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Exhibit 10.15
STOCK PURCHASE AGREEMENT
AMONG
ORIUS CORP.,
NATG HOLDINGS, LLC
AND
THE SHAREHOLDERS OF DAS-CO OF IDAHO, INC.,
AN IDAHO CORPORATION
FEBRUARY 20, 1999
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TABLE OF CONTENTS
1. DEFINITIONS................................................................................... 1
2. PURCHASE AND SALE TRANSACTION................................................................. 5
(a) BASIC TRANSACTION.................................................................... 5
(b) CONSIDERATION........................................................................ 6
(c) THE CLOSING.......................................................................... 6
(d) DELIVERIES AT CLOSING................................................................ 6
3. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS CONCERNING THE TRANSACTION................. 6
(a) AUTHORIZATION OF TRANSACTION......................................................... 6
(b) NONCONTRAVENTION..................................................................... 6
(c) BROKERS' FEES........................................................................ 6
(d) COMPANY SHARES....................................................................... 6
(e) DISCLOSURE........................................................................... 7
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER AND ORIUS CONCERNING THE
TRANSACTION.................................................................................. 7
(a) AUTHORIZATION OF TRANSACTION......................................................... 7
(b) NONCONTRAVENTION..................................................................... 7
(c) BROKERS' FEES........................................................................ 7
(d) DISCLOSURE........................................................................... 7
5. REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY......................................... 8
(a) ORGANIZATION, QUALIFICATION, AND CORPORATE POWER..................................... 8
(b) CAPITALIZATION....................................................................... 8
(c) NONCONTRAVENTION..................................................................... 8
(d) TITLE TO ASSETS...................................................................... 9
(e) SUBSIDIARIES......................................................................... 9
(f) FINANCIAL STATEMENTS................................................................. 9
(g) EVENTS SUBSEQUENT TO MOST RECENT FISCAL YEAR END..................................... 9
(h) UNDISCLOSED LIABILITIES.............................................................. 11
(i) LEGAL COMPLIANCE..................................................................... 11
(j) TAX MATTERS.......................................................................... 12
(k) REAL PROPERTY........................................................................ 13
(l) INTELLECTUAL PROPERTY................................................................ 13
(m) TANGIBLE ASSETS...................................................................... 15
(n) INVENTORY............................................................................ 15
(o) CONTRACTS............................................................................ 15
(p) NOTES AND ACCOUNTS RECEIVABLE........................................................ 15
(q) POWERS OF ATTORNEY................................................................... 15
(r) INSURANCE............................................................................ 16
(s) LITIGATION........................................................................... 16
(t) COMMITMENTS AND WARRANTIES........................................................... 16
(u) LIABILITY FOR SERVICES PERFORMED..................................................... 17
(v) EMPLOYEES............................................................................ 17
(w) EMPLOYEE BENEFITS.................................................................... 17
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(x) GUARANTIES........................................................................... 18
(y) ENVIRONMENTAL, HEALTH, AND SAFETY MATTERS............................................ 18
(z) CERTAIN BUSINESS RELATIONSHIPS WITH THE COMPANY...................................... 19
(aa) CUSTOMERS AND SUPPLIERS.............................................................. 20
6. REPRESENTATIONS AND WARRANTIES CONCERNING THE BUYER AND ORIUS................................. 20
(a) ORGANIZATION OF THE BUYER............................................................ 20
(b) ORGANIZATION OF ORIUS................................................................ 20
(c) CAPITALIZATION OF ORIUS.............................................................. 21
(d) TITLE TO ASSETS...................................................................... 21
(e) SUBSIDIARIES AND AFFILIATES.......................................................... 21
(f) FINANCIAL STATEMENTS................................................................. 21
(g) EVENTS SUBSEQUENT TO MOST RECENT NORTH AMERICAN PERIOD END........................... 21
(h) TAX MATTERS.......................................................................... 22
(i) INTELLECTUAL PROPERTY................................................................ 22
(j) INSURANCE............................................................................ 22
(k) LEGAL COMPLIANCE..................................................................... 22
(l) EMPLOYEE BENEFITS.................................................................... 22
(m) ENVIRONMENTAL, HEALTH, AND SAFETY MATTERS............................................ 24
(n) DISCLOSURE........................................................................... 25
7. PRE-CLOSING COVENANTS......................................................................... 25
(a) GENERAL.............................................................................. 25
(b) NOTICES AND CONSENTS................................................................. 25
(c) OPERATION OF BUSINESS................................................................ 25
(d) PRESERVATION OF BUSINESS............................................................. 25
(e) FULL ACCESS.......................................................................... 25
(f) NOTICE OF DEVELOPMENTS............................................................... 26
(g) EXCLUSIVITY.......................................................................... 26
(h) NO TERMINATION OF SHAREHOLDERS'S OBLIGATION BY SUBSEQUENT INCAPACITY................. 26
8. POST-CLOSING COVENANTS........................................................................ 26
(a) GENERAL.............................................................................. 26
(b) LITIGATION SUPPORT................................................................... 26
(c) TRANSITION........................................................................... 26
(d) INDEPENDENT ACCOUNTANTS.............................................................. 27
(e) TAX MATTERS.......................................................................... 27
(f) STOCK OPTIONS........................................................................ 27
(g) AUDITED FINANCIAL STATEMENTS......................................................... 27
(h) NON-DISPARAGEMENT.................................................................... 27
9. CONDITIONS TO OBLIGATION TO CLOSE............................................................. 27
(a) CONDITIONS TO OBLIGATION OF BUYER.................................................... 27
(b) CONDITIONS TO OBLIGATION OF THE SHAREHOLDERS......................................... 29
10. REMEDIES FOR BREACHES OF THIS AGREEMENT....................................................... 30
(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES........................................... 30
(b) INDEMNIFICATION PROVISIONS FOR BENEFIT OF BUYER...................................... 30
(c) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE SHAREHOLDERS........................... 31
(d) MATTERS INVOLVING THIRD PARTIES...................................................... 31
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(e) DETERMINATION OF ADVERSE CONSEQUENCES................................................ 32
(f) OTHER INDEMNIFICATION PROVISIONS..................................................... 32
11. TAX MATTERS................................................................................... 33
(a) TAX PERIODS ENDING ON OR BEFORE THE CLOSING DATE..................................... 33
(b) TAX PERIODS BEGINNING BEFORE AND ENDING AFTER THE CLOSING DATE....................... 33
(c) COOPERATION ON TAX MATTERS........................................................... 33
(d) TAX SHARING AGREEMENTS............................................................... 34
(e) TERMINATION OF S CORPORATION STATUS.................................................. 34
(f) CERTAIN TAXES........................................................................ 35
(g) SECTION 338(H)(10) ELECTION.......................................................... 35
(h) ALLOCATION OF PURCHASE PRICE......................................................... 35
(i) S CORPORATION STATUS................................................................. 35
(j) ESCROW............................................................................... 35
12. TERMINATION................................................................................... 36
(a) TERMINATION OF AGREEMENT............................................................. 36
(b) EFFECT OF TERMINATION................................................................ 36
13. MISCELLANEOUS................................................................................. 37
(a) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS.............................................. 37
(b) NO THIRD-PARTY BENEFICIARIES......................................................... 37
(c) ENTIRE AGREEMENT..................................................................... 37
(d) SUCCESSION AND ASSIGNMENT............................................................ 37
(e) COUNTERPARTS......................................................................... 37
(f) HEADINGS............................................................................. 37
(g) NOTICES.............................................................................. 37
(h) GOVERNING LAW........................................................................ 38
(i) AMENDMENTS AND WAIVERS............................................................... 38
(j) SEVERABILITY......................................................................... 38
(k) EXPENSES............................................................................. 38
(l) CONSTRUCTION......................................................................... 38
(m) INCORPORATION OF EXHIBITS, ANNEXES, AND SCHEDULES.................................... 39
(n) SPECIFIC PERFORMANCE................................................................. 39
(o) SUBMISSION TO JURISDICTION........................................................... 39
(p) WAIVER OF JURY TRIAL................................................................. 39
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Exhibit A.: Form of Employment Agreements
Exhibit B.: Form of Leases
Exhibit C.: Form of Non-Competition Agreement
Exhibit D.: Form of Escrow Agreement
Exhibit E.: Form of Patent License
Exhibit F.: Form of Seller's opinion
Exhibit G.: Form of Buyer's opinion
Exhibit H.: Financial Statements
Exhibit I.: North American Financial Statements
Exhibit J.: Allocation of Proceeds
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is entered into as of February 19, 1999
by and among NATG Holdings, LLC, a Delaware limited liability company (the
"Buyer"), Orius Corp., a Delaware corporation and the parent of Buyer ("Orius")
and the shareholders of DAS-CO of Idaho, Inc., an Idaho corporation (the
"Company") listed on the signature page to this Agreement (the "Shareholders").
The Buyer, Orius and the Shareholders are referred to collectively herein as
the "Parties."
The Shareholders in the aggregate own all of the outstanding capital
stock of the Company.
This Agreement contemplates the sale by the Shareholders of all of the
issued and outstanding capital stock of the Company to Buyer. The Shareholders
will receive cash in exchange for their shares of capital stock of the Company.
Simultaneously herewith, NATG Merger Sub, Inc., a Florida corporation
and a wholly-owned subsidiary of Buyer ("Merger Sub")and North American Tel-Com
Group, Inc., a Florida corporation ("North American"), are entering into a
merger agreement (the "Merger Agreement") pursuant to which Merger Sub will be
merged with and into North American. Buyer is also entering into stock exchange
agreements with the shareholders of Network Cabling Services, Inc. ("NCS"),
Copenhagen Utilities & Construction, Inc. ("CUC") and Xxxxxx Underground Cable,
Inc. ("Xxxxxx") to acquire all of the issued and outstanding capital stock of
NCS, CUC and Xxxxxx (collectively with this Agreement and the Merger Agreement,
the "Exchange Agreements").
Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows.
1. DEFINITIONS.
"Adverse Consequences" means all actions, suits, proceedings,
hearings, investigations, charges, complaints, claims, demands, injunctions,
judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs,
amounts paid in settlement, Liabilities, obligations, Taxes, liens, losses,
expenses, and fees, including court costs and reasonable attorneys' fees and
expenses, and any other cost of enforcing a party's rights under this
Agreement.
"Affiliate" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act.
"Affiliated Group" means any affiliated group within the
meaning of Code Section 1504(a) or any similar group defined under a similar
provision of state, local or foreign law.
"Applicable Rate" means the corporate base rate of interest
publicly announced from time to time by PNC Bank, N.A.
"Basis" means any past or present fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction that forms or could form the
basis for any specified consequence.
"Buyer" has the meaning set forth in the preface above.
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"Cash Distribution" has the meaning set forth in Section
Permitted Distributions of the Disclosure Schedule.
"Closing" has the meaning set forth in Section below.
"Closing Date" has the meaning set forth in Section below.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" has the meaning set forth in the preface above.
"Company Share" means any share of the voting or non-voting
Common Stock, $1.00 par value, of the Company.
"Consideration" has the meaning set forth in Section below.
"Controlled Group of Corporations" has the meaning set forth
in Code Section 1563.
"Disclosure Schedule" has the meaning set forth in Section
below.
"Employee Benefit Plan" means any (a) nonqualified deferred
compensation or retirement plan or arrangement which is an Employee Pension
Benefit Plan, (b) qualified defined contribution retirement plan or arrangement
which is an Employee Pension Benefit Plan, (c) qualified defined benefit
retirement plan or arrangement which is an Employee Pension Benefit Plan
(including any Multiemployer Plan), (d) Employee Welfare Benefit Plan or (e)
bonus, incentive, stock purchase, stock ownership, stock option, stock
appreciation right, severance, salary continuation, termination, change of
control or other material fringe benefit plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in
ERISA Section 3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in
ERISA Section 3(1).
"Employment Agreements" means the Employment Agreements
substantially in the form attached hereto as Exhibit .
