company Subsidiary respecting any
facility, site or other property now or previously owned or operated by the
Company and each Company Subsidiary.
Section 4.16. LIABILITIES AND OBLIGATIONS. Section 4.16 of the
Disclosure Statement accurately lists all present liabilities, whether accrued,
absolute, fixed or contingent, of each of the Company and the Company
Subsidiaries which exceed or reasonably could be expected to exceed $100,000 and
which (a) had been incurred prior to the Current Balance Sheet Date, but are not
reflected on the Current Balance Sheet, or (b) were incurred after the Current
Balance Sheet otherwise than in the ordinary course of business, and consistent
with the past practice, of that Entity, in each case other than (i) obligations
and liabilities of the Company and the Company Subsidiaries in respect of the
Company Commitments, (ii) obligations and liabilities of the Company in respect
of each Company ERISA Benefit Plan, and (iii) obligations and liabilities of the
Company and the Company Subsidiaries set forth in the Disclosure Statement.
Section 4.16 of the Disclosure Statement also accurately lists and describes,
for each of the Company and the Company Subsidiaries: (a) each of its
outstanding secured and unsecured Guaranties not constituting its Indebtedness
and, for each of those Guaranties, whether any Stockholder or Related Person or
Affiliate of any Stockholder is a Person whose obligation is covered by that
Guaranty, and (b) for each of the items listed under clause (a) of this
sentence, (i) if that item is secured by any property or asset of the Company or
any Company Subsidiary, the nature of the security, and (ii) if that item is
covered in whole or in part by a Guaranty of any Stockholder or any Related
Person or Affiliate of any Stockholder, the name of the guarantor.
Section 4.17. RECEIVABLES. Except as accurately set forth in Section
4.17 of the Disclosure Statement, all the accounts and notes or other advances
receivable of the Company and the Company Subsidiaries reflected on the Current
Balance Sheet were collected, or are, in the good faith belief of the Company's
management, collectible, in the respective amounts so reflected, net of the
reserves, if any, reflected in the Current Balance Sheet, and were originated in
the ordinary course of business.
Section 4.18. OWNED AND LEASED REAL PROPERTIES.
(a) Section 4.18 of the Disclosure Statement accurately lists and
correctly describes in all material respects: (i) all real properties
owned by any of the Company and the Company Subsidiaries and, for each
of those properties, its address, the type and square footage of each
structure located thereon and the nature of its use in the business of
the Company and the Company Subsidiaries; (ii) all real properties of
which any of the Company and the Company Subsidiaries is the lessee and,
for each of those properties, its address, the type and square footage
of each structure located thereon which the Company or a Company
Subsidiary is leasing, the annual rental rate, the expiration date of
its lease and the use made of the leased property in the business of the
Company and the Company
24
Subsidiaries; and (iii) in the case of each real property listed as
being owned, whether it was previously owned, and in the case of each
real property listed as being leased, whether it is presently owned, by
any Stockholder or any of his Related Persons or Affiliates (other than
the Company and the Company Subsidiaries, if the Stockholder is an
Affiliate of the Company).
(b) The Company has provided OEI with true, complete and correct
copies of all title reports and title insurance policies owned or in the
possession of any of the Company and the Company Subsidiaries and
relating to any of the real properties identified in Section 4.18 of the
Disclosure Statement as being owned. Except as accurately set forth in
that Section or those reports and policies, and except for Permitted
Liens, the Company or a Company Subsidiary owns in fee, and has valid
and indefeasible title to, free and clear of all Liens, each property
listed in that Section as being owned.
(c) The Company has provided OEI with true, correct and complete
copies of all leases under which the Company or a Company Subsidiary is
leasing each of the real properties listed in Section 4.18(a)(ii) of the
Disclosure Statement as being leased, and, except as accurately set
forth in this Section 4.18(c) of the Disclosure Statement, (i) each of
the listed leases is, to the knowledge of the Company, valid and binding
on the lessor party thereto, and (ii) the lessee party thereto has not
sublet any of the leased space to any Person other than the Company or a
Company Subsidiary.
(d) The fixed assets of each of the Company and the Company
Subsidiaries are affixed only to one or more of the real properties
listed in Section 4.18 of the Disclosure Statement and, except as
accurately set forth in that Section, are well-maintained and adequate
for the purposes for which they presently are being used or held for
use, ordinary wear and tear excepted.
(e) The Company has accurately described, in all material
respects, in Section 4.18 of the Disclosure Statement all plans or
projects involving the opening of new operations, the expansion of any
existing operations or the acquisition of any real property or existing
business, with respect to which management of the Company or any Company
Subsidiary has made any expenditure in the two-year period prior to the
date of the Agreement in excess of $50,000, or which if pursued by the
Company or any Company Subsidiary would require additional capital
expenditures in excess of $50,000.
Section 4.19. OWNED AND LEASED PERSONAL PROPERTY.
(a) Section 4.19 of the Disclosure Statement accurately lists, in
all material respects, all machinery, equipment and other personal
property included in the Property, Plant and Equipment owned and leased
by any of the Company and the Company Subsidiaries, which list states,
in the case of each of those properties listed as being owned, whether
it was previously owned, and in the case of each of those properties
listed as being
25
leased, whether it is presently owned, by any Stockholder or any of his
Related Persons or Affiliates (other than the Company and the Company
Subsidiaries, if the Stockholder is an Affiliate of the Company).
(b) Except as accurately set forth in Section 4.19 of the
Disclosure Statement and except for Permitted Liens, the Company or a
Company Subsidiary has good, valid and indefeasible title to, free and
clear of all Liens, each asset listed in that Section as being owned,
free and clear of all Liens.
(c) The Company has provided OEI with true, correct and complete
copies of all leases under which the Company or a Company Subsidiary is
leasing each of the properties listed in Section 4.19 of the Disclosure
Statement as being leased and all leases referred to in Section 4.21
and, except as accurately set forth in Section 4.19 of the Disclosure
Statement, (i) each of those leases is, to the knowledge of the Company,
valid and binding on the lessor party thereto, and (ii) the lessee party
thereto has not sublet any of the leased property to any Person other
than the Company or a Company Subsidiary.
(d) Except as accurately set forth in Section 4.19 of the
Disclosure Statement, all items of machinery, equipment and other
personal property listed therein are in good working order and
condition, ordinary wear and tear excepted, and adequate for the
purposes for which they presently are being used or held for use.
Section 4.20. PROPRIETARY RIGHTS. Except as accurately set forth in
Section 4.20 of the Disclosure Statement, each of the Company and the Company
Subsidiaries owns or has the legal right to use all Proprietary Rights that are
necessary to the conduct of its business as now conducted, in each case free of
any claims or infringements known to the Company or any Stockholder. Section
4.20 of the Disclosure Statement accurately (a) lists all such Proprietary
Rights and (b) indicates those owned by the Company or any Company Subsidiary
and, for those not listed as so owned, the agreement or other arrangement
pursuant to which they are possessed or used. Except as accurately set forth in
Section 4.20 of the Disclosure Statement, (a) no consent of any Person will be
required for the use of any of these Proprietary Rights by OEI or any Subsidiary
of OEI following the Effective Time and (b) no governmental registration of any
of these Proprietary Rights has lapsed or expired or been canceled, abandoned,
opposed or the subject of any reexamination request.
Section 4.21. TITLE TO OTHER PROPERTIES. In each case, free and clear of
all Liens except for Permitted Liens and as accurately set forth in Section 4.21
of the Disclosure Statement, each of the Company and the Company Subsidiaries
has good and valid title to, or holds under a lease valid and, to the knowledge
of the Company and the Stockholders, binding on the lessor party thereto, all
its tangible personal properties and assets (other than Property, Plant and
Equipment) that individually is or in the aggregate are Material to the Company.
26
Section 4.22. CONTRACTS AND COMMITMENTS; SIGNIFICANT CUSTOMERS.
(a) In Section 4.22(a) of the Disclosure Statement, the Company
has completely and accurately listed each of the following (each a
"COMPANY COMMITMENT") to which any of the Company and the Company
Subsidiaries is a party or by which any of its properties is bound and
which presently remains executory in whole or in any part:
(i) each partnership, joint venture or
cost-sharing agreement;
(ii) each guaranty or suretyship,
indemnification or contribution agreement or performance bond, other than
indemnification agreements and performance bonds entered into or furnished in
connection with Engineering Contracts in the ordinary course of business;
(iii) each instrument, agreement or other
obligation evidencing or relating to Indebtedness of any of the Company and the
Company Subsidiaries or to money lent or to be lent to another Person;
(iv) each contract to purchase or sell real
property;
(v) each Engineering Contract for which
either the contract price or the cost of performance will or could reasonably be
expected to exceed 2% of the Company's total revenues (determined on a
consolidated basis if the Company has consolidated Subsidiaries) for the year
ended on the Current Balance Sheet Date (each a "MATERIAL ENGINEERING
CONTRACT");
(vi) each Related Party Agreement involving
total payments within any 12-month period in excess of $10,000 and which is not
terminable without penalty on no more than 30 days' prior notice;
(vii) each agreement (other than Engineering
Contracts and routine purchase orders or purchase order acknowledgments issued
or received in the ordinary course of business) for the acquisition or provision
of services, supplies, equipment, inventory, fixtures or other property
involving more than $50,000 in the aggregate;
(viii) each contract containing any
noncompetition agreement, covenant or undertaking; or
(ix) each other agreement or commitment not
made in the ordinary course of business that is Material to the Company.
27
True, correct and complete copies of all written Company Commitments,
and true, correct and complete written descriptions of all oral Company
Commitments, have been delivered or made available to OEI. Except as
accurately set forth in Section 4.22(a) of the Disclosure Statement: (i)
there are no existing or asserted defaults, events of default or events,
occurrences, acts or omissions that, with the giving of notice or lapse
of time or both, would constitute defaults or events of default under
any Company Commitment which is Material to the Company by any of the
Company and the Company Subsidiaries or, to the knowledge of the
Company, any other party thereto; and (ii) no penalties have been
incurred, nor are amendments pending, with respect to any Company
Commitment which is Material to the Company. The Company Commitments are
in full force and effect and are valid and enforceable obligations of
the Company or the Company Subsidiaries parties thereto and, to the
knowledge of the Company and the Stockholders, the other parties
thereto, in accordance with their respective terms, and no defenses,
off-sets or counterclaims have been asserted or, to the knowledge of the
Company and the Stockholders, may be made by any party thereto (other
than by the Company or a Company Subsidiary), nor has the Company or a
Company Subsidiary, as the case may be, waived any rights thereunder,
except as accurately described in Section 4.22 of the Disclosure
Statement.
(b) Section 4.22(b) of the Disclosure Statement accurately
describes each Material Engineering Contract by identifying its parties,
the nature of the project or services being or to be provided under the
contract by the Company or a Company Subsidiary, the contract price or
the method of determining the contract price, the percentage of
completion to date, the estimated completion date, and the names of all
subcontractors engaged or retained by the Company or a Company
Subsidiary in connection with the contract. Except as disclosed in
Section 4.22(b) of the Disclosure Statement, no Engineering Contract
contains terms, conditions or requirements which:
(i) exceed the current performance capabilities of the
Company or the applicable Company Subsidiary;
(ii) will or could reasonably be expected to result in a
total cost of performance which is in excess of the contract
price; or
(iii) will or could reasonably be expected to result in
the imposition of any delay penalties on the Company or a Company
Subsidiary for failure to complete all or a portion of the work
contemplated therein within a designated period of time.