"Environmental, Health, and Safety Requirements" shall mean
all federal, state, local and foreign statutes, regulations, ordinances and
other provisions having the force or effect of law, all judicial and
administrative orders and determinations, all contractual obligations and all
common law concerning public health and safety, worker health and safety, and
pollution or protection of the environment, including without limitation all
those relating to the presence, use, production, generation, handling,
transportation, treatment, storage, disposal, distribution, labeling, testing,
processing, discharge, release, threatened release, control, or cleanup of any
Hazardous Materials (which, for purposes of this Agreement, shall mean any
hazardous materials, substances or wastes, chemical substances or mixtures,
pesticides, pollutants, contaminants, toxic chemicals, petroleum products or
byproducts, asbestos, polychlorinated biphenyls, noise or radiation), each as
amended and as now or hereafter in effect.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" means (i) any corporation included with the
Company in a controlled group of corporations within the meaning of Section
414(b) of the Code; (ii) any trade or business (whether
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or not incorporated) which is under common control with the Company within the
meaning of Section 414(c) of the Code; (iii) any member of an affiliated
service group of which the Company is a member within the meaning of Section
414(m) of the Code; or (iv) any other person or entity treated as an affiliate
of the Company under Section 414(o) of the Code.
"Estimated Closing Balance Sheet" has the meaning given that
term in Section hereof.
"Excess Cash" has the meaning set forth in Section -Permitted
Distributions of the Disclosure Schedule.
"Excess Receivables" has the meaning set forth in Section
-Permitted Distributions of the Disclosure Schedule.
"Fiduciary" has the meaning set forth in ERISA Section 3(21).
"Financial Statement" has the meaning set forth in Section
below.
"GAAP" means United States generally accepted accounting
principles as in effect from time to time.
"Indemnified Party" has the meaning set forth in Section
below.
"Indemnifying Party" has the meaning set forth in Section
below.
"Intellectual Property" means (a) all inventions (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications, and patent
disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions, and reexaminations thereof, (b)
all trademarks, service marks, trade dress, logos, trade names, and corporate
names, together with all translations, adaptations, derivations, and
combinations thereof and including all goodwill associated therewith, and all
applications, registrations, and renewals in connection therewith, (c) all
copyrightable works, all copyrights, and all applications, registrations, and
renewals in connection therewith, (d) all mask works and all applications,
registrations, and renewals in connection therewith, (e) all trade secrets and
confidential business information (including ideas, research and development,
know-how, formulas, compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, specifications, customer and
supplier lists, pricing and cost information, and business and marketing plans
and proposals), (f) all computer software (including data and related
documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium).
"J. Dancer" means Xxxxx Dancer.
"Knowledge" means that which is known by a person and that of
which a person has constructive knowledge based upon information readily
available to that person in the performance of such person's duties after
reasonable investigation and inquiry of such person. In the case of Buyer,
"Knowledge" means the "Knowledge" of its manager. In the case of the Company,
"Knowledge" means the "Knowledge" of the Shareholders.
"Leases" means the five-year triple net lease agreements
between Buyer and the Shareholders (or their Affiliates) for the real property
utilized by the Company in Nampa, Twin Falls and Pocatello, Idaho substantially
in the forms attached hereto as Exhibit .
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"Liability" means any liability (whether known or unknown,
whether asserted or unasserted, whether absolute or contingent, whether accrued
or unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
"Material Adverse Effect" means, individually or together
with other adverse effects, any material adverse effect on the assets,
liabilities, results of operations, business condition (financial or otherwise)
or prospects of the Company or on the Company's ability to consummate the
transactions contemplated hereby or the ability of Buyer to operate the
business of the Company immediately after the Closing in substantially the same
manner as such business is conducted prior to Closing.
"Most Recent Balance Sheet" means the balance sheet contained
within the Most Recent Financial Statements.
"Most Recent Financial Statements" has the meaning set forth
in Section below.
"Most Recent Fiscal Period End" has the meaning set forth in
Section below.
"Most Recent Fiscal Year End" has the meaning set forth in
Section below.
"Multiemployer Plan" has the meaning set forth in ERISA
Section 3(37).
"N.Dancer" means Xxxxxx Dancer.
"National Securities Exchange" shall have the meaning
ascribed to that term in the rules and regulations promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934.
"Noncompetition Agreements" means the Noncompetition
Agreements substantially in the form attached hereto as Exhibit .
"Oldham" means Xxxxxxx Xxxxxx.
"Operating Cash" has the meaning set forth in Section
Permitted Distributions of the Disclosure Schedule.
"Operating Receivables" has the meaning set forth in Section
-Permitted Distributions of the Disclosure Schedule.
"Ordinary Course of Business" means the ordinary course of
business consistent with past custom and practice (including with respect to
quantity and frequency).
"Orius" has the meaning set forth in the preface above.
"Party" has the meaning set forth in the preface above.
"Patent License Agreement" means the patent license agreement
in substantially the form as attached as Exhibit hereto.
"PBGC" means the Pension Benefit Guaranty Corporation.
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"Person" means an individual, a partnership, a corporation,
an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, or a governmental entity (or any department,
agency, or political subdivision thereof).
"Prohibited Transaction" has the meaning set forth in ERISA
Section 406 and Code Section 4975.
"Reportable Event" has the meaning set forth in ERISA Section
4043.
"Section 338(h)(10) Election" has the meaning set forth in
Section below.
"Securities Act" means the Securities Act of 1933, as
amended.
"Securities Exchange Act" means the Securities Exchange Act
of 1934, as amended.
"Security Interest" means any mortgage, pledge, lien,
encumbrance, charge, or other security interest, other than (a) mechanic's,
materialmen's, and similar liens that could not reasonably be expected to have
a Material Adverse Effect, (b) liens for Taxes not yet due and payable or for
Taxes that the taxpayer is contesting in good faith through appropriate
proceedings disclosed on Section of the Disclosure Schedule, (c) purchase money
liens and liens securing rental payments under capital lease arrangements
disclosed in the Most Recent Financial Statements, and (d) other liens arising
in the Ordinary Course of Business and not incurred in connection with the
borrowing of money, so long as such liens could not reasonably be expected to
have a Material Adverse Effect.
"Shareholders" has the meaning set forth in the preface
above.
"Subsidiary" means any corporation with respect to which a
specified Person (or a Subsidiary thereof) owns a majority of the common stock
or has the power to vote or direct the voting of sufficient securities to elect
a majority of the directors.
"Tax" means any federal, state, local, or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under
Code Section 59A), customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax of any kind whatsoever,
including any interest, penalty, or addition thereto, whether disputed or not,
and any obligations under any agreements or arrangements with respect to any of
the foregoing.
"Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"Third Party Claim" has the meaning set forth in Section
below.
"Shareholders" has the meaning set forth in the preface
above.
2. PURCHASE AND SALE TRANSACTION.
(a) BASIC TRANSACTION. On and subject to the terms and
conditions of this Agreement, Buyer agrees to purchase from the Shareholders,
and the shareholders agree to sell to Buyer, all of their respective Company
Shares for the consideration specified below in this Section .
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(b) CONSIDERATION. Buyer agrees to deliver at Closing, to the
Shareholders, cash in the amount of $24,750,000.00 payable by wire transfer or
other immediately available funds. The Consideration shall be allocated as set
forth in Section of the Disclosure Schedule.
(c) THE CLOSING. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices of Holland &
Knight LLP in Ft. Lauderdale, Florida, commencing at 9:00 a.m. local time on
February 26, 1999 or such other date, time and place as the Parties may
mutually determine (the "Closing Date").
(d) DELIVERIES AT CLOSING. At the Closing, (i) the
Shareholders will deliver to Buyer the various certificates, instruments, and
documents referred to in Section below, (ii) Buyer will deliver to the
Shareholders the various certificates, instruments, and documents referred to
in Section below, (iii) the Shareholders will deliver to Buyer stock
certificates representing all of their Company Shares, endorsed in blank or
accompanied by duly executed assignment documents, and (iv) Buyer will deliver
to the Shareholders the Consideration specified in Section above.
3. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS CONCERNING THE
TRANSACTION. Each Shareholder represents and warrants to Buyer that the
statements contained in this Section are correct and complete as of the date of
this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date
of this Agreement throughout this Section ), except as set forth on Section of
the Disclosure Schedule (as hereinafter defined).
(a) AUTHORIZATION OF TRANSACTION. Such Shareholder has full
power and authority to execute and deliver this Agreement and to perform his
obligations hereunder. This Agreement constitutes the valid and legally binding
obligation of such Shareholder, enforceable in accordance with its terms and
conditions except to the extent enforcement thereof may be limited by
applicable bankruptcy, reorganization, insolvency or moratorium laws, or other
laws affecting the enforcement of creditors' rights or by the principles
governing the availability of equitable remedies. Such Shareholder need not
give any notice to, make any filing with, or obtain any authorization, consent,
or approval of any government or governmental agency or any other Person in
order to consummate the transactions contemplated by this Agreement.
(b) NONCONTRAVENTION. Neither the execution and the delivery
of this Agreement, nor the consummation of the transactions contemplated
hereby, will (A) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction of
any government, governmental agency, or court to which such Shareholder is
subject or (B) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
material agreement, contract, lease, license, instrument, or other arrangement
to which such Shareholder is a party or by which he is bound or to which any of
his assets is subject.
(c) BROKERS' FEES. Such Shareholder has, or prior to Closing
will have, paid any fees or commissions due from Shareholders to any broker,
finder, or agent with respect to the transactions contemplated by this
Agreement. Such Shareholder agrees that he will pay any additional amounts that
may become due from him or the Company to any such broker, finder or agent in
the future, including as a result of any indemnification obligations.
(d) COMPANY SHARES. Such Shareholder holds of record and owns
beneficially the number of Company Shares set forth opposite such Shareholder's
name, in Section of the Disclosure Schedule, free and clear of any restrictions
on transfer (other than any restrictions under the Securities
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Act and state securities laws), Taxes, Security Interests liens or other
encumbrances, options, warrants, purchase rights, contracts, commitments,
equities, claims, and demands. Such Shareholder is not a party to any option,
warrant, purchase right, or other contract or commitment that could require
such Shareholder to sell, transfer, or otherwise dispose of any capital stock
of the Company (other than this Agreement). Such Shareholder is not a party to
any voting trust, proxy, shareholders agreement, or other agreement or
understanding with respect to the voting of any capital stock of the Company.
(e) DISCLOSURE. Neither this Agreement nor any of the
exhibits, attachments, written statements, documents, certificates or other
items prepared for or supplied to Buyer by such Shareholder with respect to the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state any material fact necessary in order to make each
statement contained herein or therein not misleading. There is no fact which
such Shareholder has not disclosed to Buyer herein and of which the
Shareholders is aware which could be anticipated to have a Material Adverse
Effect.
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER AND ORIUS CONCERNING
THE TRANSACTION. The Buyer and Orius, jointly and severally, represent and
warrant to the Shareholders that the statements contained in this Section are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Section ),
except as set forth in the disclosure schedule delivered by the Buyer to the
Shareholders on the date hereof (the "Buyer Disclosure Schedule").
(a) AUTHORIZATION OF TRANSACTION. Each of the Buyer and Orius
has full power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. This Agreement constitutes the valid and
legally binding obligation of the Buyer and Orius, enforceable in accordance
with its terms and conditions except to the extent enforcement thereof may be
limited by applicable bankruptcy, reorganization, insolvency or moratorium
laws, or other laws affecting the enforcement of creditors' rights or by the
principles governing the availability of equitable remedies. Neither Buyer nor
Orius need not give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency or
any other Person in order to consummate the transactions contemplated by this
Agreement.
(b) NONCONTRAVENTION. Neither the execution and the delivery
of this Agreement, nor the consummation of the transactions contemplated
hereby, will (A) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction of
any government, governmental agency, or court to which the Buyer or Orius is
subject or any provision of their respective charter or bylaws or (B) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument, or other arrangement to which the Buyer or Orius is a
party or by which either of them is bound or to which any of the assets of
either of them is subject.
(c) BROKERS' FEES. The Buyer has, or prior to the Closing
will have, paid any fees or commissions due from the Buyer to any broker,
finder, or agent with respect to the transactions contemplated by this
Agreement. The Buyer agrees that it will pay any additional amounts that may
become due from the Buyer to any such broker, finder or agent in the future,
including as a result of any indemnification obligations.