(c) Except as accurately disclosed in Section 4.22(c) of the
Disclosure Statement or contemplated hereby or by any other Transaction
Document to which the Company or any Company Subsidiary or Stockholder
is a party: (i) neither the Company nor any Company Subsidiary or
Stockholder has knowledge that the Company or any Company Subsidiary has
received notice of any plan or intention of any other party to any
Company Commitment to exercise any right to cancel or terminate any
Company Commitment, and neither the
28
Company nor any Company Subsidiary or Stockholder knows of any condition
or state of facts, including the consummation of the Merger, which would
justify the exercise of such a right; and (ii) neither the Company nor
any Company Subsidiary or Stockholder currently contemplates any
amendment or change to any Company Commitment.
(d) Section 4.22(d) of the Disclosure Schedule identifies each
client or customer which accounted for 5% or more of the Company's
consolidated revenues for the year ended on the Current Balance Sheet
Date.
Section 4.23. CAPITAL EXPENDITURES. Section 4.23 of the Disclosure
Statement accurately sets forth the total amount of capital expenditures
currently budgeted to be incurred by the Company and the Company Subsidiaries
during the balance of the Company's current and next ensuing fiscal years.
Except as accurately set forth in Section 4.23 of the Disclosure Statement, to
the knowledge of the Company and the Stockholders, no condition or state of
facts exists which will cause the total capital expenditures of the Company and
the Company Subsidiaries which will be required to replace worn-out or obsolete
Property, Plant and Equipment in the Company's current and next ensuing fiscal
years to exceed the amount budgeted for capital expenditures by the Company and
the Company Subsidiaries for the current and next ensuing fiscal years in order
to maintain the types and levels of sales and services the Company and the
Company Subsidiaries presently make or provide.
Section 4.24. INVENTORIES. Except as accurately set forth in Section
4.24 of the Disclosure Statement: (a) all inventories, net of reserves
determined in accordance with GAAP, of each of the Company and the Company
Subsidiaries which are classified as such on the Current Balance Sheet are, to
the knowledge of the Company, merchantable and salable or usable in the ordinary
course of business of the Company and the Company Subsidiaries; (b) the
inventories reflected in the Financial Statements, as at the Current Balance
Sheet Date, (i) were reasonable in relation to the then existing circumstances
of the Company (and the Company Subsidiaries on a consolidated basis, if
applicable) and classified as current assets in accordance with GAAP, (ii) were
consistent with their past practices and (iii) fairly reflected the average
inventory levels maintained during the 12-month period ended on that date; and
(c) neither the Company nor any Company Subsidiary depends on any single vendor
for its inventories the loss of which could have a Material Adverse Effect on
the Company or within the last three calendar years has sustained a difficulty
Material to the Company in obtaining its inventories.
Section 4.25. INSURANCE. Except as accurately set forth in Section 4.25
of the Disclosure Statement: (a) the Company has provided OEI with: (i) a list
of all insurance policies carried by each of the Company and the Company
Subsidiaries; (ii) an accurate list of all insurance loss runs and worker's
compensation claims received for the most recently ended three policy years; and
(iii) true, complete and correct copies of all insurance policies carried by
each of the Company and the Company Subsidiaries which are in effect, all of
which have been issued by insurers of recognized responsibility and currently
are, and will remain without interruption through the IPO Closing Date, in full
force and effect; (b) no insurance carried by the Company or any Company
Subsidiary has
29
been canceled by the insurer during the past five years, and neither the Company
nor any Company Subsidiary has been denied coverage during the past five years;
and (c) neither the Company, any Company Subsidiary nor any Stockholder has
received any notice or other communication from any issuer of any listed
insurance policy of any material increase in any deductibles, retained amounts
or the premiums payable thereunder, and, to the knowledge of the Company and the
Stockholders, no such increase in deductibles, retainages or premiums is
threatened.
Section 4.26. EMPLOYEE MATTERS.
(a) CASH COMPENSATION. Section 4.26 of the Disclosure Statement
accurately lists the names, titles and rates of annual Cash
Compensation, at the Current Balance Sheet Date and at the date hereof
(and the portions thereof attributable to salary or the equivalent,
fixed bonuses, discretionary bonuses and other Cash Compensation,
respectively) of all key employees (including all employees who are
officers or directors and all employees who are Immediate Family Members
of a Stockholder), nonemployee officers, nonemployee directors and key
consultants of each of the Company and the Company Subsidiaries.
(b) EMPLOYMENT AGREEMENTS. Section 4.26(b) of the Disclosure
Statement accurately lists all Employment Agreements remaining executory
in whole or in part on the date hereof, complete and correct copies of
all of which have been provided to OEI by the Company. Neither the
Company nor any Company Subsidiary is a party to any oral Employment
Agreement.
(c) OTHER COMPENSATION PLANS. Section 4.26(c) of the Disclosure
Statement accurately lists all Other Compensation Plans either remaining
executory at the date of this Agreement or to later become effective.
The Company has provided OEI with a true, correct and complete copy of
each of the listed Other Compensation Plans that is in writing and an
accurate description of each of the listed Other Compensation Plans that
is not written. Except as accurately set forth in Section 4.26(c) of the
Disclosure Statement, each of the Other Compensation Plans, including
each that is a Welfare Plan, may be unilaterally amended or terminated
by the Company or any Company Subsidiary without liability to any of
them, except as to benefits accrued thereunder prior to amendment or
termination.
(d) ERISA BENEFIT PLANS. Section 4.26(d) of the Disclosure
Statement accurately (i) lists each ERISA Pension Benefit Plan (A) the
funding requirements of which (under Section 302 of ERISA or Section 412
of the Code) are, or at any time during the six-year period ending on
the date of this Agreement were, in whole or in part, the responsibility
of the Company or any Company Subsidiary, or respecting which the
Company or any Company Subsidiary is, or at any time during that period
was, a "contributing sponsor" or an "employer" as defined in Sections
4001(a)(13) and 3(5), respectively, of ERISA (each plan described in
this clause (A) being a "Company ERISA Pension Plan"), (B) each other
ERISA Pension Benefit Plan respecting which an ERISA Affiliate is, or at
any time during that period was, such a "contributing sponsor" or
"employer" (each plan described in this
30
clause (B) being an "ERISA Affiliate Pension Plan"), and (c) each other
ERISA Employee Benefit Plan that is being, or at any time during that
period was, sponsored, maintained or contributed to by the Company or
any Company Subsidiary (each plan described in this clause (c) and each
Company ERISA Pension Plan being a "Company ERISA Benefit Plan"), (ii)
states the termination date of each Company ERISA Benefit Plan and ERISA
Affiliate Pension Plan that has been terminated, and (iii) identifies
for each ERISA Affiliate Pension Plan the relevant ERISA Affiliates. The
Company has provided OEI with true, complete and correct copies of (i)
each Company ERISA Benefit Plan and ERISA Affiliate Pension Plan, (ii)
each trust agreement related thereto, and (iii) all amendments to all
such plans and trust agreements. Except as accurately set forth in
Section 4.26(d) of the Disclosure Statement, (i) neither the Company nor
any Company Subsidiary is, or at any time during the six-year period
ended on the date of this Agreement was, a member of any ERISA Group
that currently includes, or included when the Company or a Company
Subsidiary was a member, among its members any Person other than the
Company and the Company Subsidiaries, and (ii) no Person is an ERISA
Affiliate of the Company or any Company Subsidiary (other than the
Company or any Company Subsidiary in the case of any other Company
Subsidiary or any Company Subsidiary in the case of the Company, if the
Company and the Company Subsidiaries comprise an ERISA Group).
(e) EMPLOYEE POLICIES AND PROCEDURES. Section 4.26(e) of the
Disclosure Statement accurately lists all Employee Policies and
Procedures. The Company has provided OEI with a copy of all written
Employee Policies and Procedures and a written description of all
material unwritten Employee Policies and Procedures the continuance or
discontinuance of which could reasonably be expected to have a Material
Adverse Effect.
(f) UNWRITTEN AMENDMENTS. Except as accurately described in
Section 4.26(f) of the Disclosure Statement, no material unwritten
amendments have been made, whether by oral communication, pattern of
conduct or otherwise, with respect to any of the Employment Agreements,
Other Compensation Plans or Employee Policies and Procedures.
(g) LABOR COMPLIANCE. Each of the Company and the Company
Subsidiaries has been and is in compliance with all applicable
Governmental Requirements respecting employment and employment
practices, terms and conditions of employment and wages and hours, and
neither the Company nor any Company Subsidiary is liable for any arrears
of wages or penalties for failure to comply with any of the foregoing.
Neither the Company nor any Company Subsidiary has engaged in any unfair
labor practice or discriminated on the basis of race, color, religion,
sex, national origin, age, disability or handicap in its employment
conditions or practices. Except as accurately set forth in Section
4.26(g) of the Disclosure Statement, there are no (i) unfair labor
practice charges or complaints or racial, color, religious, sex,
national origin, age, disability or handicap discrimination charges or
complaints pending or, to the knowledge of the Company, threatened
against the Company or any of the Company Subsidiaries before any
Governmental Authority (nor, to the knowledge of the Company, does any
valid basis therefor exist) or (ii) existing or, to the
31
knowledge of the Company, threatened labor strikes, disputes,
grievances, controversies or other labor troubles affecting the Company
or any of the Company Subsidiaries (nor, to the knowledge of the
Company, does any valid basis therefor exist).
(h) UNIONS. Neither the Company nor any Company Subsidiary or
ERISA Affiliate has ever been a party to any agreement with any union,
labor organization or collective bargaining unit. No employees of any of
the Company and the Company Subsidiaries are represented by any union,
labor organization or collective bargaining unit. Except as accurately
set forth in Section 4.26(h) of the Disclosure Statement, to the
knowledge of the Company, none of the employees of the Company and the
Company Subsidiaries has threatened to organize or join a union, labor
organization or collective bargaining unit.
(i) NO ALIENS. All employees of each of the Company and the
Company Subsidiaries are citizens of, or are authorized in accordance
with federal immigration laws to be employed in, the United States.
(j) CHANGE OF CONTROL BENEFITS. Except as accurately set forth in
Section 4.26(j) of the Disclosure Statement, neither the Company nor any
of the Company Subsidiaries is a party to any agreement, or has
established any policy, practice or program, requiring it to make a
payment or provide any other form of compensation or benefit or vesting
rights to any person performing services for the Company or any of the
Company Subsidiaries which would not be payable or provided in the
absence of this Agreement or the consummation of the transactions
contemplated by this Agreement, including any parachute payment under
Section 280G of the Code.
(k) RETIREES. Neither the Company nor any of the Company
Subsidiaries has any obligation or commitment to provide medical, dental
or life insurance benefits to or on behalf of any of its employees who
may retire or any of its former employees who have retired except (i) as
may be required pursuant to the continuation of coverage provisions of
Section 4980B of the Code, the applicable parallel provisions of ERISA
and any other applicable federal or state law, (ii) continuation of
benefits in the event of disability, and (iii) conversion privileges
provided under any insured Company ERISA Employee Benefit Plans.