(d) DISCLOSURE. Neither this Agreement nor any of the
exhibits, attachments, written statements, documents, certificates or other
items prepared for or supplied to the Shareholders by the Buyer or Orius with
respect to the transactions contemplated hereby contains any untrue statement
of a
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material fact or omits to state any material fact necessary in order to make
each statement contained herein or therein not misleading. There is no fact
which the Buyer or Orius has not disclosed to the Shareholders herein and of
which the Buyer or Orius or any of the their respective officers or directors
is aware and which could be anticipated to have a Material Adverse Effect on
the operations of the Buyer or Orius after the Closing.
5. REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY. The
Shareholders jointly and severally represent and warrant to Buyer that the
statements contained in this Section are correct and complete as of the date of
this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date
of this Agreement throughout this Section ), except as set forth in the
Disclosure Schedule delivered by the Shareholders to Buyer on the date hereof
and initialed by the Parties (the "Disclosure Schedule"). The Disclosure
Schedule shall be effective to modify only those representations and warranties
to which the Disclosure Schedule makes explicit reference. The Disclosure
Schedule will be arranged in paragraphs corresponding to the lettered and
numbered paragraphs contained in this Section .
(a) ORGANIZATION, QUALIFICATION, AND CORPORATE POWER. The
Company is a corporation duly organized, validly existing, and in good standing
under the laws of the jurisdiction of its incorporation. The Company is duly
authorized to conduct business and is in good standing under the laws of each
jurisdiction where such qualification is required. The Company has full
corporate power and authority and all licenses, permits, and authorizations
necessary to carry on the businesses in which it is engaged and in which it
presently proposes to engage and to own and use the properties owned and used
by it, except where failure to do so is authorized or will not result in any
Material Adverse Effect. Section of the Disclosure Schedule lists the directors
and officers of the Company. Correct and complete copies of the charter and
bylaws of the Company (as amended to date) are included as part of Section of
the Disclosure Schedule. The minute books (containing the records of meetings
of the stockholders, the board of directors, and any committees of the board of
directors), the stock certificate books, and the stock record books of the
Company are correct and complete and an true and correct copy thereof has been
provided to Buyer. The Company is not in default under or in violation of any
provision of its charter or bylaws.
(b) CAPITALIZATION. The entire authorized capital stock of
the Company consists of 10,000 shares of voting Company Shares and 90,000
non-voting Company Shares, of which 3,800 voting Company Shares and 34,200
non-voting Company Shares are issued and outstanding and none are held in
treasury. All of the issued and outstanding Company Shares have been duly
authorized, are validly issued, fully paid, and nonassessable, and are held of
record and owned beneficially by the Shareholders in the amounts set forth in
ss. of the Disclosure Schedule. There are no outstanding or authorized options,
warrants, purchase rights, subscription rights, conversion rights, exchange
rights, preemptive rights or other contracts or commitments that could require
the Company to issue, sell, or otherwise cause to become outstanding any of its
capital stock or securities convertible or exchangeable for, or any options,
warranties, or rights to purchase, any of such capital stock. There are no
outstanding obligations of the Company to repurchase, redeem or otherwise
acquire any capital stock or any securities convertible into or exchangeable
for such capital stock or any options, warrants or rights to purchase such
capital stock or securities. There are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights with
respect to the Company. There are no voting trusts, proxies, or other
agreements or understandings with respect to the voting, transfer, dividend or
other rights (such as registration rights under the Securities Act) of the
capital stock of the Company.
(c) NONCONTRAVENTION. Neither the execution and the delivery
of this Agreement, nor the consummation of the transactions contemplated
hereby, will: (i) violate any constitution, statute,
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regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which the
Company is subject or any provision of the charter or bylaws or similar
governance documents of the Company or; (ii) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which the Company is a party or by which it is bound or to which
any of its assets is subject (or result in the imposition of any Security
Interest upon any of its assets), which individually or in the aggregate would
constitute the Basis of a Material Adverse Effect on the Company. The Company
need not give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any Person, government or governmental agency in order
for the Parties to consummate the transactions contemplated by this Agreement.
(d) TITLE TO ASSETS. The Company has good and marketable
title to, or a valid leasehold interest in, the properties and assets used by
it, located on its premises, or shown on the Most Recent Balance Sheet or
acquired after the date thereof, free and clear of all Security Interests
(other than the Security Interests disclosed on the face of the Most Recent
Balance Sheet), except for properties and assets disposed of in the Ordinary
Course of Business since the date of the Most Recent Balance Sheet, none of
which disposals are expected to have a Material Adverse Effect. The
consummation of the transactions contemplated by this Agreement will not affect
the Company's good and marketable title to, or valid leasehold interest in, the
properties and assets described in the preceding sentence.
(e) SUBSIDIARIES. The Company does not currently have, and
has never had, any Subsidiaries and does not own any securities of any other
Person.
(f) FINANCIAL STATEMENTS. Attached hereto as Exhibit are the
following financial statements (collectively the "Financial Statements"): (i)
reviewed consolidated balance sheets and statements of income, including the
independent accountant's report thereon as of and for the fiscal year ended
December 31, 1997 (the "Most Recent Fiscal Year End") for the Company; (ii)
reviewed consolidated balance sheets and statements of income, including the
independent accountant's report thereon as of and for the fiscal years ended
December 31, 1994, December 31, 1995 and December 31, 1996 and (iii) unaudited
consolidated balance sheets and statements of income, (the "Most Recent
Financial Statements") as of and for the period from January 1, 1998, through
December 31, 1998 for the Company (the "Most Recent Fiscal Period End"). The
Financial Statements (including the notes thereto) have been prepared in
accordance with GAAP applied on a consistent basis throughout the periods
covered thereby, present fairly the financial condition of the Company as of
such dates and the results of operations of the Company for such periods, are
correct and complete in all material respects, and are consistent with the
books and records of the Company (which books and records are correct and
complete in all material respects).
(g) EVENTS SUBSEQUENT TO MOST RECENT FISCAL YEAR END. Except
as set forth on Section of the Disclosure Schedule, since the Most Recent
Fiscal Year End, there has not been any occurrence, event, incident, action,
failure to act or transaction that constitutes the Basis of a Material Adverse
Effect on the Company or any that is outside the Ordinary Course of Business.
Without limiting the generality of the foregoing, since that date:
(i) The Company has not sold, leased, transferred,
or assigned any of its assets, tangible or intangible, other than for a fair
consideration in the Ordinary Course of Business;
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(ii) The Company has not entered into any
agreements, contracts, leases, or licenses either involving more than $100,000
or having a term greater than 12 months or outside the Ordinary Course of
Business;
(iii) No party (including the Company) has
accelerated, terminated, modified, or cancelled any agreements, contracts,
leases, or licenses involving more than $100,000 to which the Company is a
party or by which it is bound;
(iv) The Company has not imposed or allowed to be
imposed any Security interest upon any of its assets, tangible or intangible;
(v) The Company has not made any capital
expenditures involving more than $100,000 in the aggregate or outside the
Ordinary Course of Business;
(vi) The Company has not made any capital investment
in, any loan to, or any acquisition of the securities or assets of, any other
Person;
(vii) The Company has not issued any note, bond, or
other debt security or created, incurred, assumed, or guaranteed any
indebtedness for borrowed money or capitalized lease obligation involving more
than $100,000;
(viii) The Company has not delayed or postponed the
payment of accounts payable and other Liabilities outside the Ordinary Course
of Business;
(ix) The Company has not cancelled, compromised,
waived, or released any right or claim either involving more than $100,000 in
the aggregate or outside the Ordinary Course of Business;
(x) The Company has not granted any license or
sublicense of any rights under or with respect to any Intellectual Property;
(xi) There has been no change made or authorized in
the charter or bylaws of any of the Company;
(xii) The Company has not issued, sold, or otherwise
disposed of any of its capital stock or securities convertible into or
exchangeable for such stock, or granted any options, warrants, or other rights
to purchase or obtain any of such capital stock or securities;
(xiii) The Company has not declared, set aside, or
paid any dividend or made any distribution with respect to its capital stock
(whether in cash or in kind) or redeemed, purchased, or otherwise acquired any
of its capital stock or other securities;
(xiv) The Company has not experienced any damage,
destruction, or loss (whether or not covered by insurance) to its property
involving more than $100,000 in the aggregate;
(xv) The Company has not made any loan to, or
entered into any other transaction with, any of its directors, officers, and
employees or their "Associates" (as defined in Rule 12b-2 under the Exchange
Act);
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(xvi) The Company has not entered into any
employment contract or collective bargaining agreement, written or oral, or
modified the terms of any existing such contract or agreement outside the
Ordinary Course of Business;
(xvii) The Company has not granted any increase in
any compensation of any of its directors, officers, or other employees outside
the Ordinary Course of Business;
(xviii) The Company has not adopted, amended,
modified, or terminated any bonus, profit-sharing, incentive, severance, or
other plan, contract, or commitment for the benefit of any of its directors,
officers, and employees (or taken any such action with respect to any other
Employee Benefit Plan);
(xix) The Company has not made any other change in
employment terms for any of its directors, officers, and employees outside the
Ordinary Course of Business;
(xx) The Company has not made or pledged to make any
charitable or other capital contribution outside the Ordinary Course of
Business;
(xxi) There has not been any other material
occurrence, event, incident, action, failure to act, or transaction outside the
Ordinary Course of Business involving the Company; and
(xxii) The Company has not increased, or experienced
any change in assumptions underlying or method of calculating, any bad debt,
contingency, tax or other reserves or changed its accounting practices, methods
or assumptions (including changes in estimates or valuation methods); or
written down the value of any assets;
(xxiii) The Company has not granted any bonuses or
made any other payments of any kind (other than base compensation in the
Ordinary Course of Business) to any officer, director or employee of the
Company, or to any Person related to any of the foregoing; and
(xxiv) The Company has not committed to do any of
the foregoing.
(h) UNDISCLOSED LIABILITIES. Except as disclosed in Section
of the Disclosure Schedule, the Company does not have any Liability, except for
(i) Liabilities set forth on the face of the Most Recent Balance Sheet (rather
than in any notes thereto) and (ii) Liabilities which have arisen after the
Most Recent Fiscal Period End in the Ordinary Course of Business (none of which
results from, arises out of, relates to, is in the nature of, or was caused by
any breach of contract, breach of warranty, tort, infringement, or violation of
law and none of which could reasonably be expected to have a Material Adverse
Effect).
(i) LEGAL COMPLIANCE. The Company and its predecessors and
Affiliates have complied, in all material respects, with all applicable laws
(including rules, regulations, codes, plans, injunctions, judgments, orders,
decrees, rulings, and charges thereunder) of federal, state, local, and foreign
governments (and all agencies thereof), and no action, suit, proceeding,
hearing, investigation, charge, complaint, claim, demand, or notice has been
filed or commenced against any of them alleging any failure so to comply.
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(j) TAX MATTERS.
(i) The Company has filed all Tax Returns that were
required to be filed prior to the date hereof and will have filed all Tax
Returns that it will have been required to file prior to the Closing Date. All
such Tax Returns were correct and complete in all material respects. All Taxes
owed by the Company (whether or not shown on any Tax Return) have been paid or
are fully and adequately accrued and adequately disclosed on the Most Recent
Balance Sheet. The Company is not currently the beneficiary of any extension of
time within which to file any Tax Return. No claim has ever been made by an
authority in a jurisdiction where the Company does not file Tax Returns that it
is or may be subject to taxation by that jurisdiction. There are no Security
Interests on any of the assets of the Company that arose in connection with any
failure (or alleged failure) to pay any Tax.
(ii) The Company has withheld and paid when due all
Taxes required to have been withheld and paid in connection with amounts paid
or owing to any employee, independent contractor, creditor, stockholder, or
other third party.
(iii) Neither Shareholders nor the Company has
Knowledge that any authority expects to assess any additional Taxes for any
period for which Tax Returns have been filed. There is no action, suit or
proceeding, investigation, dispute or claim now pending or threatened
concerning any Tax Liability of the Company or proposed adjustment to the
taxable income of the Company either (A) claimed or raised by any authority in
writing or (B) as to which any of the Shareholders and the Company has
Knowledge based upon personal contact with any agent of such authority. Section
of the Disclosure Schedule contains a summary of all Tax Returns filed with
respect to the Company for the last three completed tax years, indicates those
Tax Returns that have been audited, and indicates those Tax Returns that
currently are the subject of audit. The Shareholders have made available to
Buyer correct and complete copies of all Tax Returns of the Company,
examination reports, and statements of deficiencies assessed against or agreed
to by the Company since January 1, 1994.
(iv) The Company has not waived any statute of
limitations in respect of Taxes or agreed to any extension of time with respect
to a Tax assessment or deficiency.
(v) The Company has not filed a consent under Code
Section 341(f) concerning collapsible corporations. The Company has not made
any payments, is not obligated to make any payments, or is not a party to any
agreement that under certain circumstances could obligate it to make any
payments that will not be deductible under Code Section 280G or that would give
rise to any obligation to indemnify any Person for any excise tax payable
pursuant to Code Section 4999. The Company has not been a United States real
property holding corporation within the meaning of Code Section 897(c)(2)
during the applicable period specified in Code Section 897(c)(1)(A)(ii). The
Company has disclosed on its federal income Tax Returns all positions taken
therein that could give rise to a substantial understatement of federal income
Tax within the meaning of Code Section 6662. Neither the Company nor any
predecessor or affiliate thereof is a party to any Tax allocation, sharing,
indemnification or similar agreement. The Company (A) has not been a member of
an Affiliated Group filing a consolidated federal income Tax Return (other than
a group the common parent of which was the Company) and (B) does not have any
Liability for the Taxes of any Person (other than any of the Company and its
Subsidiaries) under Reg. Section 1.1502-6 (or any similar provision of state,
local, or foreign law), as a transferee or successor, by contract, or
otherwise. No indebtedness of the Company consists of "corporate acquisition
indebtedness" within the meaning of Code Section 279.
(vi) Section of the Disclosure Schedule sets forth
as of the most recent practicable date the basis for Federal income tax
purposes of the Company in its assets.
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(vii) The unpaid Taxes of the Company (A) did not,
as of the Most Recent Fiscal Period End, exceed the reserve for Tax Liability
set forth on the face of the Most Recent Balance Sheet (rather than in any
notes thereto) and (B) do not, and will not as of the Closing Date, exceed that
reserve as adjusted for the passage of time through the Closing Date in
accordance with the past custom and practice of the Company in filing its Tax
Returns.
(viii) Except as set forth on Section of the
Disclosure Schedule, the Company (and any predecessor of the Company) has been
a validly electing S corporation within the meaning of Code xx.xx. 1361 and
1362 at all times during its existence and the Company will be an S corporation
up to and including the Closing Date.
(ix) The Company will not be liable for any Tax
under Code Section 1374 in connection with the deemed sale of the Company's
assets caused by the ss. 338(h)(10) Election. The Company has not, in the past
10 years, (A) acquired assets from another corporation in a transaction in
which the Company's Tax basis for the acquired assets was determined, in whole
or in part, by reference to the Tax basis of the acquired assets (or other
property) in the hands of the transferor or (B) acquired the stock of any
corporation which is a qualified subchapter S subsidiary.
(k) REAL PROPERTY. The Company does not own any real
property. Section of the Disclosure Schedule lists and describes briefly all
real property leased or subleased to the Company. The Company does not lease any
real property pursuant to written lease agreements.
(l) INTELLECTUAL PROPERTY.
(i) Section of the Disclosure Schedule lists the
Intellectual Property owned by the Company. To the Shareholders' Knowledge, the
Company owns or has the right to use pursuant to license, sublicense,
agreement, or permission in writing all Intellectual Property necessary for the
operation of the businesses of the Company as presently conducted and as
presently proposed to be conducted. To the Shareholders' Knowledge, each item
of Intellectual Property owned or used by the Company immediately prior to the
Closing hereunder will be owned or available for use by the Company on
identical terms and conditions immediately subsequent to the Closing hereunder.
To the Shareholders' Knowledge, the Company has taken all necessary action to
maintain and protect each item of Intellectual Property that it owns or uses.
(ii) To the Shareholders' Knowledge, the Company has
not interfered with, infringed upon, misappropriated, or otherwise come into
conflict with any Intellectual Property rights of third parties, and none of
the Shareholders and the directors and officers (and employees with
responsibility for Intellectual Property matters) of the Company has ever
received any charge, complaint, claim, demand, or notice alleging any such
interference, infringement, misappropriation, or violation (including any claim
that the Company must license or refrain from using any Intellectual Property
rights of any third party). To the Knowledge of Shareholders and the Company,
no third party has interfered with, infringed upon, misappropriated, or
otherwise come into conflict with any Intellectual Property rights of the
Company.
(iii) Section of the Disclosure Schedule identifies
each patent or registration which has been issued to the Company with respect
to any of its Intellectual Property, identifies each pending patent application
or application for registration which the Company has made with respect to any
of its Intellectual Property, and identifies each license, agreement, or other
permission which the Company has granted to any third party with respect to any
of its Intellectual Property (together with any exceptions). The Shareholders
have delivered to Buyer correct and complete copies of all such patents,
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registrations, applications, licenses, agreements, and permissions (as amended
to date) and have made available to Buyer correct and complete copies of all
other written documentation evidencing ownership and prosecution (if
applicable) of each such item. Section of the Disclosure Schedule also
identifies each trade name or unregistered trademark used by the Company in
connection with any of its businesses. With respect to each item of
Intellectual Property required to be identified in Section of the Disclosure
Schedule:
(A) To the Shareholders' Knowledge, the
Company possesses all right, title, and interest in and to the item, free and
clear of any Security Interest, license, or other restriction;
(B) The item is not subject to any
outstanding injunction, judgment, order, decree, ruling, or charge;
(C) No action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending or is threatened
which challenges the legality, validity, enforceability, use, or ownership of
the item; and
(D) The Company has never agreed to
indemnify any Person for or against any interference, infringement,
misappropriation, or other conflict with respect to the item.
(iv) Section of the Disclosure Schedule identifies
each item of Intellectual Property that any third party owns and that the
Company uses pursuant to license, sublicense, agreement, or permission. The
Shareholders have delivered to Buyer correct and complete copies of all such
licenses, sublicenses, agreements, and permissions (as amended to date). With
respect to each item of Intellectual Property required to be identified in
Section of the Disclosure Schedule:
(A) The license, sublicense, agreement, or
permission covering the item is legal, valid, binding, enforceable, and in full
force and effect;
(B) The license, sublicense, agreement, or
permission will continue to be legal, valid, binding, enforceable, and in full
force and effect on identical terms following the consummation of the
transactions contemplated hereby;
(C) No party to the license, sublicense,
agreement, or permission is in breach or default, and no event has occurred
which with notice or lapse of time would constitute a breach or default or
permit termination, modification, or acceleration thereunder;
(D) No party to the license, sublicense,
agreement, or permission has repudiated any provision thereof;
(E) With respect to each sublicense, the
representations and warranties set forth in subsections (A) through (D) above
are true and correct with respect to the underlying license;
(F) The underlying item of Intellectual
Property is not subject to any outstanding injunction, judgment, order, decree,
ruling, or charge;
(G) No action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending or is threatened
which challenges the legality, validity, or enforceability of the underlying
item of Intellectual Property; and
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(H) The Company has never granted any
sublicense or similar right with respect to the license, sublicense, agreement,
or permission.
(v) To the Knowledge of Shareholders and the
Company, the Company will not interfere with, infringe upon, misappropriate, or
otherwise come into conflict with, any Intellectual Property rights of third
parties as a result of the continued operation of its businesses as presently
conducted and as presently proposed to be conducted.
(vi) None of the Shareholders and the Company has
any Knowledge of any new products, inventions, procedures, or methods of
manufacturing or processing that any competitors or other third parties have
developed which reasonably could be expected to supersede or make obsolete any
product or process of any of the Company.
(m) TANGIBLE ASSETS. The Company owns or leases all
buildings, machinery, equipment, and other tangible assets necessary for the
conduct of its business as presently conducted and as presently proposed to be
conducted. Each such tangible asset has been maintained in accordance with
normal industry practice, is in good operating condition and repair (subject to
normal wear and tear), and is suitable for the purposes for which it presently
is used and presently is proposed to be used. Section of the Disclosure Schedule
lists all material tangible assets owned by the Company.
(n) INVENTORY. The inventory of the Company shown on the Most
Recent Balance Sheet consists of raw materials and supplies, manufactured and
purchased parts, goods in process, and finished goods, all of which is
merchantable and fit for the purpose for which it was procured or manufactured,
and none of which is slow-moving, obsolete, damaged, or defective, subject only
to the reserve for inventory writedown set forth on the face of the Most Recent
Balance Sheet (rather than in any notes thereto) as adjusted for the passage of
time through the Closing Date in accordance with the past custom and practice
of the Company.
(o) CONTRACTS. Section of the Disclosure Schedule lists all
the material contracts and other agreements to which the Company is a party.
The Shareholders have delivered to Buyer a correct and complete copy of each
written agreement listed in Section of the Disclosure Schedule (as amended to
date). With respect to each such agreement: (A) the agreement is legal, valid,
binding, enforceable, and in full force and effect; (B) the agreement will
continue to be legal, valid, binding, enforceable, and in full force and effect
on identical terms following the consummation of the transactions contemplated
hereby; (C) to the Shareholders' Knowledge, no party is in breach or default,
and no event has occurred which with notice or lapse of time would constitute a
breach or default, or permit termination, modification, or acceleration, under
the agreement; and (D) to the Shareholders' Knowledge, no party has repudiated
any provision of the agreement. Section of the Disclosure Schedule lists each
currently outstanding bid or proposal for business submitted by the Company in
excess of $1,000,000.
(p) NOTES AND ACCOUNTS RECEIVABLE. All notes and accounts
receivable of the Company are reflected properly on the Most Recent Balance
Sheet in accordance with GAAP, are valid receivables subject to no setoffs or
counterclaims, are current and collectible, and, will be collected in
accordance with their terms at their recorded amounts, subject only to the
reserve for bad debts set forth on the face of the Most Recent Balance Sheet
(rather than in any notes thereto) as adjusted for the passage of time through
the Closing Date in accordance with the past custom and practice of the
Company.
(q) POWERS OF ATTORNEY. There are no outstanding powers of
attorney executed on behalf of the Company.
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(r) INSURANCE. Section of the Disclosure Schedule includes a
true, correct and complete list of all policies of insurance (including
policies providing property, casualty, liability, and workers' compensation
coverage and bond and surety arrangements) to which the Company is a party.
Genuine and complete copies of each of the insurance policies listed in Section
of the Disclosure Schedule have been provided to Buyer. With respect to each
such insurance policy, to the Shareholders' Knowledge: (A) the policy is legal,
valid, binding, enforceable, and in full force and effect; (B) the policy will
continue to be legal, valid, binding, enforceable, and in full force and effect
on identical terms following the consummation of the transactions contemplated
hereby; (C) neither the Company nor any other party to the policy is in breach
or default (including with respect to the payment of premiums or the giving of
notices), and no event has occurred which, with notice or the lapse of time,
would constitute such a breach or default, or permit termination, modification,
or acceleration, under the policy; (D) neither the Company, any ERISA Affiliate
nor Buyer shall be subject to a retroactive rate adjustment, loss sharing
arrangement or other actual or contingent liability and (E) to Shareholders' or
the Company's Knowledge, no party to the policy has repudiated any provision
thereof. To the Shareholders' Knowledge, the Company has been fully covered at
all times during the past 5 years by insurance in scope and amount customary
and reasonable for the businesses in which it has engaged during the
aforementioned period. Section of the Disclosure Schedule describes any
self-insurance arrangements affecting the Company.
(s) LITIGATION. Section of the Disclosure Schedule sets forth
each instance in which the Company (i) is subject to any outstanding
injunction, judgment, order, decree, ruling, or charge or (ii) is a party, or
to the Knowledge of Shareholders or the Company, is threatened to be made a
party to any claim, action, suit, proceeding, hearing, or investigation of, in,
or before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any arbitrator. Except as set
forth in Section of the Disclosure Schedule, there is no other pending, or to
the Knowledge of Shareholders or the Company, threatened claim, arbitration
proceeding, action, suit, investigation or other proceeding against or
involving the Company or any property or rights of the Company or any officer
or director or the Company. To the Shareholders' Knowledge, none of the
actions, suits, proceedings, hearings, and investigations set forth in Section
of the Disclosure Schedule could have a Material Adverse Effect on the
business, financial condition, operations, results of operations, or future
prospects of the Company. Neither the Shareholders nor the directors and
officers (and employees with responsibility for litigation matters) of the
Company has any reason to believe that any such action, suit, proceeding,
hearing, or investigation may be brought or threatened against the Company.