(l) INDEPENDENT CONTRACTORS. No Person that was engaged by the
Company or a Company Subsidiary as an independent contractor can or will
be characterized or deemed to be an employee of the Company under any
Governmental Requirement for any purpose including for purposes of any
Taxes or any Plan.
Section 4.27. COMPLIANCE WITH ERISA, ETC.
(a) COMPLIANCE. Each of the Company ERISA Benefit Plans and Other
Compensation Plans (each, a "PLAN") (i) is in substantial compliance
with all applicable
32
provisions of ERISA and the Code, as well as with all other applicable
Governmental Requirements, and (ii) has been administered, operated and
managed in accordance with its governing documents.
(b) QUALIFICATION. All Plans that are intended to qualify under
Section 401(a) of the Code (the "QUALIFIED PLANS") are so qualified and
have been determined by the IRS to be so qualified (or application for
determination letters have been timely submitted to the IRS). The
Company has provided OEI with true, complete and correct copies of the
current plan determination letters, most recent actuarial valuation
reports, if any, most recent Form 5500, or, as applicable, Form
5500-C/R, filed with respect to each Qualified Plan and most recent
trustee or custodian report. To the extent that any Qualified Plans have
not been amended to comply with applicable Governmental Requirements,
the remedial amendment period permitting retroactive amendment of these
Qualified Plans has not expired and will not expire within 120 days
after the Effective Time. All reports and other documents required to be
filed with any governmental agency or distributed to plan participants
or beneficiaries (including annual reports, summary annual reports,
actuarial reports, PBGC-1 Forms, audits or Returns) have been timely
filed or distributed.
(c) NO PROHIBITED TRANSACTIONS, ETC. None of the Stockholders,
any Plan or the Company or any Company Subsidiary has engaged in any
Prohibited Transaction. No Plan has incurred an accumulated funding
deficiency, as defined in Section 412(a) of the Code and Section 302(a)
of ERISA, and no circumstances exist under which the Company or any
Company Subsidiary could have any liability (including being subject to
any statutory Lien to secure payment of any such liability), to the PBGC
under Title IV of ERISA or to the IRS for any excise tax or penalty with
respect to any Plan maintained or contributed to by the Company or any
of its ERISA Affiliates. Further:
(i) there have been no terminations, partial terminations
or discontinuances of contributions to any Qualified Plan without
a determination by the IRS that such action does not adversely
affect the tax-qualified status of that plan;
(ii) no Termination Event has occurred;
(iii) no Reportable Event has occurred with respect to any
Plan which was not properly reported;
(iv) the valuation of assets of any Qualified Plan, as of
the Effective Time, will equal or exceed the actuarial present
value of all "BENEFIT LIABILITIES" (within the meaning of Section
4001(a)(16) of ERISA) under that plan in accordance with the
assumptions contained in the Regulations of the PBGC governing
the funding of terminated defined benefit plans;
33
(v) with respect to Plans qualifying as "GROUP HEALTH
PLANS" under Section 4980B of the Code or Section 607(l) or 609
of ERISA and related regulations (relating to the benefit
continuation rights imposed by "COBRA" or qualified medical child
support orders), the Company and each Company Subsidiary have
complied in all material respects with all reporting, disclosure,
notice, election and other benefit continuation and coverage
requirements imposed thereunder as and when applicable to those
plans, and neither the Company nor any Company Subsidiary has
incurred (or will incur) any liability or is (or will be) subject
to any loss, assessment, excise tax penalty, loss of federal
income tax deduction or other sanction, arising on account of or
in respect of any failure by the Company or any Company
Subsidiary, at any time prior to the Effective Time, to comply
with any such federal or state benefit continuation or coverage
requirement, which is capable of being assessed or asserted
before or after the Effective Time against the Company, any
Company Subsidiary, the Surviving Corporation or OEI with respect
to any of those group health plans;
(vi) the Financial Statements as of the Current Balance
Sheet Date reflect the approximate total pension, medical and
other benefit liability for all Plans, and no material funding
changes or irregularities are reflected thereon which would cause
those Financial Statements to be not representative of prior
periods;
(vii) neither the Company nor any Company Subsidiary has
incurred liability under Section 4062 of ERISA;
(viii) there are no investigations or audits of any Plan
by any Governmental Authority which are pending or, to the
knowledge of the Company and the Stockholders, threatened, and
there have been no such investigations or audits that have been
concluded that resulted in any liability of the Company or any
Company Subsidiary that has not been fully discharged; and
(ix) neither the Company nor any Company Subsidiary has
participated in any voluntary compliance or self-correction
program established by the IRS, or entered into any closing
agreement with the IRS with respect to the form or operation of
any Plan.
(d) MULTIEMPLOYER PLANS. Except as set forth in Section 4.27(d)
of the Disclosure Statement, neither the Company nor any Company
Subsidiary, and no ERISA Affiliate of any of them, is, or at any time
during the six-year period ended on the date of this Agreement was,
obligated to contribute to a Multiemployer Plan. Neither the Company nor
any Company Subsidiary, and no ERISA Affiliate of any of them, has made
a complete or partial withdrawal from a Multiemployer Plan so as to
incur withdrawal liability as defined in Section 4201 of ERISA.
34
(e) CLAIMS AND LITIGATION. Except as accurately set forth in
Section 4.27(e) of the Disclosure Statement, no Litigation or claims
(other than routine claims for benefits) are pending or, to the
knowledge of the Company, threatened against, or with respect to, any of
the Plans or with respect to any fiduciary, administrator or sponsor
thereof (in their capacities as such), or any party-in-interest thereof.
(f) EXCISE TAXES, DAMAGES AND PENALTIES. No act, omission or
transaction has occurred which would result in the imposition on the
Company or any Company Subsidiary of (i) breach of fiduciary duty
liability damages under Section 409 of ERISA, (ii) a civil penalty
assessed pursuant to Section 502 of ERISA or (iii) any excise tax under
applicable provisions of the Code with respect to any Plan.
(g) VEBA WELFARE TRUST. Any trust funding a Plan which is
intended to be exempt from federal income taxation pursuant to Section
501(c)(9) of the Code, satisfies the requirements of that section and
has received a favorable determination letter from the IRS regarding the
Plan's exempt status and has not, since receipt of the most recent
favorable determination letter, been amended or operated in a way that
would adversely affect its exempt status.
Section 4.28. TAXES.
(a) Each of the following representations and warranties in this
Section 4.28 is qualified to the extent set forth in Section 4.28 of the
Disclosure Statement.
(b) All Returns required to be filed with respect to any Tax for
which any of the Company and the Company Subsidiaries is liable have
been duly and timely filed with the appropriate Taxing Authority, and
each such Return correctly reflects the Tax liability and all other
information required to be reported thereon. Each Tax shown to be
payable on each such Return has been paid, each Tax payable by the
Company or a Company Subsidiary by assessment has been timely paid in
the amount assessed, and adequate reserves have been established on the
consolidated books of the Company and the Company Subsidiaries for all
Taxes for which any of the Company and the Company Subsidiaries is
liable, but the payment of which is not yet due. Neither the Company nor
any Company Subsidiary is, or ever has been, liable for any Tax payable
by reason of the income or property of a Person other than the Company
or a Company Subsidiary. Each of the Company and the Company
Subsidiaries has timely filed true, correct and complete declarations of
estimated Tax in each jurisdiction in which any such declaration is
required to be filed by it. No Liens for Taxes exist upon the assets of
the Company or any Company Subsidiary except Liens for Taxes which are
not yet due. Neither the Company nor any Company Subsidiary is, or ever
has been, subject to Tax in any jurisdiction outside of the United
States. No Litigation with respect to any Tax for which the Company or
any Company Subsidiary is asserted to be liable is pending or, to the
knowledge of the Company or any Stockholder, threatened, and no basis
which the Company or any Stockholder believes to be valid exists on
which any
35
claim for any such Tax can be asserted against the Company or any
Company Subsidiary. There are no requests for rulings or determinations
in respect of any Taxes pending between the Company, or any Company
Subsidiary, and any Taxing Authority. No extension of any period during
which any Tax may be assessed or collected and for which the Company or
any Company Subsidiary is or may be liable, and no extension of the time
within which the Company or any Company Subsidiary must file any Return,
has been granted to, or requested from, any Taxing Authority. Neither
the Company nor any Company Subsidiary is or has been a party to any tax
allocation or sharing agreement. All amounts required to be withheld by
any of the Company and the Company Subsidiaries and paid to governmental
agencies for income, social security, unemployment insurance, sales,
excise, use and other Taxes have been collected or withheld and paid to
the proper Taxing Authority. The Company and each Company Subsidiary
have made all deposits required by law to be made with respect to
employees' withholding and other employment Taxes.
(c) Neither the Company nor any Stockholder is a "foreign
person," as that term is referred to in Section 1445(f)(3) of the Code.
(d) The Company has not filed a consent pursuant to Section 341
(f) of the Code or any comparable provision of any other tax statute and
has not agreed to have Section 341 (f)(2) of the Code or any comparable
provision of any other Tax statute apply to any disposition of an asset.
No asset of the Company or of any Company Subsidiary is subject to any
provision of applicable law which eliminates or reduces the allowance
for depreciation or amortization in respect of that asset below the
allowance generally available to an asset of its type. No accounting
method changes of the Company or of any Company Subsidiary exist or are
proposed or threatened which could give rise to an adjustment under
Section 481 of the Code.
Section 4.29. GOVERNMENT CONTRACTS. Except as accurately set forth in
Section 4.29 of the Disclosure Statement, neither the Company nor any Company
Subsidiary is a party to any governmental contract subject to price
redetermination or renegotiation.
Section 4.30. ABSENCE OF CHANGE. Since the Current Balance Sheet Date,
except as accurately set forth in Section 4.30 of the Disclosure Statement, none
of the following has occurred with respect to the Company or any Company
Subsidiary:
(a) to the knowledge of the Company and the Stockholders, any
circumstance, condition, event or state of facts (either singly or in
the aggregate), other than conditions affecting the economy industry
generally, which has caused, is causing or could reasonably be expected
to cause a Material Adverse Effect on the Company;
(b) any change in its authorized Capital Stock or in any of its
outstanding Capital Stock or Derivative Securities;
36
(c) any Restricted Payment, except any declaration or payment of
dividends by any Company Subsidiary solely to the Company;
(d) any increase in, or any commitment or promise to increase,
the rates of Cash Compensation as of the date hereof, or the amounts or
other benefits paid or payable under any Company ERISA Pension Plan or
Other Compensation Plan, except for ordinary and customary bonuses and
salary increases for employees (other than the Stockholders or their
Immediate Family Members) at the times and in the amounts consistent
with its past practice;
(e) any work interruptions, labor grievances or claims filed, or
any similar event or condition of any character, that will have a
Material Adverse Effect on the Surviving Corporation following the
Effective Time;
(f) any distribution, sale or transfer of, or any Company
Commitment to distribute, sell or transfer, any of its assets or
properties of any kind which singly is or in the aggregate are Material
to the Company, other than distributions, sales or transfers in the
ordinary course of its business and consistent with its past practices
to Persons other than to the Stockholders and their Immediate Family
Members and Affiliates;
(g) any cancellation, or agreement to cancel, any Indebtedness,
obligation or other liability owing to it, including any Indebtedness,
obligation or other liability of any Stockholder or any Related Person
or Affiliate thereof, provided that the Company or a Company Subsidiary
may negotiate and adjust bills in the course of good faith disputes with
customers in a manner consistent with past practice, if the adjustments
are (i) included in the Supplemental Information provided OEI pursuant
to Section 6.07 or (ii) do not exceed $25,000 in the aggregate;
(h) any plan, agreement or arrangement granting any preferential
rights to purchase or acquire any interest in any of its assets,
property or rights or requiring consent of any Person to the transfer
and assignment of any such assets, property or rights;
(i) any purchase or acquisition of, or agreement, plan or
arrangement to purchase or acquire, any property, rights or assets
outside of the ordinary course of its business or not consistent with
its past practices;
(j) any waiver of any of its rights or claims that singly is or
in the aggregate are Material to the Company;
(k) any transaction by it outside the ordinary course of its
business or not consistent with its past practices and which involves in
excess of $200,000;
37
(1) any incurrence by it of any Indebtedness or any Guaranty not
constituting its Indebtedness, or any Company Commitment to incur any
Indebtedness or any such Guaranty;
(m) any investment in the Capital Stock, Derivative Securities or
Indebtedness of any Person, other than a Permitted Investment;
(n) except in accordance with the Company's consolidated capital
expenditure budget for the Company's current fiscal year, any capital
expenditure or series of related capital expenditures by the Company and
the Company Subsidiaries collectively in excess of $100,000, or
commitments by the Company and the Company Subsidiaries to make capital
expenditures totaling in excess of $100,000; or
(o) any cancellation or termination of a Material Agreement of
the Company.