(t) COMMITMENTS AND WARRANTIES. All services provided by the
Company have been performed in conformity with all applicable contractual
commitments (written or oral) and all express and implied warranties (written
or oral), and the Company has no Liability and, to the Knowledge of the
Shareholders and the Company, there is no Basis for any present or future
action, suit, proceeding, hearing, investigation, charge, complaint, claim, or
demand against any of them giving rise to any Liability) in connection with any
such services. Section of the Disclosure Schedule includes copies of the
standard forms of agreement entered into between the Company and its customers.
The Company has not entered into any written or oral agreements with any of its
customers that include guaranties, warranties, or indemnity provisions other
than those included in the agreements included as part of Section of the
Disclosure Schedule.
Neither the Company nor the Shareholders has received notice (written
or oral) from any of its customers stating that the customer intends to reduce
the volume of business that it currently conducts with the Company or to cease
doing business with the Company.
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(u) LIABILITY FOR SERVICES PERFORMED. The Company has no
Liability (and, to Shareholders' Knowledge, there is no Basis for any present
or future action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand against any of them giving rise to any Liability) arising out
of any injury to individuals or property as a result of or in connection with
any services provided by the Company.
(v) EMPLOYEES. To the Knowledge of the Shareholders or the
Company, no executive, key employee, or group of employees has any plans to
terminate employment with the Company. The Company is not currently, nor at any
prior time has been, a party to or bound by any collective bargaining
agreement, nor has the Company experienced any strikes, contractual grievances,
claims of unfair labor practices, or other collective bargaining disputes. The
Company has not committed any unfair labor practice. Neither the Shareholders
nor the Company have any Knowledge of any organizational effort presently being
made or threatened by or on behalf of any labor union with respect to employees
of the Company. To the Knowledge of the Shareholders and the Company, the
Company has not experienced any material employment dispute with any employee.
(w) EMPLOYEE BENEFITS.
(i) Section of the Disclosure Schedule lists each
Employee Benefit Plan that the Company or any ERISA Affiliate maintains,
contributes to, or is required to contribute to or under which the Company or
any ERISA Affiliate has any liability.
(A) Each such Employee Benefit Plan (and
each related trust, insurance contract, or fund) complies in form and in
operation in all respects with the applicable requirements of ERISA, the Code,
and other applicable laws.
(B) All required reports and disclosures
(including Form 5500 Annual Reports, Summary Annual Reports, PBGC-1's, and
Summary Plan Descriptions) have been filed or distributed appropriately with
respect to each such Employee Benefit Plan. The requirements of Part 6 of
Subtitle B of Title I of ERISA and of Code Section 4980B have been met with
respect to each such Employee Benefit Plan which is an Employee Welfare Benefit
Plan.
(C) All contributions (including all
employer contributions and employee salary reduction contributions) which are
due have been paid to each such Employee Benefit Plan which is an Employee
Pension Benefit Plan and all contributions for any period ending on or before
the Closing Date which are not yet due have been paid to each such Employee
Pension Benefit Plan or accrued in accordance with the past custom and practice
of the Company and in accordance with GAAP. All premiums or other payments for
all periods ending on or before the Closing Date have been paid with respect to
each such Employee Benefit Plan which is an Employee Welfare Benefit Plan.
(D) Each such Employee Benefit Plan which
is an Employee Pension Benefit Plan now meets and at all times since inception
have met the requirements of a "qualified plan" under Code Section 401(a) and
has received, within the last two years, a favorable determination letter from
the Internal Revenue Service.
(E) As of the Closing Date, the market
value of assets under each such Employee Benefit Plan which is an Employee
Pension Benefit Plan (other than any Multiemployer Plan) will equal or exceed
the present value of all vested and nonvested Liabilities thereunder determined
in accordance with PBGC methods, factors, and assumptions applicable to an
Employee Pension Benefit Plan terminating on such date.
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(F) The Shareholders have delivered to
Buyer correct and complete copies of the plan documents and summary plan
descriptions including all amendments thereto, the most recent determination
letter received from the Internal Revenue Service, the three most recent Form
5500 Annual Reports (including all schedules thereto), the three most recent
annual premium payment forms filed with the PBGC, and all related trust
agreements, insurance contracts, and other funding agreements which implement
each such Employee Benefit Plan.
(ii) With respect to each Employee Benefit Plan that
the Company or any ERISA Affiliate maintains, contributes to, or is required to
contribute to or under which the Company or any ERISA Affiliate has any
liability:
(A) No such Employee Benefit Plan which is
an Employee Pension Benefit Plan (other than any Multiemployer Plan) has been
completely or partially terminated or been the subject of a Reportable Event as
to which notices would be required to be filed with the PBGC. No proceeding by
the PBGC to terminate any such Employee Pension Benefit Plan (other than any
Multiemployer Plan) has been instituted or threatened.
(B) There have been no Prohibited
Transactions with respect to any such Employee Benefit Plan. No Fiduciary has
any Liability for breach of fiduciary duty or any other failure to act or
comply in connection with the administration or investment of the assets of any
such Employee Benefit Plan. No action, suit, proceeding, hearing, or
investigation with respect to any such Employee Benefit Plan (other than
routine claims for benefits) is pending or threatened. Neither the Shareholders
nor the Company has any Knowledge of any Basis for any such action, suit,
proceeding, hearing, or investigation.
(C) Neither the Company nor any ERISA
Affiliate has incurred, and none of the Shareholders and the directors and
officers (and employees with responsibility for employee benefits matters) of
the Company has any reason to expect that the Company or any ERISA Affiliate
will incur, any Liability to the PBGC (other than PBGC premium payments) or
otherwise under Title IV of ERISA (including any withdrawal Liability) or under
the Code with respect to any such Employee Benefit Plan which is an Employee
Pension Benefit Plan.
(iii) Neither the Company nor any ERISA Affiliate
contributes to, ever has contributed to, or ever has been required to
contribute to any Multiemployer Plan or has any Liability (including withdrawal
Liability) under any Multiemployer Plan.
(iv) Neither the Company nor any ERISA Affiliate
maintains or contributes to, or has ever been required to contribute to any
Employee Welfare Benefit Plan providing medical, health, or life insurance or
other welfare-type benefits for current or future retired or terminated
employees, their spouses, or their dependents (other than in accordance with
Code Section 4980B).
(x) GUARANTIES. The Company is not a guarantor or otherwise
is liable for any Liability or obligation (including indebtedness) of any other
Person.
(y) ENVIRONMENTAL, HEALTH, AND SAFETY MATTERS.
(i) The Company and its Affiliates have complied and
are in compliance with all Environmental, Health, and Safety Requirements.
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(ii) Without limiting the generality of the
foregoing, the Company and its Affiliates have obtained and complied with, and
are in compliance with, all permits, licenses and other authorizations that are
required pursuant to Environmental, Health, and Safety Requirements for the
occupation of its facilities and the operation of its business; a list of all
such permits, licenses and other authorizations is set forth on the Disclosure
Schedule.
(iii) Neither the Company nor its Affiliates has
received any written or oral notice, report or other information regarding any
actual or alleged violation of Environmental, Health, and Safety Requirements,
or any liabilities or potential liabilities (whether accrued, absolute,
contingent, unliquidated or otherwise), including any investigatory, remedial
or corrective obligations, relating to any of them or its facilities arising
under Environmental, Health, and Safety Requirements.
(iv) None of the following exists at any property or
facility owned or operated by the Company: (1) underground storage tanks, (2)
asbestos-containing material in any form or condition, (3) materials or
equipment containing polychlorinated biphenyls, or (4) landfills, surface
impoundments, or disposal areas.
(v) None of the Company or its Affiliates has
treated, stored, disposed of, arranged for or permitted the disposal of,
transported, handled, or released any substance, including without limitation
any hazardous substance, or owned or operated any property or facility (and no
such property or facility is contaminated by any such substance) in a manner
that has given or would give rise to liabilities, including any liability for
response costs, corrective action costs, personal injury, property damage,
natural resources damages or attorney fees, pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), the Solid Waste Disposal Act, as amended ("SWDA") or any other
Environmental, Health, and Safety Requirements.
(vi) Neither this Agreement nor the consummation of
the transaction that is the subject of this Agreement will result in any
obligations for site investigation or cleanup, or notification to or consent of
government agencies or third parties, pursuant to any of the so-called
"transaction-triggered" or "responsible property transfer" Environmental,
Health, and Safety Requirements.
(vii) Neither the Company nor its Affiliates has,
either expressly or by operation of law, assumed or undertaken any liability,
including without limitation any obligation for corrective or remedial action,
of any other Person relating to Environmental, Health, and Safety Requirements.
(viii) No facts, events or conditions relating to
the past or present facilities, properties or operations of the Company or any
of its Affiliates will prevent, hinder or limit continued compliance with
Environmental, Health, and Safety Requirements, give rise to any investigatory,
remedial or corrective obligations pursuant to Environmental, Health, and
Safety Requirements (whether on-site or off-site), or give rise to any other
liabilities (whether accrued, absolute, contingent, unliquidated or otherwise)
pursuant to Environmental, Health, and Safety Requirements, including without
limitation any relating to onsite or offsite releases or threatened releases of
hazardous materials, substances or wastes, personal injury, property damage or
natural resources damage.
(z) CERTAIN BUSINESS RELATIONSHIPS WITH THE COMPANY. Except
as set forth in Section of the Disclosure Schedule, neither the Shareholders,
their respective Affiliates, any director or employee of the Company, or any
relatives of the Shareholders, or any person living in the same residence as
such persons, has been involved in any business arrangement or relationship
with the Company within the past
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12 months, and neither the Shareholders nor their respective Affiliates nor any
of such other persons own leases, licenses, or otherwise has any interest in
any asset, tangible or intangible, which is used in the business of the Company
or any contract, lease or commitment to which the Company is a party. The
Company is not indebted to any officer, director or employee of the Company for
any liability or obligation. No officer, director or employee of the Company is
indebted to the Company for any liability or obligation.
(aa) CUSTOMERS AND SUPPLIERS. To the Shareholders' Knowledge,
no purchase order or commitment of the Company is in excess of normal
requirements, nor are prices provided therein in excess of current market
prices for the products or services to be provided thereunder. No material
supplier of the Company has advised the Company in writing within the past year
that it will stop, or decrease the rate of, supplying materials, products or
services to the Company and no material customer of the Company has advised the
Company in writing within the past year that it will stop, or decrease the rate
of buying materials, products or services from the Company. Section of the
Disclosure Schedule sets forth a list of (a) each customer that accounted for
more than 5% of the consolidated revenues of the Company during the last full
fiscal year or the interim period through the date of the Most Recent Financial
Statements and the amount of revenues accounted for by such customer during
each such period and (b) each supplier that is the sole supplier of any
significant product or component to the Company. To the Shareholders'
Knowledge, the consummation of the transactions contemplated hereby will not
have a Material Adverse Effect on the Company's relationship with any customer
or supplier listed in Section of the Disclosure Schedule.
6. REPRESENTATIONS AND WARRANTIES CONCERNING THE BUYER AND ORIUS. The
Buyer and Orius, jointly and severally, represent and warrant to the
Shareholders that the statements contained in this Section are correct and
complete as of the date of this Agreement and will be correct and complete as
of the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Section ), except as
set forth in the Buyer Disclosure Schedule. The Buyer Disclosure Schedule shall
be effective to modify only those representations and warranties to which the
Disclosure Schedule makes explicit reference. The Buyer Disclosure Schedule
will be arranged in paragraphs corresponding to the lettered and numbered
paragraphs contained in this Section .
(a) ORGANIZATION OF THE BUYER. The Buyer is a limited
liability company duly organized, validly existing, and in good standing under
the laws of the State of Delaware. Correct and complete copies of the governing
documents of the Buyer (as amended to date) are included as part of the Buyer
Disclosure Schedule. The manager and executive officers of the Buyer and the
names and titles of the executive officers and directors of Orius are set forth
on the Buyer Disclosure Schedule.
(b) ORGANIZATION OF ORIUS. Orius is a corporation validly
existing and in good standing under laws of the State of Delaware. Each
Affiliate and Subsidiary of Orius is validly existing and in good standing
under the laws of the state in which it was incorporated or organized. Orius,
and each of its Affiliates and Subsidiaries, is duly authorized to conduct
business under the laws of each jurisdiction where such qualification is
required, except where failure to do so is authorized or will not result in any
Material Adverse Effect. Orius and each of its Affiliates and Subsidiaries has
full corporate power and authority and all licenses, permits and authorizations
necessary to carry on the business in which it is engaged and in which it
presently proposes to engage, and to own and use the properties owned and used
by it, except where a failure to obtain any such licenses, permits and
authorizations will not have a Material Adverse Effect on Orius. Correct and
complete copies of the charter and bylaws (or similar governance documents) of
Orius are included as part of Section of the Buyer Disclosure Schedule. Neither
Orius, nor any of its Affiliates and Subsidiaries, are in default under or in
violation of any provisions of their respective charters or bylaws (or similar
governance documents).
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(c) CAPITALIZATION OF ORIUS. The entire authorized capital
stock of Orius consists of 4,700,000 shares of Common Stock and 300,000 shares
of preferred stock. The issued and outstanding capital stock of Orius is set
forth and held of record as set forth on Buyer Disclosure Schedule. All of the
issued and outstanding shares of Common Stock have been duly authorized,
validly issued, fully paid, and are nonassessable. There are no outstanding or
authorized options, warrants, purchase rights, subscription rights, conversion
rights, exchange rights, or other contracts or commitments that could require
Orius to issue, sell, or otherwise cause to become outstanding any of its
capital stock. There are no outstanding or authorized stock appreciation,
phantom stock, profit participation, or similar rights with respect to Orius.
There are no voting trusts, proxies or other agreements or understandings with
respect to the voting of the capital stock of Orius.
(d) TITLE TO ASSETS. Orius, its Affiliates and Subsidiaries
have good and marketable title to, or a valid leasehold interest in, the
properties and assets used by them, located on their premises, or shown on the
Most Recent Orius Balance Sheet or acquired after the date thereof, free and
clear of all Security Interests (other than the Security Interests disclosed on
the face of the Most Recent Orius Balance Sheet and other Permitted Liens),
except for properties and assets disposed of in the Ordinary Course of Business
since the date of the Most Recent Orius Balance Sheet, none of which disposals
are expected to have a Material Adverse Effect on Orius or any of its
Affiliates or Subsidiaries. The consummation of the transactions contemplated
by this Agreement will not affect the Company's good and marketable title to,
or valid leasehold interest in, the properties and assets described in the
preceding sentence.
(e) SUBSIDIARIES AND AFFILIATES. Section of the Buyer
Disclosure Schedule sets forth a complete and correct list of all Subsidiaries
of North American. Except as set forth in Section of the Buyer Disclosure
Schedule, Orius does not currently have, and has not had within the past five
years, any Affiliates or Subsidiaries, and does not own any securities of any
other Person. The issued and outstanding capital stock of each Subsidiary has
been duly authorized, validly issued and fully paid, and is nonassessable.
There are no outstanding or authorized options, warrants, purchase rights,
subscription rights, conversion rights, preemptive rights, exchange rights, or
other contracts or commitments that could require any such Subsidiary to issue,
sell or otherwise cause to become outstanding any of its capital stock. There
are no outstanding obligations of any such Subsidiary to purchase, redeem or
otherwise acquire any capital stock or any securities convertible into or
exchangeable for such capital stock, or any options, warrants or rights to
purchase such capital stock or securities. There are no outstanding or
authorized stock appreciation, phantom stock, profit participation or similar
rights with respect to any Subsidiary. There are no voting trusts, proxies or
other agreements or understandings with respect to the voting of the capital
stock of any such Subsidiary.
(f) FINANCIAL STATEMENTS. Attached hereto as Exhibit are the
following financial statements of North American (collectively the "North
American Financial Statements"): consolidated balance sheets and statements of
income, including the independent accountant's report thereon as of and for the
fiscal period ended November 28, 1998 (the "Most Recent North American Fiscal
Period End"). The North American Financial Statements (including the notes
thereto) have been prepared in accordance with GAAP applied on a consistent
basis throughout the periods covered thereby, present fairly the financial
condition of North American, its Affiliates and Subsidiaries as of such dates
and the results of operations of North American, its Affiliates and
Subsidiaries for such periods, are correct and complete in all material
respects, and are consistent with the books and records of North American, its
Affiliates and Subsidiaries (which books and records are correct and complete
in all material respects).
(g) EVENTS SUBSEQUENT TO MOST RECENT NORTH AMERICAN PERIOD
END. Since the Most Recent North American Fiscal Period End there has not
occurred any Material Adverse Effect on North
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American or any of its Affiliates or Subsidiaries, and North American, its
Affiliates and Subsidiaries have not engaged in any transactions outside of the
Ordinary Course of Business.
(h) TAX MATTERS. All federal, state, local and other tax
returns required to have been filed with respect to North American and any
North American Subsidiary have been filed, and payment or adequate provision
has been made for the payment of all taxes, fees, assessments and other
governmental charges which have or may become due pursuant to said returns or
to assessments received, except to the extent that such taxes, fees,
assessments and other charges are being contested in good faith by appropriate
proceedings diligently conducted and for which such reserves or other
appropriate provisions, if any, as shall be required by GAAP shall have been
made and except where failure to file would not result in assessment of taxes,
penalties and interest in excess of $100,000 in the aggregate. There are no
agreements or waivers extending the statutory period of limitations applicable
to any federal income tax return of North American or any North American
Subsidiary for any period.
(i) INTELLECTUAL PROPERTY.
North American and each North American Subsidiary owns or
possesses all the material patents, trademarks, service marks, trade names,
copyrights, licenses, registrations, franchises, permits and rights necessary
to own and operate its properties and to carry on its business as presently
conducted and planned to be conducted by North American or a North American
Subsidiary, without known possible, alleged or actual conflict with the rights
of others.
(j) INSURANCE. All insurance policies and other bonds to
which North American or any North American Subsidiary is a party are valid and
in full force and effect. No notice has been given or claim made and no grounds
exist to cancel or avoid any of such policies or bonds or to reduce the
coverage provided thereby. Such policies and bonds provide adequate coverage
from reputable and financially sound insurers in amounts sufficient to insure
the assets and risks of North American and North American Subsidiary in
accordance with prudent business practice in the industry of the such entity.
(k) LEGAL COMPLIANCE. North American and each North American
Subsidiary are in compliance in all material respects with all applicable Laws
(other than Environmental Laws which are specifically addressed in Section ) in
all jurisdictions in which any North American or any North American Subsidiary
is presently doing business except where the failure to do so would not have a
Material Adverse Effect.
(l) EMPLOYEE BENEFITS.
(i) Each Employee Benefit Plan (and each related
trust, insurance contract, or fund) to which North American or any North
American Subsidiary is party complies in form and in operation in all respects
with the applicable requirements of ERISA, the Code, and other applicable laws.
(ii) All required reports and disclosures (including
Form 5500 Annual Reports, Summary Annual Reports, PBGC-1's, and Summary Plan
Descriptions) have been filed or distributed appropriately with respect to each
such Employee Benefit Plan. The requirements of Part 6 of Subtitle B of Title I
of ERISA and of Code Section 4980B have been met with respect to each such
Employee Benefit Plan which is an Employee Welfare Benefit Plan.
(iii) All contributions (including all employer
contributions and employee salary reduction contributions) which are due have
been paid to each such Employee Benefit Plan which
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is an Employee Pension Benefit Plan and all contributions for any period ending
on or before the Closing Date which are not yet due have been paid to each such
Employee Pension Benefit Plan or accrued in accordance with the past custom and
practice of the applicable North American Subsidiary and in accordance with
GAAP. All premiums or other payments for all periods ending on or before the
Closing Date have been paid with respect to each such Employee Benefit Plan
which is an Employee Welfare Benefit Plan.
(iv) Each such Employee Benefit Plan which is an
Employee Pension Benefit Plan now meets and at all times since inception have
met the requirements of a "qualified plan" under Code Section 401(a) and has
received, within the last two years, a favorable determination letter from the
Internal Revenue Service.
(v) As of the Closing Date, the market value of
assets under each such Employee Benefit Plan which is an Employee Pension
Benefit Plan (other than any Multiemployer Plan) will equal or exceed the
present value of all vested and nonvested Liabilities thereunder determined in
accordance with PBGC methods, factors, and assumptions applicable to an
Employee Pension Benefit Plan terminating on such date.
(vi) With respect to each Employee Benefit Plan that
North American or any ERISA Affiliate maintains, contributes to, or is required
to contribute to or under which North American or any ERISA Affiliate has any
liability:
(A) No such Employee Benefit Plan which is
an Employee Pension Benefit Plan (other than any Multiemployer Plan) has been
completely or partially terminated or been the subject of a Reportable Event as
to which notices would be required to be filed with the PBGC. No proceeding by
the PBGC to terminate any such Employee Pension Benefit Plan (other than any
Multiemployer Plan) has been instituted or threatened.
(B) There have been no Prohibited
Transactions with respect to any such Employee Benefit Plan. No Fiduciary has
any Liability for breach of fiduciary duty or any other failure to act or
comply in connection with the administration or investment of the assets of any
such Employee Benefit Plan. No action, suit, proceeding, hearing, or
investigation with respect to any such Employee Benefit Plan (other than
routine claims for benefits) is pending or threatened. Neither the Shareholders
nor North American has any Knowledge of any Basis for any such action, suit,
proceeding, hearing, or investigation.
(C) Neither North American nor any ERISA
Affiliate has incurred, and none of the Shareholders and the directors and
officers (and employees with responsibility for employee benefits matters) of
North American has any reason to expect that North American or any ERISA
Affiliate will incur, any Liability to the PBGC (other than PBGC premium
payments) or otherwise under Title IV of ERISA (including any withdrawal
Liability) or under the Code with respect to any such Employee Benefit Plan
which is an Employee Pension Benefit Plan.
(vii) Neither North American nor any ERISA Affiliate
contributes to, ever has contributed to, or ever has been required to
contribute to any Multiemployer Plan or has any Liability (including withdrawal
Liability) under any Multiemployer Plan.
(viii) Neither North American nor any North American
Subsidiary maintains or contributes to, or has ever been required to contribute
to any Employee Welfare Benefit Plan providing
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medical, health, or life insurance or other welfare-type benefits for current
or future retired or terminated employees, their spouses, or their dependents
(other than in accordance with Code Section 4980B).
(m) ENVIRONMENTAL, HEALTH, AND SAFETY MATTERS.
(i) North American and its predecessors and each
North American Subsidiary have complied and are in compliance with all
Environmental, Health, and Safety Requirements.
(ii) Without limiting the generality of the
foregoing, North American and each North American Subsidiary have obtained and
complied with, and are in compliance with, all permits, licenses and other
authorizations that are required pursuant to Environmental, Health, and Safety
Requirements for the occupation of its facilities and the operation of its
business; a list of all such permits, licenses and other authorizations is set
forth on the attached Buyer Disclosure Schedule.
(iii) Neither North American nor its predecessors
nor any North American Subsidiary has received any written or oral notice,
report or other information regarding any actual or alleged violation of
Environmental, Health, and Safety Requirements, or any liabilities or potential
liabilities (whether accrued, absolute, contingent, unliquidated or otherwise),
including any investigatory, remedial or corrective obligations, relating to
any of them or its facilities arising under Environmental, Health, and Safety
Requirements.
(iv) None of the following exists at any property or
facility owned or operated by North American: (1) underground storage tanks,
(2) asbestos-containing material in any form or condition, (3) materials or
equipment containing polychlorinated biphenyls, or (4) landfills, surface
impoundments, or disposal areas.
(v) None of North American or its predecessors nor
any North American Subsidiary has treated, stored, disposed of, arranged for or
permitted the disposal of, transported, handled, or released any substance,
including without limitation any hazardous substance, or owned or operated any
property or facility (and no such property or facility is contaminated by any
such substance) in a manner that has given or would give rise to liabilities,
including any liability for response costs, corrective action costs, personal
injury, property damage, natural resources damages or attorney fees, pursuant
to the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), the Solid Waste Disposal Act, as amended ("SWDA")
or any other Environmental, Health, and Safety Requirements.