Section 4.31. BANK RELATIONS; POWERS OF ATTORNEY. Section 4.31 of the
Disclosure Statement accurately lists and identifies:
(a) the name of each financial institution in which the Company
or any Company Subsidiary has borrowing or investment arrangements,
deposit or checking accounts or safe deposit boxes;
(b) the types of those arrangements and accounts, including, as
applicable, names in which accounts or boxes are held, the account or
box numbers and the name of each Person authorized to draw thereon or
have access thereto; and
(c) the name of each Person holding a general or special power of
attorney from the Company or any Company Subsidiary and a description of
the terms of each such power.
Section 4.32. RELATIONS WITH GOVERNMENTS, ETC. Neither the Company nor
any Company Subsidiary has made, offered or agreed to offer anything of value to
any governmental official, political party or candidate for government office
which would cause the Company or any Company Subsidiary to be in violation of
the Foreign Corrupt Practices Act of 1977 or any Governmental Requirement to a
similar effect.
38
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF OEI AND NEWCO
Section 5.02. ORGANIZATION; POWER. OEI is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and each of OEI and Newco has all requisite corporate power and authority under
the laws of its Organization State and its Charter Documents to own or lease and
to operate its properties presently and following the Effective Time and to
carry on its business as now conducted and as proposed to be conducted following
the Effective Time. Neither OEI nor Newco has engaged in any operations since
its organization other than in connection with their formation and
capitalization and the transactions contemplated by this Agreement and the Other
Agreements.
Section 5.03. AUTHORIZATION; ENFORCEABILITY; ABSENCE OF CONFLICTS;
REQUIRED CONSENTS.
(a) The execution, delivery and performance by each of OEI and
Newco of this Agreement and each other Transaction Document to which it
is a party, and the effectuation of the Merger and the other
transactions contemplated hereby and thereby, are within its corporate
power under its Charter Documents and the applicable Governmental
Requirements of its Organization State and have been duly authorized by
all proceedings, including actions permitted to be taken in lieu of
proceedings, required under its Charter Documents and the applicable
Governmental Requirements of its Organization State.
(b) This Agreement has been, and each of the other Transaction
Documents to which either of OEI or Newco is a party, when executed and
delivered to the other parties thereto (or, in the case of the
Certificate of Merger, the applicable Governmental Authorities), will
have been, duly executed and delivered by it and is, or when so executed
and delivered will be, its legal, valid and binding obligation,
enforceable against it in accordance with its terms, except as
enforceability may be (i) limited by any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and (ii) subject to general
principles of equity (regardless of whether enforceability is considered
in a proceeding in equity or at law).
(c) The execution, delivery and performance in accordance with
their respective terms by each of OEI and Newco of the Transaction
Documents to which it is a party do not and will not (i) violate, breach
or constitute a default under (A) the Charter Documents of OEI or Newco,
(B) any Governmental Requirement applicable to OEI or Newco or (C) any
Material Agreement of OEI or Newco, (ii) result in the acceleration or
mandatory prepayment of any Indebtedness, or any Guaranty not
constituting Indebtedness, of OEI or Newco or afford any holder of any
of that Indebtedness, or any beneficiary of any of those Guaranties, the
right to require OEI or Newco to redeem, purchase or otherwise acquire,
reacquire or repay any of that Indebtedness, or to perform any of those
Guaranties, (iii) cause or result in the imposition of, or afford any
Person the right to obtain, any Lien upon any
39
property or assets of OEI or Newco (or upon any revenues, income or
profits of either OEI or Newco therefrom) or (iv) result in the
revocation, cancellation, suspension or material modification, in any
single case or in the aggregate, of any Governmental Approval possessed
by OEI or Newco at the date of this Agreement and necessary for the
ownership or lease and the operation of its properties or the carrying
on of its business as now conducted, including any necessary
Governmental Approval under each applicable Environmental Law.
(d) Except for (i) the filing of the Certificate of Merger with
the applicable Governmental Authorities, (ii) filings of the
Registration Statement under the Securities Act and a registration
statement on Form 8-A with respect to the registration of the OEI Common
Stock under the Exchange Act and the SEC order declaring those
registration statements effective under the Securities Act and the
Exchange Act, respectively, and (iii) as may be required by the HSR Act
or the applicable state securities or blue sky laws, no Governmental
Approvals are required to be obtained, and no reports or notices to or
filings with any Governmental Authority are required to be made, by OEI
or Newco for the execution, delivery or performance by OEI or Newco of
the Transaction Documents to which it is a party, the enforcement
against OEI or Newco, as the case may be, of its obligations thereunder
or the effectuation of the Merger and the other transactions
contemplated thereby.
Section 5.04. CHARTER DOCUMENTS. OEI has delivered to the Company true,
complete and correct copies of the Charter Documents of each of OEI and Newco.
No breach or violation of any Charter Document of either OEI or Newco has
occurred and is continuing.
Section 5.05. CAPITAL STOCK OF OEI AND NEWCO.
(a) Immediately prior to the Effective Time, (i) the authorized
Capital Stock of OEI will be comprised of (A) 40 million shares of OEI
Common Stock and (B) one million shares of preferred stock, $.001 par
value per share, (ii) before giving effect to the Merger and the merger
transactions contemplated by the Other Agreements, (A) the number of
shares of OEI Common Stock then issued and outstanding, will be as set
forth in the Registration Statement when it becomes effective under the
Securities Act, (B) no shares of the OEI preferred stock then will be
issued or outstanding, and (C) OEI will have authorized and reserved for
issuance, pursuant to Other Compensation Plans or the exercise of
Derivative Securities the number of shares of OEI Common Stock set forth
in the Registration Statement when it becomes effective under the
Securities Act.
(b) The authorized Capital Stock of Newco is comprised of 1,000
shares of Newco Common Stock, all of which shares are issued,
outstanding and owned, of record and beneficially, by OEI.
(c) All shares of OEI Common Stock and Newco Common Stock
outstanding immediately prior to the Effective Time, and all shares of
OEI Common Stock to be issued
40
pursuant to Section 2.04, when issued, will have been duly authorized
and validly issued in accordance with the DGCL or the Business
Corporation Act, as the case may be, and their issuer's Charter
Documents, and will be fully paid and nonassessable. None of the shares
of OEI Common Stock to be issued pursuant to Section 2.04 will, when
issued, have been issued in breach or violation of (i) any applicable
statutory or contractual preemptive rights, or any other rights of any
kind (including any rights of first offer or refusal), of any Person or
(ii) the terms of any of its Derivative Securities then outstanding.
Section 5.06. SUBSIDIARIES. Immediately prior to the IPO Closing Date,
(a) OEI will have no Subsidiaries other than Newco and each Entity defined as
"Newco" in each of the Other Agreements, (b) Newco will have no Subsidiaries,
and (c) neither OEI nor Newco will own, of record or beneficially, directly or
indirectly through any Person or otherwise (except pursuant hereto or to the
Other Agreements), any Capital Stock or Derivative Securities of any Entity not
described in this Section 5.06 as a Subsidiary of OEI (in the case of OEI) or
any Entity (in the case of Newco).
Section 5.07. LIABILITIES. Except as disclosed in the Private Placement
Memorandum, neither OEI nor Newco has any material operations or liabilities of
any kind other than those engaged in or incurred in connection with this
Agreement and the Other Agreements and the transactions contemplated hereby and
thereby, including the IPO.
Section 5.08. COMPLIANCE WITH LAWS; NO LITIGATION. Each of OEI and Newco
is in compliance with all Governmental Requirements applicable to it, and no
Litigation is pending or, to the knowledge of OEI, threatened to which OEI or
Newco is or may become a party which questions or involves the validity or
enforceability of any obligation of OEI or Newco under any Transaction Document,
or which seeks (or reasonably may be expected to seek) (a) to prevent or delay
consummation by OEI or Newco of the transactions contemplated by this Agreement
to be consummated by OEI or Newco, as the case may be, or (b) Damages from OEI
or Newco in connection with any such consummation.
Section 5.09. NO BROKERS. OEI has not, directly or indirectly, in
connection with this Agreement or the transactions contemplated hereby, employed
any broker, finder or agent, or agreed to pay or incurred any obligation to pay
any broker's or finder's fee, any sales commission or any similar form of
compensation.
Section 5.10. PRIVATE PLACEMENT MEMORANDUM. At the date hereof, the
Private Placement Memorandum (other than the historical financial statements,
including the notes thereto, of the Founding Companies (other than the Company)
and the historical information contained therein respecting the Company and the
Stockholders, to which this Section 5.10 does not apply) does not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements contained therein not materially misleading in
the light of the circumstances under which those statements are made.
41
Section 5.11. REGISTRATION AND OTHER RIGHTS. Except as set forth in the
Registration Rights Agreement or otherwise described in the Private Placement
Memorandum or the Registration Statement, at the Effective Time OEI will have no
(a) commitment to any Person to cause securities of OEI to be registered under
the Securities Act or the securities laws of any state, (b) outstanding
Derivative Securities, or (c) outstanding agreements or commitments of any
character committing OEI to issue or acquire shares of its Capital Stock or
Derivative Securities.
42
ARTICLE VI
COVENANTS EXTENDING TO THE EFFECTIVE TIME
Section 6.02 ACCESS AND COOPERATION; DUE DILIGENCE.