(vi) Neither this Agreement nor the consummation of
the transaction that is the subject of this Agreement will result in any
obligations for site investigation or cleanup, or notification to or consent of
government agencies or third parties, pursuant to any of the so-called
"transaction-triggered" or "responsible property transfer" Environmental,
Health, and Safety Requirements.
(vii) Neither North American nor its predecessors
nor any North American Subsidiary has, either expressly or by operation of law,
assumed or undertaken any liability, including without limitation any
obligation for corrective or remedial action, of any other Person relating to
Environmental, Health, and Safety Requirements.
(viii) No facts, events or conditions relating to
the past or present facilities, properties or operations of North American or
any of its predecessors or North American Subsidiary will prevent, hinder or
limit continued compliance with Environmental, Health, and Safety Requirements,
give
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rise to any investigatory, remedial or corrective obligations pursuant to
Environmental, Health, and Safety Requirements (whether on-site or off-site),
or give rise to any other liabilities (whether accrued, absolute, contingent,
unliquidated or otherwise) pursuant to Environmental, Health, and Safety
Requirements, including without limitation any relating to onsite or offsite
releases or threatened releases of hazardous materials, substances or wastes,
personal injury, property damage or natural resources damage.
(n) DISCLOSURE. Neither this Agreement nor any of the
exhibits, attachments, written statements, documents, certificates or other
items prepared for or supplied to the Shareholders by Orius with respect to the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state any material fact necessary in order to make each
statement contained herein or therein not misleading. There is no fact which
Orius has not disclosed to the Shareholders herein and of which Orius or any of
the its officers or directors is aware and which could be anticipated to have a
Material Adverse Effect on Orius after the Closing.
7. PRE-CLOSING COVENANTS. The Parties agree as follows with respect to
the period between the execution of this Agreement and the Closing.
(a) GENERAL. Each of the Parties will use his or its best
efforts to take all action and to do all things necessary, proper, or advisable
in order to consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the closing conditions
set forth in Section below).
(b) NOTICES AND CONSENTS. The Shareholders will cause the
Company to give any notices to third parties, and will cause the Company to use
its best efforts to obtain any third party consent required in connection with
the matters referred to in Section above. Each of the Parties will (and the
Shareholders will cause the Company to) give any notices to, make any filings
with, and use its best efforts to obtain any authorizations, consents, and
approvals of governments and governmental agencies in connection with the
matters referred to in Section and Section above.
(c) OPERATION OF BUSINESS. Except as set forth on Schedule
hereto and Section of the Disclosure Schedule, the Shareholders will not cause
or permit the Company to engage in any practice, take any action, or enter into
any transaction outside the Ordinary Course of Business. Without limiting the
generality of the foregoing, and except as set forth on Section of the
Disclosure Schedule, the Shareholders will not cause or permit the Company to
(i) declare, set aside, or pay any dividend or make any distribution with
respect to its capital stock or redeem, purchase, or otherwise acquire any of
its capital stock or (ii) otherwise engage in any practice, take any action, or
enter into any transaction of the sort described in Section above. The
Shareholders will immediately notify Buyer in writing with respect to any
proposed capital expenditures in excess of $50,000.
(d) PRESERVATION OF BUSINESS. Except as provided on Schedule
, the Shareholders will cause the Company to keep its business and properties
substantially intact, including its present operations, physical facilities,
working conditions, and relationships with lessors, licensors, suppliers,
customers, and employees.
(e) FULL ACCESS. The Shareholders will permit, and will cause
the Company to permit, representatives of Buyer to have full access at all
reasonable times, and in a manner so as not to interfere with the normal
business operations of the Company, to all premises, properties, personnel,
books, records (including Tax records), contracts, and documents of or
pertaining to the Company. At the request of Buyer, Shareholders will permit,
and will cause the Company to permit, Buyer's lenders,
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and their respective counsel, to have the same access as permitted to Buyer in
accordance with the immediately preceding sentence.
(f) NOTICE OF DEVELOPMENTS. The Shareholders will give prompt
written notice to Buyer of any breach of any of the representations and
warranties in Section above. Each Party will give prompt written notice to the
others of any breach of any of his or its own representations and warranties in
Section above. No disclosure by any Party pursuant to this Section , however,
shall be deemed to amend or supplement the Buyer Disclosure Schedule or the
Disclosure Schedule or to prevent or cure any misrepresentation, breach of
warranty, or breach of covenant.
(g) EXCLUSIVITY. The Shareholders will not (and the
Shareholders will not cause or permit the Company to) (i) solicit, initiate, or
encourage the submission of any proposal or offer from any Person relating to
the acquisition of any capital stock or other voting securities, or any
substantial portion of the assets, of the Company (including any acquisition
structured as a merger, consolidation, or share exchange) or (ii) participate
in any discussions or negotiations regarding, furnish any information with
respect to, assist or participate in, or facilitate in any other manner any
effort or attempt by any Person to do or seek any of the foregoing. The
Shareholders will notify Buyer immediately if any Person makes any proposal,
offer, inquiry, or contact with respect to any of the foregoing.
(h) NO TERMINATION OF SHAREHOLDERS'S OBLIGATION BY SUBSEQUENT
INCAPACITY. Shareholders specifically agrees that his obligations hereunder,
including, without limitation, the obligations pursuant to Section hereof, shall
not be eliminated by his or her death or incapacity.
8. POST-CLOSING COVENANTS. The Parties agree as follows with respect
to the period following the Closing.
(a) GENERAL. In case at any time after the Closing any
further action is necessary or desirable to carry out the purposes of this
Agreement, each of the Parties will take such further action (including the
execution and delivery of such further instruments and documents) as any other
Party reasonably may request, all at the sole cost and expense of the
requesting Party (unless the requesting Party is entitled to indemnification
therefor under Section below). The Shareholders acknowledge and agree that from
and after the Closing Buyer will be entitled to possession of all documents,
books, records (including Tax records), agreements, and financial data of any
sort relating to the Company.
(b) LITIGATION SUPPORT. In the event and for so long as any
Party actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving the Company, each of the other Parties will
cooperate with him or it and his or its counsel in the contest or defense, make
available their personnel, and provide such testimony and access to their books
and records as shall be necessary in connection with the contest or defense,
all at the sole cost and expense of the contesting or defending Party (unless
the contesting or defending Party is entitled to indemnification therefor under
ss. below).
(c) TRANSITION. The Shareholders will not take any action
that is designed or intended to have the effect of discouraging any lessor,
licensor, customer, supplier, or other business associate of the Company from
maintaining the same business relationships with the Company after the Closing
as it maintained with the Company prior to the Closing. The Shareholders will
refer all customer inquiries relating to the businesses of the Company to Buyer
from and after the Closing.
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(d) INDEPENDENT ACCOUNTANTS. After the Closing, Shareholders
shall (i) use reasonable efforts to cause the Company's past and present
independent auditors and accounting personnel to make available to Buyer and
its representatives, at Buyer's sole cost and expense, all financial
information, including the right to examine all working papers pertaining to
audits or reviews previously or hereafter made by such auditors, and (ii)
provide such cooperation as Buyer and its representatives may request in
connection with any audit or review of the Company that Buyer may direct its
representatives to make. Without limiting the generality of the foregoing, the
Shareholders agree that they will cooperate with, and cause the Company's past
and present independent auditors, accounting personnel and other necessary
persons to cooperate with Buyer, at the Buyer's sole cost and expense, in the
preparation of any documents filed by Buyer with the U.S. Securities and
Exchange Commission in connection with an offering of securities, to the extent
information about the Company is required therein.
(e) TAX MATTERS. The Shareholders covenant and agree not to
take any action, or fail to take any action, with respect to Taxes, that would
have an adverse effect on Buyer on or after the Closing Date, including,
without limitation, amending or otherwise supplementing any Tax Return or
report of the Company with respect to any period prior to the Closing Date
without the consent of Buyer. If any taxing authority conducts any audit or
investigation relating to the Company prior to the Closing Date, Buyer may, in
its sole election, have the right to supervise such audit or investigation and
provide any response required in connection therewith.
(f) STOCK OPTIONS. Orius has adopted a stock incentive plan
(the "Stock Incentive Plan") pursuant to which stock options and other forms of
stock-based compensation may be awarded to the officers, directors and
employees of Buyer and its subsidiaries. The key employees of the Company shall
be eligible to receive awards under the Stock Incentive Plan of options to
acquire 5,000 shares of Orius common stock. Within 60 days of the Closing, the
officers of the Company shall recommend to the Stock Option Committee under the
Stock Incentive Plan the terms, conditions and amounts of awards to be granted
and the identity of the key employees of the Company to receive such awards,
however, all such awards, and the terms and conditions thereof, shall be
finally determined by the Stock Option Committee.
(g) AUDITED FINANCIAL STATEMENTS. Shareholders shall cause
the Company's auditors to cooperate with Buyer's auditors in the preparation of
audited consolidated balance sheets and statements of income, changes in
stockholders' equity, and cash flow including the audit report thereon as of
and for the three-year period ending December 31, 1998 for the Company. All
costs associated with the preparation and audit of the Company's December 31,
1998 financial statements shall be paid by Buyer.
(h) NON-DISPARAGEMENT. Shareholders agree that they shall not
knowingly make or cause to be made, directly or indirectly, orally or in
writing, any disparaging statements or remarks about the Company, Buyer, Orius
or their respective officers, employees, Affiliates and services. Buyer and
Orius agree that they shall not knowingly make or cause to be made, directly or
indirectly, orally or in writing, any disparaging statements or remarks about
the Shareholders. The restrictions of this section do not apply to any
statements or remarks made or caused to be made, directly or indirectly, prior
to the effective date of this Agreement. The restrictions herein shall not
apply to any statements or remarks made in connection with any judicial
proceeding or pursuant to any court order or subpoena.
9. CONDITIONS TO OBLIGATION TO CLOSE.
(a) CONDITIONS TO OBLIGATION OF BUYER. The obligation of
Buyer to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:
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(i) The representations and warranties set forth in
Section and Section above shall be true and correct in all material respects at
and as of the Closing Date and there shall not have occurred any Material
Adverse Effect;
(ii) The Shareholders and the Company shall have
performed and complied with all of his covenants hereunder in all material
respects through the Closing;
(iii) The Company shall have procured all of the
third party consents specified in Section above;
(iv) No action, suit, or proceeding shall be pending
or threatened before any court or quasi-judicial or administrative agency of
any federal, state, local, or foreign jurisdiction, or before any arbitrator,
wherein an unfavorable injunction, judgment, order, decree, ruling, or charge
would (A) prevent consummation of any of the transactions contemplated by this
Agreement, (B) cause any of the transactions contemplated by this Agreement to
be rescinded following consummation, (C) affect adversely the right of the
Company to own its assets and to operate its businesses (and no such
injunction, judgment, order, decree, ruling, or charge shall be in effect);
(v) The Shareholders shall have delivered to Buyer a
certificate, to the effect that each of the conditions specified above in
Section through is satisfied in all respects;
(vi) The Parties shall have received all other
authorizations, consents, and approvals of governments and governmental
agencies referred to in Section and Section above;
(vii) Buyer shall have received from counsel to the
Shareholders an opinion substantially in form and substance as set forth in
Exhibit attached hereto, addressed to Buyer and dated as of the Closing Date;
(viii) Oldham shall have entered into an Employment
Agreement;
(ix) The Shareholders shall have entered into the
Noncompetition Agreements;
(x) The Shareholders shall have entered into the
Leases;
(xi) J. Dancer shall have entered into the Patent
License Agreement;
(xii) All actions to be taken by the Shareholders in
connection with the consummation of the transactions contemplated hereby and
all certificates, opinions, instruments, and other documents required to effect
the transactions contemplated hereby will be reasonably satisfactory in form
and substance to Buyer.
(xiii) At least five business days prior to the
Closing, Buyer shall have received a balance sheet prepared by the Company,
estimating the assets, liabilities and shareholders' equity of the Company as
of the Closing Date (the "Estimated Closing Balance Sheet"). The Estimated
Closing Balance Sheet shall be prepared consistent with past practices of the
Company. Buyer shall not have objected to, challenged or otherwise repudiated
any of the amounts included in the Estimated Closing Balance Sheet.