(a) From the date of this Agreement until the IPO Closing Date,
the Company, for the benefit of OEI and each Other Founding Company,
will (i) afford to the Representatives of OEI and each Other Founding
Company reasonable access to all the key employees, sites, properties,
books and records of each of the Company and the Company Subsidiaries,
(ii) provide OEI with such additional financial and operating data and
other information relating to the business and properties of each of the
Company and the Company Subsidiaries as OEI or any Other Founding
Company may from time to time reasonably request, and (iii) cooperate
with OEI and each Other Founding Company and their respective
Representatives in the preparation of any documents or other material
which may be required in connection with any Transaction Documents or
any Other Transaction Documents. Each Stockholder and the Company agree,
for the benefit of OEI and each Other Founding Company, that they will
treat all Confidential Information obtained by them in connection with
the negotiation and performance of this Agreement or the due diligence
investigations conducted with respect to each Other Founding Company as
confidential in accordance with the provisions of Section 11.01. In
addition, OEI will cause each Other Founding Company to enter into a
provision identical to this Section 6.02 to require each Other Founding
Company to keep confidential any Confidential Information respecting any
of the Company and the Company Subsidiaries obtained by that Other
Founding Company.
(b) Each of the Company and the Stockholders will use its best
efforts to secure, as soon as practicable after the execution of this
Agreement, all approvals or consents of third Persons as may be
necessary to consummate the transactions contemplated hereby.
(c) From the date hereof until the IPO Closing Date, OEI and
Newco will (i) afford to the Representatives of the Company and the
Stockholders access to all sites, properties, books and records of OEI
and Newco, (ii) provide the Company with such additional financial and
operating data and other information relating to the business and
properties of OEI and Newco as the Company or any Stockholder may from
time to time reasonably request, and (iii) cooperate with the Company
and the Stockholders and their respective Representatives in the
preparation of any documents or other material which may be required in
connection with any Transaction Documents.
(d) If this Agreement is terminated pursuant to Section 12.01,
OEI promptly will return all written Confidential Information of the
Company it then possesses to the Company.
43
Section 6.03. CONDUCT OF BUSINESS PENDING CLOSING. From the date of this
Agreement until the Effective Time, the Company will, and will cause each
Company Subsidiary to, except as and only to the extent set forth in Schedule
6.03:
(a) carry on its businesses in substantially the same manner as
it has before, and not introduce any material new method of management,
operation or accounting;
(b) maintain its properties and facilities, including those held
under leases, in as good working order and condition as at present,
ordinary wear and tear excepted;
(c) perform all its obligations under agreements relating to or
affecting its assets, properties and other rights;
(d) keep in full force and effect, without interruption, all its
present insurance policies or other comparable insurance coverage;
(e) use reasonable commercial efforts to (i) maintain and
preserve its business organization intact, (ii) retain its present
employees, and (iii) maintain its relationships with suppliers,
subcontractors, customers and others having business relations with it;
(f) comply in all material respects with all applicable
Governmental Requirements; and
(g) except as required or expressly permitted by this Agreement,
maintain the instruments and agreements governing its outstanding
Indebtedness and leases on their present terms and not enter into new or
amended Indebtedness or lease instruments or agreements involving
amounts over $25,000 in any case or $50,000 in the aggregate, without
the prior written consent of OEI (which consent will not be unreasonably
withheld).
Section 6.04. PROHIBITED ACTIVITIES. From the date of this Agreement
until the Effective Time, without the prior written consent of OEI or unless as
required or expressly permitted by this Agreement, the Company will not, and
will not permit any Company Subsidiary to, except as and only to the extent set
forth in Schedule 6.04:
(a) make any change in its Charter Documents;
(b) issue any of its Capital Stock or issue or otherwise create
any of its Derivative Securities;
(c) make any Restricted Payment (other than as provided in
Schedule 6.04);
(d) make any investments (other than Permitted Investments) in
the Capital Stock, Derivative Securities or Indebtedness of any Person;
44
(e) enter into any contract or commitment (other than an
Engineering Contract) or incur or agree to incur any liability or make
any capital expenditures in a single transaction or a series of related
transactions involving an aggregate amount of more than $25,000
otherwise than in the ordinary course of its business and consistent
with its past practice;
(f) increase or commit or promise to increase the Cash
Compensation payable or to become payable to any officer, director,
stockholder, employee or agent, consultant or independent contractor of
any of the Company and the Company Subsidiaries or make any
discretionary bonus or management fee payment to any such Person, except
bonuses or salary increases to employees (other than the Stockholders or
their Immediate Family Members) at the times and in the amounts
consistent with its past practice;
(g) create or assume any Liens (other than Permitted Liens) upon
any of its assets or properties, whether now owned or hereafter
acquired, except for purchase money Liens incurred in connection with
the acquisition of equipment with an aggregate cost not in excess of
$25,000 and necessary or desirable for the conduct of the business of
any of the Company and the Company Subsidiaries;
(h) adopt, establish, amend (except as may be necessary to comply
with any Governmental Requirement or to maintain the qualified or exempt
status of a Plan under ERISA or the Code) or terminate any ERISA
Employee Benefit Plan, or any Other Compensation Plan or Employee
Policies and Procedures, or take any discretionary action, or omit to
take any contractually required action, if that action or omission could
either (i) deplete the assets of any ERISA Employee Benefit Plan or any
Other Compensation Plan or (ii) increase the liabilities or obligations
under any such plan;
(i) sell, assign, lease or otherwise transfer or dispose of any
of its owned or leased Property, Plant or Equipment otherwise than in
the ordinary course of its business and consistent with its past
practice;
(j) negotiate for the acquisition of any business or the
start-up of any new business;
(k) merge, consolidate or effect a share exchange with, or agree
to merge, consolidate or effect a share exchange with, any other Entity;
(1) waive any of its material rights or claims, provided that it
may negotiate and adjust bills in the course of good faith disputes with
customers in a manner consistent with past practice, but such
adjustments will not be deemed to be included in Section 4.17 of the
Disclosure Statement unless specifically listed in the Supplemental
Information;
45
(m) commit a material breach of or amend materially or terminate
any Material Agreement of the Company or any of its Governmental
Approvals; or
(n) enter into any other transaction (i) outside the ordinary
course of its business and consistent with its past practice or (ii)
prohibited hereby.
Section 6.05. NO SHOP: RELEASE OF DIRECTORS.
(a) Each of the Company and the Stockholders agrees that, from
the date of this Agreement until the Effective Time, neither the Company
nor any Stockholder, nor any of their respective officers and directors
shall, and the Company and each Stockholder will direct and use their
best efforts to cause each of their respective Representatives not to,
initiate, solicit or encourage, directly or indirectly, any inquiries or
the making or implementation of any proposal or offer (including any
proposal or offer to the Stockholders) with respect to a merger,
acquisition, consolidation or similar transaction involving, or any
purchase of all or any significant portion of the assets or any equity
securities of, the Company (any such proposal or offer being herein
called an "ACQUISITION PROPOSAL") or engage in any activities,
discussions or negotiations concerning, or provide any Confidential
Information respecting, the Company, any Other Founding Company or OEI
to, or have any discussions with, any Person relating to an Acquisition
Proposal, or otherwise facilitate any effort or attempt to make or
implement an Acquisition Proposal. The Company and each Stockholder
will: (i) immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any Persons previously
conducted with respect to any of the foregoing, and each will take the
steps necessary to inform the Persons referred to in the first sentence
of this Section 6.05(a) of the obligations undertaken in this Section
6.05(a); and (ii) notify OEI immediately if any such inquiries or
proposals are received by, any such information is requested from or any
such discussions or negotiations are sought to be initiated or continued
with the Company or any Stockholder.
(b) Each of the Company and the Stockholders hereby (i) waives
every right, if any, the Governmental Requirements of the Company's
Organization State afford the Company or Stockholders to require the
Company's directors (or their equivalents if the Company is not a
corporation), in the exercise of their fiduciary duties in their
capacity as such, to engage in any of the activities prohibited by this
Section 6.05 and (ii) releases each such person from any and all
liability he might otherwise have to the Company or any Stockholders but
for this release.
Section 6.06. NOTIFICATION OF CERTAIN MATTERS. The Stockholders and the
Company shall give prompt notice to OEI of (a) the existence or occurrence of
each condition or state of facts which becomes known to them and which will or
reasonably could be expected to cause any representation or warranty of the
Company or any Stockholder contained herein to be untrue or incorrect in any
material respect at or prior to the Closing or on the IPO Closing Date and (b)
any material failure of any Stockholder or the Company to comply with or satisfy
any covenant, condition or agreement
46
to be complied with or satisfied by that Person hereunder. OEI shall give prompt
notice to the Company of (a) the existence or occurrence of each condition or
state of facts which will or reasonably could be expected to cause any
representation or warranty of OEI or Newco contained herein to be untrue or
inaccurate at or prior to the Closing or on the IPO Closing Date and (b) any
material failure of OEI or Newco to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder. The
delivery of any notice pursuant to this Section 6.06 shall not be deemed to (a)
modify the representations or warranties herein of the party delivering that
notice, or any other party, which modification may be made only pursuant to
Section 6.07, (b) modify the conditions set forth in Article VII or (c) limit or
otherwise adversely affect the remedies available hereunder to the party
receiving that notice.
Section 6.07. SUPPLEMENTAL INFORMATION. Each of the Company and the
Stockholders agrees that, with respect to its representations and warranties
contained in this Agreement, it will have the continuing obligation until the
Closing to provide OEI promptly with such additional supplemental Information
(collectively, the "SUPPLEMENTAL INFORMATION"), in the form of (a) amendments to
then existing Schedules or Sections of the Disclosure Statement or (b)
additional Schedules or Sections of the Disclosure Statement, as would be
necessary, in the light of the circumstances, conditions, events and states of
facts then known to the Company or any Stockholder, to make each of those
representations and warranties true and correct in all material respects as of
the Closing and on the IPO Closing Date. For purposes only of determining
whether the conditions to the obligations of OEI and Newco which are specified
in Sections 7.04(a)(ii)(A) and 7.04(b)(ii) have been satisfied, and not for any
purpose under Article IX, the Schedules and the Disclosure Statement as of the
Closing and on the IPO Closing Date shall be deemed to be the Schedules and the
Disclosure Statement as of the date hereof as amended or supplemented by the
Supplemental Information provided to OEI prior to the Closing pursuant to this
Section 6.07; PROVIDED, HOWEVER, that if the Supplemental Information so
provided discloses the existence of circumstances, conditions, events or states
of facts which, in any combination thereof, (a) have had a Material Adverse
Effect on the Company which was not reflected in the determination of the Merger
Consideration or (b) in the judgment of OEI (which shall be conclusive for
purposes of this Section 6.07 and Article XII, but not for any purpose of
Article IX), are having or will have a Material Adverse Effect on the Company or
the Surviving Corporation, as the case may be, OEI will be entitled either (i)
to terminate this Agreement pursuant to Section 12.01(a)(iv) or (ii) to treat as
OEI Indemnified Losses for all purposes of Article IX (which treatment will not
prejudice the right of any Stockholder under Article IX to contest Damage Claims
made by OEI in respect of those OEI Indemnified Losses) all Damages to the
Company or the Surviving Corporation which are attributable to the
circumstances, conditions, events and states of facts first disclosed herein
after the date hereof in the Supplemental Information; and PROVIDED FURTHER,
HOWEVER, that if the circumstances, conditions, events or states of facts
disclosed in the Supplemental Information and having or judged to have in the
future such a Material Adverse Effect (A) have not resulted from a breach by the
Company or the Stockholders of any of their covenants set forth in Article VI or
elsewhere in this Agreement and (B) do not indicate that any representation or
warranty of the Stockholders and the Company made in Articles III and IV shall
have been untrue or inaccurate at the date of this Agreement, then OEI shall
only be entitled to terminate this Agreement pursuant to Section 12.01(a)(iv),
and shall not be entitled to
47
treat as OEI Indemnified Losses any such Damages to the Company or the Surviving
Corporation. OEI will provide the Company with copies of the Registration
Statement, including all pre-effective amendments thereto, promptly after the
filing thereof with the SEC under the Securities Act.
Section 6.08. COOPERATION IN CONNECTION WITH THE IPO. The Company and
the Stockholders will (a) provide OEI and the Underwriter with all the
Information concerning the Company or any of the Stockholders which is
reasonably requested by OEI and the Underwriter from time to time in connection
with effecting the IPO and (b) cooperate with OEI and the Underwriter and their
respective Representatives in the preparation and amendment of the Registration
Statement (including the Financial Statements) and in responding to the comments
of the SEC staff, if any, with respect thereto. The Company and each Stockholder
agree promptly to (a) advise OEI if, at any time during the period in which a
prospectus relating to the IPO is required to be delivered under the Securities
Act, any information contained in the then current Registration Statement
prospectus concerning the Company, any Company Subsidiary or the Stockholders
becomes incorrect or incomplete in any material respect and (b) provide OEI with
the information needed to correct or complete that information.
Section 6.09. ADDITIONAL FINANCIAL STATEMENTS. The Company will furnish
to OEI:
(a) as soon as available and in any event within 30 days after
the end of each of the Company's fiscal quarters which ends prior to the
IPO Pricing Date, an unaudited consolidated balance sheet of the Company
and the Company Subsidiaries as of the end of that fiscal quarter and
the related consolidated statements of income or operations, cash flows
and stockholders' or other owners' equity for that fiscal quarter and
for the period of the Company's fiscal year ended with that quarter, in
each case (i) setting forth in comparative form the figures for the
corresponding portion of the Company's previous fiscal year and (ii)
prepared in accordance with GAAP applied on basis consistent throughout
the periods indicated (excepting footnotes) and consistent with the
basis on which the Initial Financial Statements including the Current
Balance Sheet were prepared; and
(b) if requested by OEI in connection with any amendment of the
Registration Statement and promptly following any such request, such
summary consolidated operating or other financial information of the
Company and the Company Subsidiaries as of the end of either the first
or second fiscal month in any of the Company's fiscal quarters as OEI
may request.
Section 6.10. TERMINATION OF PLANS. If requested by OEI, the Company
will, or will cause the applicable Company Subsidiary to, if permitted by all
applicable Governmental Requirements to do so, terminate each Plan identified in
Section 4.26(c) or (d) of the Disclosure Statement as a "Plan To Be Terminated"
at, or if agreed by the Company, prior to, the Effective Time.
Section 6.11. DISPOSITION OF UNWANTED ASSETS. At or prior to the
Closing, the Company will make all arrangements and take all such actions as are
necessary and satisfactory to OEI to dispose,
48
prior to the Effective Time, of those assets of it or of one or more of the
Company Subsidiaries which are listed in, and which shall be disposed of as
provided in, Schedule 6.11.
Section 6.12. HSR ACT MATTERS. If OEI shall determine that filings under
the HSR Act are necessary or appropriate in connection with the effectuation of
the Merger or the consummation of the acquisitions contemplated by the Other
Agreements, and advises the Company in writing of that determination, the
Company promptly will compile and file or provide to OEI for filing under the
HSR Act such information respecting it as the HSR Act requires of an Entity to
be acquired, and the expiration or termination of the applicable waiting period
and any extension thereof under the HSR Act shall be deemed a condition
precedent set forth in Section 7.02(b). All filing fees associated with filings
under the HSR Act shall be paid by OEI.
49
ARTICLE VII
THE CLOSING AND CONDITIONS TO CLOSING AND CONSUMMATION
Section 7.02. CONDITIONS TO THE OBLIGATIONS OF EACH PARTY.
(a) The obligation of each Party to take the actions contemplated
to be taken by that Party at the Closing is subject to the satisfaction
of each of the following conditions on or before the date of the
Closing:
(i) NO LITIGATION. No Litigation shall be pending on the
date of the Closing to restrain, prohibit or otherwise interfere
with, or to obtain material damages or other relief from OEI or
the Surviving Corporation in connection with, the consummation of
the Merger or the IPO;
(ii) GOVERNMENTAL APPROVALS. All Governmental Approvals
(other than the acceptance for filing of the Certificate of
Merger) required to be obtained by any of the Company, OEI and
Newco in connection with the consummation of the Merger and the
IPO shall have been obtained; and
(iii) THE REGISTRATION STATEMENT. (A) The Registration
Statement, as amended to cover the offering, issuance and sale by
OEI of such number of shares of OEI Common Stock at the IPO Price
(which need not be set forth in the Registration Statement when
it becomes effective under the Securities Act) as shall yield
aggregate cash proceeds to OEI (net of the Underwriter's discount
or commissions) in at least the amount (the "MINIMUM CASH
AMOUNT") sufficient when added to the funds, if any, available
from other sources (the "OTHER FINANCING SOURCES"), if any, and
as set forth in the Registration Statement when it becomes
effective under the Securities Act to enable OEI to pay or
otherwise deliver on the IPO Closing Date (1) the total cash
portion of the Merger Consideration then to be delivered pursuant
to Section 2.04, (2) the total cash portion of the merger or
other acquisition consideration then to be delivered pursuant to
the Other Agreements as a result of the consummation of the
mergers or other acquisition transactions contemplated thereby,
and (3) the total amount of Indebtedness of the Founding
Companies and OEI which the Registration Statement discloses at
the time it becomes effective under the Securities Act will be
repaid on the IPO Closing Date with proceeds received by OEI from
the IPO and the Other Financing Sources, shall have been declared
effective under the Securities Act by the SEC; (B) no stop order
suspending the effectiveness of the Registration Statement shall
have been issued by the SEC, and the SEC shall not have initiated
or threatened to initiate Litigation for that purpose; (C) the
Underwriter shall have agreed in writing (the "UNDERWRITING
AGREEMENT," which term includes the related pricing agreement, if
any) to purchase from OEI on a firm commitment basis for resale
to the public initially at the IPO
50
Price, subject to the conditions set forth in the Underwriting
Agreement, such number of shares of OEI Common Stock covered by
the Registration Statement as, when multiplied by the price per
share of OEI Common Stock to be paid by the Underwriter to OEI
pursuant to the Underwriting Agreement, shall equal at least the
Minimum Cash Amount; and (D) neither the Registration Statement
nor the Final Prospectus shall contain any untrue statement of a
material fact or omit to state any material fact necessary in
order to make the statements made therein, in the light of the
circumstances under which those statements are made, not
misleading.
(b) The obligation of each Party hereto with respect to the
actions to be taken on the IPO Closing Date is subject to the
satisfaction on that date of each of the following conditions:
(i) NO LITIGATION. No Litigation shall be pending on the
IPO Closing Date to restrain, prohibit or otherwise interfere
with, or to obtain material damages or other relief from OEI or
the Surviving Corporation in connection with, the consummation of
the Merger or the IPO;
(ii) GOVERNMENTAL APPROVALS. All Governmental Approvals
required to be obtained by the Company, OEI and Newco in
connection with the consummation of the Merger and the IPO shall
have been obtained;
(iii) RECEIPT OF CERTAIN CERTIFICATES. Each party to the
Transferors' Agreement or his Representative shall have received
the certificates that such party is entitled to receive on the
IPO Closing Date pursuant to Section 3.5 of the Transferors'
Agreement;
(iv) REGISTRATION STATEMENT AND FINAL PROSPECTUS. Neither
the Registration Statement, in its form at the Effective Time,
nor the Final Prospectus shall contain any untrue statement of a
material fact or omit to state any material fact necessary in
order to make the statements made therein, in the light of the
circumstances under which those statements are made, not
misleading; and
(vi) CLOSING OF THE IPO. (A) OEI shall have issued and
sold shares of OEI Common Stock to the Underwriter in accordance
with the Underwriting Agreement for initial resale at the IPO
Price and received payment therefor in an amount at least equal
to the amount by which (1) the Minimum Cash Amount exceeds (2)
the aggregate amount of funds actually received on the IPO
Closing Date, if any, from any one or more of the Other Financing
Sources and (B) the IPO Price shall have been at least $9.60.
Section 7.03. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY AND THE
STOCKHOLDERS. The obligations of the Company and each Stockholder with respect
to actions to be taken by them at or
51
before the Closing and the actions to be taken on the IPO Closing Date are
subject to the satisfaction, or the written waiver by the Company on behalf of
itself and each Stockholder pursuant to Section 11.05 on or before the date of
the Closing of, in addition to the conditions specified in Section 7.02 (a) or
7.02 (b), as applicable, (i) all the conditions set forth in Section 7.01 (b),
if any, and (ii) all the following conditions:
(A) REPRESENTATIONS AND WARRANTIES. All the
representations and warranties of OEI and Newco in Article V
shall be true and correct in all material respects as of the
Closing as though made at that time;
(B) DELIVERY OF DOCUMENTS. OEI shall have delivered to the
Company, with copies for each Stockholder:
(1) an OEI officer's certificate respecting the
representations and warranties of OEI and Newco in Article
V and compliance with the covenants of OEI and Newco in
Article VI and in the form thereof attached as an exhibit
to the Closing Memorandum;
(2) opinions dated the IPO Closing Date and
addressed to the Company and the Stockholders from Counsel
for OEI and Newco substantially in the forms thereof
attached as exhibits to the Closing Memorandum, upon which
the Underwriters and their counsel are authorized to rely;
(3) a certificate of the secretary or any assistant
secretary of OEI in the form thereof (without attachments
thereto) attached as an exhibit to the Closing Memorandum
and respecting, and to which there shall be attached, (a)
the Charter Documents of OEI and Newco (certified by the
Secretary of State of the State of Delaware in the case of
the certificates of incorporation of OEI included
therein); (b) the resolutions of the boards of directors
of OEI and Newco respecting the Transaction Documents and
the transactions contemplated thereby; (c) a certificate
respecting the incumbency and true signatures of the OEI
and Newco officers who execute the Transaction Documents
on behalf of OEI and Newco, respectively; (d) a specimen
certificate evidencing shares of OEI Common Stock; (e) the
prospectus included in the Registration Statement when it
became effective; and (f) a facsimile copy of the
Underwriting Agreement as executed and delivered by OEI
and the Underwriter;
(4) the Registration Rights Agreement duly executed
and delivered by OEI; and
52
(5) a certificate, dated as of a Current Date, duly
issued by the Secretary of State of the State of Delaware,
showing OEI to be in good standing and authorized to do
business in that State.
Section 7.04. CONDITIONS TO THE OBLIGATIONS OF OEI AND NEWCO.
(a) The obligations of OEI and Newco with respect to actions to
be taken by them at or before the Closing are subject to the
satisfaction on or before the date of the Closing of, in addition to the
conditions specified in Section 7.02 (a), (i) all the conditions set
forth in Section 7.01(c), if any, and (ii) all the following conditions:
(A) REPRESENTATIONS AND WARRANTIES. All the
representations and warranties of the Stockholders and the
Company in Articles III and IV shall be true and correct in all
material respects as of the Closing as though made at that time;
(B) DELIVERY OF DOCUMENTS. The Stockholders and the
Company shall have delivered to OEI:
(1) a Company officer's certificate, signed by a
Responsible Officer, respecting the representations and
warranties of the Stockholders and the Company in Articles
III and IV and compliance with the covenants of the
Stockholders and the Company in Article VI and in the form
thereof attached as an exhibit to the Closing Memorandum;
(2) opinions dated the IPO Closing Date and
addressed to OEI and the Underwriters, respectively, from
Counsel for the Company and the Stockholders substantially
in the form thereof attached as exhibits to the Closing
Memorandum;
(3) a certificate of the secretary or any assistant
secretary of the Company in the form thereof (without
attachments thereto) attached as an exhibit to the Closing
Memorandum and respecting, and to which is attached, (a)
the Charter Documents of the Company; (b) the resolutions
of the board of directors of the Company respecting the
Transaction Documents and the transactions contemplated
thereby; and (c) a certificate respecting the incumbency
and true signatures of the Responsible Officers who
execute the Transaction Documents on behalf of the
Company;
(4) from each Stockholder, a General Release duly
executed and delivered by that Stockholder;
(5) from each Stockholder, an executed Form W-9 or
Form W-8, as the case may be, and in the event any
Stockholder is not a U.S. citizen or
53
resident for U.S. tax purposes, from the Company, a
properly executed statement in form and substance
reasonably acceptable to OEI for purposes of satisfying
OEI's obligation under Treasury regulations Section
1.1445-2(c)(3) promulgated under the Code; and
(6) for each of the Company and the Company
Subsidiaries, a certificate, dated as of a Current Date,
duly issued by the appropriate Governmental Authorities in
its Organization State and, unless waived by OEI, in each
other jurisdiction listed for it in Section 4.02 of the
Disclosure Statement, showing it to be in existence, good
standing (or otherwise in tax compliance) and authorized
to do business in its Organization State and those other
jurisdictions and that all state franchise and/or income
tax returns and taxes due by it in its Organization State
and those other jurisdictions for all periods prior to the
Closing have been filed and paid.
(b) The obligations of OEI and Newco with respect to the actions
to be taken on the IPO Closing Date are subject to the satisfaction on
that date of (i) all the conditions set forth in Section 7.01(d), if
any, and (ii) the condition that all the representations and warranties
of the Stockholders and the Company in Articles III and IV shall be true
and correct in all material respects as of the IPO Closing Date as
though made on that date.
54
ARTICLE VIII
COVENANTS FOLLOWING THE EFFECTIVE TIME
Section 8.02. DISCLOSURE. If, subsequent to the IPO Pricing Date and
prior to the 25th day after the date of the Final Prospectus, any Stockholder
becomes aware of any fact or circumstance which would change (or, if after the
Effective Time, would have changed) a representation or warranty of the Company
or any Stockholder in this Agreement or would affect any document delivered
pursuant hereto in any material respect that Stockholder will promptly give
notice of that fact or circumstance to OEI.
Section 8.03. PREPARATION AND FILING OF TAX RETURNS. Each party hereto
will, and will cause its Affiliates to, provide to each of the other parties
hereto such cooperation and information as any of them reasonably may request in
filing any Return, amended Return or claim for refund, determining a liability
for Taxes or a right to refund of Taxes or in conducting any audit or other
proceeding in respect of Taxes. This cooperation and information shall include
providing copies of all relevant portions of the relevant Returns, together with
such accompanying schedules and work papers, documents relating to rulings or
other determinations by Taxing Authorities and records concerning the ownership
and Tax bases of property as are relevant which a party possesses. Each party
will make its employees, if any, reasonably available on a mutually convenient
basis at its cost to provide an explanation of any documents or information so
provided. Subject to the preceding sentence, each party required to file Returns
pursuant to this Agreement shall bear all costs attributable to the preparation
and filing of those Returns.
Section 8.04. DIRECTORS. OEI will cause such corporate proceedings as on
its part will be necessary to cause each of the persons, if any, who are named
in the Final Prospectus as persons who will become members of the board of
directors of OEI following the Effective Time to be appointed to the board when
the prospectus so provides.
Section 8.05. REMOVAL OF GUARANTIES. Within ten days following the
Effective Time, OEI will cause the Stockholder Guaranties listed in Schedule
8.05 to be terminated.
55
ARTICLE IX
INDEMNIFICATION
Section 9.02. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All the
provisions of this Agreement will survive the Closing and the Effective Time
notwithstanding any investigation at any time made by or on behalf of any party
hereto or the provision of any Supplemental Information pursuant to Section
6.07, provided that the representations and warranties set forth in Articles IV,
V and VI and in any certificate delivered in connection herewith with respect to
any of those representations and warranties will terminate and expire two years
after the IPO Closing Date, except as follows: (a) the representations and
warranties of the Stockholders which relate expressly or by necessary
implication to Taxes or ERISA will survive until the expiration of the
applicable statutes of limitations (including all periods of extension and
tolling); (b) the representations and warranties of the Stockholders which
relate expressly or by necessary implication to the environment or Environmental
Laws will survive for a period of three years form the Effective Time; and (c)
the representations and warranties of OEI and the Company will terminate and
expire at the Effective Time. After a representation and warranty has terminated
and expired, no claim for indemnification will or may be sought on the basis of
that representation and warranty by any Person who would have been entitled
pursuant to this Article IX to indemnification on the basis of that
representation and warranty prior to its termination and expiration, provided
that, in the case of each representation and warranty that will terminate and
expire as provided in this Section 9.02, no claim presented in writing for
indemnification pursuant to this Article IX on the basis of that representation
and warranty prior to its termination and expiration will be affected in any way
by the termination and expiration.
Section 9.03. INDEMNIFICATION OF OEI INDEMNIFIED PARTIES.
(a) Subject to the applicable provisions of Sections 9.02 and
9.07, the Stockholders covenant and agree that they, jointly and
severally, will indemnify, protect and hold harmless each OEI
Indemnified Party, and, solely with respect to clause (iii) of this
Section 9.03(a), the Underwriters from and after the Effective Time,
from and against all Damages that arise from, are based on or relate or
otherwise are attributable to (i) any breach of the representations and
warranties of the Stockholders or the Company set forth herein (other
than in Article III) or in certificates delivered in connection herewith
(other than in respect of certificates relating only to the
representations and warranties in Article III), (ii) any nonfulfillment
of any covenant or agreement on the part of the Stockholders or the
Company under this Agreement, (iii) any liability under the Securities
Act, the Exchange Act or other applicable Governmental Requirement which
arises out of or is based on (A) any untrue statement of a material fact
relating to the Company and the Company Subsidiaries, or any of them,
which is (1) provided to OEI or its counsel, or the Underwriters and
their counsel, by the Company or the Stockholders and (2) contained in
any preliminary prospectus relating to the IPO, the Registration
Statement or any prospectus forming a part thereof, or any amendment
thereof or supplement thereto, or (B) any omission or alleged
56
omission to state therein a material fact relating to the Company and
the Company Subsidiaries, or any of them, required to be stated therein
or necessary to make the statements made therein, in the light of the
circumstances under which they were made, not misleading, and which is
not provided to OEI or its counsel by the Company or the Stockholders
(each such Damage Claim and each Damage Claim described in Section
9.03(b) being an "OEI INDEMNIFIED LOSS").
(b) Each Stockholder, severally and not jointly with any other
Person, covenants and agrees that he will indemnify, protect and hold
harmless each OEI Indemnified Party, and, solely with respect to clause
(iii) of this Section 9.03(a), the Underwriters from and after the
Effective Time, from and against, and hold each OEI Indemnified Party
harmless from and in respect of, all Damage Claims that arise from, are
based on or relate or otherwise are attributable to (i) any breach of
the representations and warranties of that Stockholder solely as to that
Stockholder set forth in Article III or in certificates delivered by
that Stockholder and relating to those representations and warranties,
(ii) any nonfulfillment of any several, and not joint and several,
agreement on the part of that Stockholder under this Agreement or (iii)
any liability under the Securities Act, the Exchange Act or other
applicable Governmental Requirement which arises out of or is based on
(A) any untrue statement or alleged untrue statement of a material fact
relating solely to that Stockholder which is (1) provided to OEI or its
counsel, or the Underwriters and their counsel, by that Stockholder and
(2) contained in any preliminary prospectus relating to the IPO, the
Registration Statement or any prospectus forming a part thereof, or any
amendment thereof or supplement thereto, or (B) any omission or alleged
omission to state therein a material fact relating solely to that
Stockholder required to be stated therein or necessary to make the
statements made therein, in the light of the circumstances under which
they were made, not misleading, and which is not provided to OEI or its
counsel, or the Underwriters and their counsel, by that Stockholder.
(c) Notwithstanding anything to the contrary contained herein,
the amount of any Damages sustained by any Indemnified Party shall be
determined only after giving credit for the amount of the net monetary
benefit received by such Indemnified Party from any insurance carrier
with respect to any policy of insurance (not including any amounts the
Indemnified Party is required to pay with respect to deductibles or to
reimburse to such insurer), resulting from or attributable to, the
event, occurrence, state of facts, actions or other circumstance causing
or giving rise to such Damages.
(d) The Underwriters shall be deemed third party beneficiaries of
the indemnification obligations of the Stockholders set forth in
paragraphs (a) and (b) of this Section 9.03, with respect to the matters
specified therein as to which they are to be indemnified. The
Stockholders agree to execute such documents as the Underwriters may
reasonably request to confirm the Stockholders' indemnification
obligations to the Underwriters.
57
Section 9.04. INDEMNIFICATION OF STOCKHOLDER INDEMNIFIED PARTIES. OEI
covenants and agrees that it will indemnify each Stockholder Indemnified Party
against, and hold each Stockholder Indemnified Party harmless from and in
respect of, all Damage Claims (that arise from, are based on or relate or
otherwise are attributable to (i) any breach by OEI or Newco of their
representations and warranties set forth herein or in their certificates
delivered to the Company or the Stockholders in connection herewith, (ii) any
nonfulfillment of any covenant or agreement on the part of OEI or Newco under
this Agreement (each such Damage Claim being a "STOCKHOLDER INDEMNIFIED LOSS");
or (iii) any liability under the Securities Act, the Exchange Act or other
applicable Governmental Requirement which arises out of or is based on (A) any
untrue statement or alleged untrue statement of a material fact relating to OEI,
Newco or any of the Other Founding Companies contained in any preliminary
prospectus relating to the IPO, the Registration Statement or any prospectus
forming a part thereof, or any amendment thereof or supplement thereto, or (B)
any omission or alleged omission to state therein a material fact relating to
OEI, Newco or any of the Other Founding Companies, or any of them, required to
be stated therein or necessary to make the statements made therein, in the light
of the circumstances under which they were made, not misleading.
Section 9.05. CONDITIONS OF INDEMNIFICATION.
(a) All claims for indemnification under this Agreement shall be
asserted and resolved as provided in this Section 9.05.
(b) A party claiming indemnification under this Agreement (an
"INDEMNIFIED PARTY") shall promptly (i) notify the party from whom
indemnification is sought (the "INDEMNIFYING PARTY") of any third-party
claim or claims asserted against the Indemnified Party ("Third Party
Claim") that could give rise to a right of indemnification under this
Agreement and (ii) transmit to the Indemnifying Party a written notice
("CLAIM NOTICE") describing in reasonable detail the nature of the Third
Party Claim, a copy of all papers served with respect to the claim (if
any), an estimate of the amount of damages attributable to the Third
Party Claim to the extent feasible (which estimate shall not be
conclusive of the final amount of the claim) and the basis for the
Indemnified Party's request for indemnification under this Agreement.
Except as set forth in Section 9.02, the failure to promptly deliver a
Claim Notice shall not relieve the Indemnifying Party of its obligations
to the Indemnified Party with respect to the related Third Party Claim
except to the extent that the resulting delay is materially prejudicial
to the defense of the claim. Within 15 days after receipt of any Claim
Notice (the "ELECTION PERIOD"), the Indemnifying Party shall notify the
Indemnified Party (i) whether the Indemnifying Party disputes its
potential liability to the Indemnified Party under this Article IX with
respect to the Third Party Claim and (ii) if the Indemnifying Party does
not dispute its potential liability to the Indemnified Party with
respect to the Third Party Claim, whether the Indemnifying Party
desires, at the sole cost and expense of the Indemnifying Party, to
defend the Indemnified Party against the Third Party Claim.
58
(c) If the Indemnifying Party does not dispute its potential
liability to the Indemnified Party and notifies the Indemnified Party
within the Election Period that the Indemnifying Party elects to assume
the defense of the Third Party Claim, then the Indemnifying Party shall
have the right to defend, at its sole cost and expense, the Third Party
Claim by all appropriate proceedings, which proceedings shall be
prosecuted diligently by the Indemnifying Party to a final conclusion or
settled at the discretion of the Indemnifying Party in accordance with
this Section 9.05(c) and the Indemnified Party will furnish the
Indemnifying Party with all information in its possession with respect
to the Third Party Claim and otherwise cooperate with the Indemnifying
Party in the defense of the Third Party Claim; PROVIDED, HOWEVER, that
the Indemnifying Party shall not enter into any settlement with respect
to any Third Party Claim that purports to limit the activities of, or
otherwise restrict in any way, any Indemnified Party or any Affiliate of
any Indemnified Party without the prior consent of that Indemnified
Party (which consent may be withheld in the sole discretion of that
Indemnified Party). The Indemnified Party is hereby authorized, at the
sole cost and expense of the Indemnifying Party if found liable
hereunder, to file, during the Election Period, any motion, answer or
other pleadings that the Indemnified Party shall deem necessary or
appropriate to protect its interests or those of the Indemnifying Party.
The Indemnified Party may participate in, but not control, any defense
or settlement of any Third Party Claim controlled by the Indemnifying
Party pursuant to this Section 9.05(c) and will bear its own costs and
expenses with respect to its participation; PROVIDED, HOWEVER, that if
the named parties to any such action (including any impleaded parties)
include both the Indemnifying Party and the Indemnified Party, and the
Indemnified Party has been advised in writing by counsel that there may
be one or more legal defenses available to it which are different from
or additional to those available to the Indemnifying Party, then the
Indemnified Party may employ separate counsel at the expense of the
Indemnifying Party, and, on its written notification of that employment,
the Indemnifying Party shall not have the right to assume or continue
the defense of the action on behalf of the Indemnified Party.
(d) If the Indemnifying Party (i) within the Election Period (A)
disputes its potential liability to the Indemnified Party under this
Article IX, (B) elects not to defend the Indemnified Party pursuant to
Section 9.05(c) or (C) fails to notify the Indemnified Party that the
Indemnifying Party elects to defend the Indemnified Party pursuant to
Section 9.05(c) or (ii) elects to defend the Indemnified Party pursuant
to Section 9.05(c) but fails diligently and promptly to prosecute or
settle the Third Party Claim, then the Indemnified Party shall have the
right to defend, at the sole cost and expense of the Indemnifying Party
(if the Indemnified Party is entitled to indemnification hereunder), the
Third Party Claim by all appropriate proceedings, which proceedings
shall be promptly and vigorously prosecuted by the Indemnified Party to
a final conclusion or settled. The Indemnified Party shall have full
control of such defense and proceedings. Notwithstanding the foregoing,
if the Indemnifying Party has delivered a written notice to the
Indemnified Party to the effect that the Indemnifying Party disputes its
potential liability to the Indemnified Party under this Article IX and
if such dispute is resolved in favor of the Indemnifying Party, the
Indemnifying Party
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shall not be required to bear the costs and expenses of the Indemnified
Party's defense pursuant to this Section 9.05 or of the Indemnifying
Party's participation therein at the Indemnified Party's request, and
the Indemnified Party shall reimburse the Indemnifying Party in full for
all reasonable and appropriate costs and expenses of such litigation.
The Indemnifying Party may participate in, but not control, any defense
or settlement controlled by the Indemnified Party pursuant to this
Section 9.05(d), and the Indemnifying Party shall bear its own costs and
expenses with respect to such participation.
(e) If any Indemnified Party should have a claim against any
Indemnifying Party hereunder that does not involve a Third Party Claim,
the Indemnified Party shall transmit to the Indemnifying Party a written
notice (the "INDEMNITY NOTICE") describing in reasonable detail the
nature of the claim, an estimate of the amount of Damages attributable
to that claim to the extent feasible (which estimate shall not be
conclusive of the final amount of the claim) and the basis of the
Indemnified Party's request for indemnification under this Agreement. If
the Indemnifying Party does not notify the Indemnified Party within 30
days from its receipt of the Indemnity Notice that the Indemnifying
Party disputes the claim, the claim specified by the Indemnified Party
in the Indemnity Notice shall be deemed a liability of the Indemnifying
Party hereunder. If the Indemnifying Party has timely disputed the
claim, as provided above, the dispute shall be resolved by proceedings
in an appropriate court of competent jurisdiction if the parties do not
reach a settlement of such dispute within 60 days after the date of
delivery of the Indemnity Notice.
(f) Payments of all amounts owing by an Indemnifying Party
pursuant to this Article IX relating to a Third Party Claim shall be
made within 30 days after the latest of (i) the settlement of that Third
Party Claim, (ii) the expiration of the period for appeal of a final
adjudication of that Third Party Claim or (iii) the expiration of the
period for appeal of a final adjudication of the Indemnifying Party's
liability to the Indemnified Party under this Agreement. Payments of all
amounts owing by an Indemnifying Party pursuant to Section 9.05(e) shall
be made within 30 days after the later of (i) the expiration of the
60-day Indemnity Notice period or (ii) the expiration of the period for
appeal of a final adjudication of the Indemnifying Party's liability to
the Indemnified Party under this Agreement. If and after the aggregate
amount of all Damage Claims paid by a Stockholder under this Article IX
equals or exceeds the amount of cash included in the Merger
Consideration received by that Stockholder, then that Stockholder, in
payment and satisfaction of any remaining unsatisfied or subsequent
Damage Claims in respect of which that Stockholder may be required to
indemnify any OEI Indemnified Party, may transfer and surrender to the
Company such number of shares of OEI Common Stock included in the Merger
Consideration received by such Stockholder as shall equal (i) the amount
of all such remaining unsatisfied or subsequent Damage Claims divided by
(ii) $12 or, if at the time such Stockholder pays such remaining Damage
Claim such Stockholder is prohibited from selling shares of the OEI
Common Stock pursuant to Section 11.02, the greater of $12 or the
Current Market Price.
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Section 9.06. REMEDIES EXCLUSIVE. Except as otherwise expressly provided
in this Agreement, the remedies provided in this Article IX are the exclusive
remedies available to one party against the other, either at law or in equity,
in respect of any matter indemnified against in this Article IX.
Section 9.07. LIMITATIONS ON INDEMNIFICATION.
(a) Notwithstanding the provisions of Section 9.03(a), neither
the Company nor any of the Stockholders shall be required to indemnify
or hold harmless any of the OEI Indemnified Parties on account of any
OEI Indemnified Loss under Section 9.03(a) unless the liability of the
Company and the Stockholders in respect of that OEI Indemnified Loss,
when aggregated with the liability of the Company and the Stockholders
in respect of all OEI Indemnified Losses under Section 9.03 (a),
exceeds, and only to the extent the aggregate amount of all those OEI
Indemnified Losses does exceed, the Threshold Amount. In no event shall
(i) the aggregate joint and several liability of the Company and the
Stockholders under this Agreement, including Section 9.03(a), exceed the
Ceiling Amount or (ii) the aggregate liability of each Stockholder under
this Agreement, including Sections 9.03(a) and 9.03(b), exceed the
product of the Pro Rata Share of that Stockholder multiplied by the
Ceiling Amount.
(b) Notwithstanding the provisions of Section 9.04, OEI shall not
be required to indemnify or hold harmless any of the Stockholder
Indemnified Parties on account of any Stockholder Indemnified Loss
unless the liability of OEI in respect of that Stockholder Indemnified
Loss, when aggregated with the liability of OEI in respect of all
Stockholder Indemnified Losses, exceeds, and only to the extent the
aggregate amount of all those Stockholder Indemnified Losses does
exceed, the Threshold Amount. In no event shall OEI be liable under this
Agreement, including Section 9.04, for any amount in excess of the
Ceiling Amount.
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ARTICLE XI
GENERAL PROVISIONS
Section 11.01.TREATMENT OF CONFIDENTIAL INFORMATION.
(a) Each of the Company and the Stockholders, severally and not
jointly with any other Person, acknowledges that it has or may have had
in the past, currently has and in the future may have access to
Confidential Information of the Company and the Company Subsidiaries,
the Other Founding Companies and their Subsidiaries and OEI and its
Subsidiaries. Each of the Company and the Stockholders, severally and
not jointly with any other Person, agrees that it will keep confidential
all such Confidential Information furnished to it and, except with the
specific prior written consent of OEI will not disclose such
Confidential Information to any Person except (a) Representatives of
OEI, (b) its own Representatives, provided that these Representatives
(other than counsel) agree to the confidentiality provisions of this
Section 11.01; and provided, further, that Confidential Information
shall not include (i) such information which becomes known to the public
generally through no fault of any Stockholder, (ii) information required
to be disclosed by law or the order of any governmental authority under
color of law, provided, that prior to disclosing any information
pursuant to this clause (ii), each Stockholder shall, if possible, give
prior written notice thereof to OEI and provide OEI with the opportunity
to contest such disclosure, or (iii) the disclosing party reasonably
believes that such disclosure is required in connection with the defense
of a lawsuit against the disclosing party. In the event of a breach or
threatened breach by any Stockholder of the provisions of this Section
11.01 with respect to any Confidential Information, OEI shall be
entitled to an injunction restraining such Stockholder from disclosing,
in whole or in part, that Confidential Information. Nothing herein shall
be construed as prohibiting OEI from pursuing any other available remedy
for such breach or threatened breach, including the recovery of damages.
(b) Because of the difficulty of measuring economic losses as a
result of the breach of the foregoing covenants in Section 11.01(a), and
because of the immediate and irreparable damage that would be caused to
OEI for which it would have no other adequate remedy, each of the
Company and the Stockholders agrees that OEI may enforce the provisions
of Section 11.01(a) by injunctions and restraining orders against each
of them who breaches any of those provisions.
(c) The obligations of OEI set forth in Section 6.02(d) are
incorporated in this Section 11.01 by this reference.
(d) The obligations of the parties under this Section 11.01 shall
survive the termination of this Agreement.
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