(xiv) Buyer shall have received an appraisal, from
an appraiser selected by Buyer, that states that the fair market value of the
Company's tangible assets listed in Section of the
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Disclosure Schedule is at least equal to the book value of such assets
reflected in the Estimated Closing Balance Sheet.
(xv) The Company shall have delivered evidence of
its qualification to do business in each jurisdiction where it is so qualified
and a certificate of good standing issued by the Secretary of State of each
such jurisdiction demonstrating that the Company is in good standing in that
jurisdiction;
(xvi) The board of directors of Buyer shall have
approved the consummation of the transaction contemplated by this Agreement;
and
(xvii) All actions to be taken by the Shareholders
in connection with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form and
substance to Buyer.
(xviii) All of the transactions contemplated by the
Exchange Agreements shall have been consummated. Buyer may waive any condition
specified in this Section if it executes a writing so stating at or prior to
the Closing.
(b) CONDITIONS TO OBLIGATION OF THE SHAREHOLDERS. The
obligation of the Shareholders to consummate the transactions to be performed
by them in connection with the Closing is subject to satisfaction of the
following conditions:
(i) The representations and warranties set forth in
Section and Section above shall be true and correct in all material respects at
and as of the Closing Date;
(ii) Buyer shall have performed and complied with
all of its covenants hereunder in all material respects through the Closing;
(iii) No action, suit, or proceeding shall be
pending or threatened before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction, or before any
arbitrator, wherein an unfavorable injunction, judgment, order, decree, ruling,
or charge would (A) prevent consummation of any of the transactions
contemplated by this Agreement or (B) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation (and no
such injunction, judgment, order, decree, ruling, or charge shall be in
effect);
(iv) Buyer shall have delivered to the Shareholders
a certificate to the effect that each of the conditions specified above in
Section - is satisfied in all respects;
(v) The Parties shall have received all other
authorizations, consents, and approvals of governments and governmental
agencies referred to in Section and Section above;
(vi) The Shareholders shall have received from
counsel to Buyer an opinion substantially in form and substance as set forth in
Exhibit attached hereto, addressed to the Shareholders, and dated as of the
Closing Date;
(vii) Buyer shall have entered into the Employment
Agreements;
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(viii) Buyer shall have (A) repaid the outstanding
debt obligations of the Company personally guaranteed by any of the
Shareholders or (B) caused the Shareholders to be released from any personal
guarantees with respect to such outstanding debt obligations;
(ix) Buyer shall have entered into the Leases;
(x) The Shareholders shall have been released from
their personal obligations relative to any outstanding performance or payment
bonds of the Company or the Buyer shall have made such other arrangements as
may be mutually acceptable to the Shareholders and the Buyer to fully indemnify
the Shareholders with respect to any such obligations.
(xi) On or before 5:00 p.m. MST on February 22,
1999, the Shareholders shall have completed their due diligence examination of
the Buyer and Orius;
(xii) All actions to be taken by Buyer in connection
with consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to
the Shareholders.
(xiii) All of the transactions contemplated by the
Exchange Agreements shall have been consummated.
The Shareholders may waive any condition specified in this Section if they
execute a writing so stating at or prior to the Closing.
10. REMEDIES FOR BREACHES OF THIS AGREEMENT.
(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations, warranties, covenants and agreements of the Parties contained
in this Agreement or in any certificate, document, instrument or agreement
delivered pursuant to this Agreement shall survive the Closing hereunder
(notwithstanding any due diligence investigations that may have been undertaken
by the damaged Party) and continue in full force and effect for three years
from the Closing Date.
(b) INDEMNIFICATION PROVISIONS FOR BENEFIT OF BUYER.
(i) In the event the Shareholders breach (or in the
event that any third party alleges facts that, if true, would mean that the
Shareholders have breached) any of their representations, warranties (or any of
such representations or warranties is untrue or inaccurate), covenants and
agreements contained herein or in any certificate, document, instrument or
agreement delivered pursuant to this Agreement, and, provided that the
Indemnified Buyers (as hereafter defined) make a written claim for
indemnification against the Shareholders pursuant to Section below within the
applicable claim period provided in Section above, then the Shareholders agree
to indemnify Buyer and each of its officers, directors, employees,
representatives and shareholders (the "Indemnified Buyers") from and against
the entirety of any Adverse Consequences the Indemnified Buyers may suffer
through and after the date of the claim for indemnification (including any
Adverse Consequences the Indemnified Buyers may suffer after the end of any
applicable claim period) resulting from, arising out of, relating to, in the
nature of, or caused by the breach (or the alleged breach) during any
applicable claim period; provided, however, that the Shareholders shall not
have any obligation to indemnify the Indemnified Buyer from and against any
Adverse Consequences resulting from, arising out of, relating to, in the nature
of, or caused by the breach (or alleged breach) of any representation or
warranty of the Shareholders contained in Section above
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(other than those in Section 50(a)--5(j), 5(2) and 5(y)): (A) until the
Indemnified Buyer has suffered Adverse Consequences by reason of all such
breaches (or alleged breaches) in excess of a $250,000 aggregate deductible
(after which point the Shareholders will be obligated only to indemnify the
Indemnified Buyer from and against Adverse Consequences in excess of that
amount) or thereafter (B) to the extent that the Adverse Consequences the
Indemnified Buyer has suffered by reason of all such breaches exceeds a
$24,750,000 aggregate ceiling (after which point the Shareholders will have no
obligation to indemnify the Indemnified Buyer from and against further such
Adverse Consequences).
(ii) The Shareholders agree to indemnify the
Indemnified Buyers from and against the entirety of any Adverse Consequences
they may suffer resulting from, arising out of, relating to, in the nature of,
or caused by the activities of any entity which at any time has been owned, in
whole or in part, by the Company or under common control with the Company.
(iii) Without limiting any other indemnification
provided in this Section , the Shareholders agree to indemnify the Indemnified
Buyers from and against the entirety of any Adverse Consequences they may
suffer as a result of a taxing authority taking the position that any former or
current subcontractor of the Company should have been, at any time prior to the
Closing Date, treated as an employee of the Company.
(iv) All of the indemnification obligations of
Shareholders under this Section shall be joint and several.
(c) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE
SHAREHOLDERS.
In the event Buyer breaches (or in the event any
third party alleges facts that, if true, would mean Buyer had breached) any of
its representations, warranties (or any of such representations or warranties
is untrue or inaccurate), covenants and agreements contained herein (including,
without limitation, the indemnification provisions of Section and Section or
the payment obligations of the Company set forth on Section -Permitted
Distributions of the Disclosure Schedule) or in any certificate, document,
instrument or agreement delivered pursuant to this Agreement, and, provided
that the Shareholders makes a written claim for indemnification against Buyer
pursuant to Section below within the applicable claim period provided in
Section 10(a) above, then Buyer and Orius, jointly and severally, agree to
indemnify the Shareholders and each of their representatives (the "Indemnified
Shareholders") from and against the entirety of any Adverse Consequences the
Indemnified Shareholders may suffer through and after the date of the claim for
indemnification (including any Adverse Consequences the Indemnified
Shareholders may suffer after the end of any applicable claim period) resulting
from, arising out of, relating to, in the nature of, or caused by the breach
(or the alleged breach).
(d) MATTERS INVOLVING THIRD PARTIES.
(i) If any third party shall notify any party
entitled to indemnification hereunder (the "Indemnified Party") with respect to
any matter (a "Third Party Claim") which may give rise to a claim for
indemnification against any other Party (the "Indemnifying Party") under this
Section then the Indemnified Party shall notify each Indemnifying Party thereof
in writing within 120 days of the receipt of the third party notification.
(ii) Any Indemnifying Party will have the right to
defend the Indemnified Party against the Third Party Claim with counsel of its
choice reasonably satisfactory to the Indemnified Party so long as (A) the
Indemnifying Party notifies the Indemnified Party in writing within 30 days
after the Indemnified Party has given notice of the Third Party Claim that the
Indemnifying Party will
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indemnify the Indemnified Party from and against the entirety of any Adverse
Consequences the Indemnified Party may suffer resulting from, arising out of,
relating to, in the nature of, or caused by the Third Party Claim, (B) the
Indemnifying Party provides the Indemnified Party with evidence reasonably
acceptable to the Indemnified Party that the Indemnifying Party will have the
financial resources to defend against the Third Party Claim and fulfill its
indemnification obligations hereunder, (C) the Third Party Claim involves only
money damages and does not seek an injunction or other equitable relief, (D)
settlement of, or an adverse judgment with respect to, the Third Party Claim is
not, in the good faith judgment of the Indemnified Party, likely to establish a
precedential custom or practice materially adverse to the continuing business
interests of the Indemnified Party, (E) the named parties to the Third Party
Claim do not include both the Indemnified Party and the Indemnifying Party, and
(F) the Indemnifying Party conducts the defense of the Third Party Claim
actively and diligently.
(iii) So long as the Indemnifying Party is
conducting the defense of the Third Party Claim in accordance with Section
above, (A) the Indemnified Party may retain separate co-counsel at its sole
cost and expense and participate in the defense of the Third Party Claim, (B)
the Indemnified Party will not consent to the entry of any judgment or enter
into any settlement with respect to the Third Party Claim without the prior
written consent of the Indemnifying Party (not to be withheld unreasonably),
and (C) the Indemnifying Party will not consent to the entry of any judgment or
enter into any settlement with respect to the Third Party Claim without the
prior written consent of the Indemnified Party (not to be withheld
unreasonably).
(iv) In the event any of the conditions in Section
above is or becomes unsatisfied, however, (A) the Indemnified Party may defend
against, and consent to the entry of any judgment or enter into any settlement
with respect to, the Third Party Claim in any commercially reasonable manner
(and the Indemnified Party need not consult with, or obtain any consent from,
any Indemnifying Party in connection therewith), (B) the Indemnifying Parties
will reimburse the Indemnified Party promptly and periodically for the costs of
defending against the Third Party Claim (including reasonable attorneys' fees
and expenses), and (C) the Indemnifying Parties will remain responsible for any
Adverse Consequences the Indemnified Party may suffer resulting from, arising
out of, relating to, in the nature of, or caused by the Third Party Claim to
the fullest extent provided in this Section .
(e) DETERMINATION OF ADVERSE CONSEQUENCES. The Parties shall
make appropriate adjustments for insurance coverage and take into account the
time cost of money (using the Applicable Rate as the discount rate) in
determining Adverse Consequences for purposes of this Section . All
indemnification payments under this Section shall be deemed adjustments to the
Consideration.
(f) OTHER INDEMNIFICATION PROVISIONS. The foregoing
indemnification provisions are in addition to, and not in derogation of, any
statutory, equitable, or common law remedy (including without limitation any
such remedy arising under Environmental, Health, and Safety Requirements) any
Party may have with respect to the Company, or the transactions contemplated by
this Agreement, subject, in each case, to any applicable insurance coverage.
Each Shareholder hereby agrees that he will not make any claim for
indemnification against the Company by reason of the fact that he was a
director, officer, employee, or agent of the Company or was serving at the
request of the Company as a partner, trustee, director, officer, employee, or
agent of another entity (whether such claim is for judgments, damages,
penalties, fines, costs, amounts paid in settlement, losses, expenses, or
otherwise and whether such claim is pursuant to any statute, charter document,
bylaw, agreement, or otherwise) with respect to any action, suit, proceeding,
complaint, claim, or demand brought by the Buyer against such Shareholder
(whether such action, suit, proceeding, complaint, claim, or demand is pursuant
to this Agreement, applicable law, or otherwise).
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11. TAX MATTERS. The following provisions shall govern the allocation
of responsibility as between Buyer and Shareholders for certain tax matters
following the Closing Date:
(a) TAX PERIODS ENDING ON OR BEFORE THE CLOSING DATE.
Shareholders shall prepare or cause to be prepared and timely file or cause to
be timely filed all Tax Returns for the Company for all periods ending on or
prior to the Closing Date (the "Pre-Closing Period"). Such Tax Returns shall be
prepared by treating items on such Tax Return in a manner consistent with the
past practices with respect to such items, unless otherwise required by law.
Shareholders shall permit Buyer to review and comment on each such Tax Return
described in the preceding sentence prior to filing. To the extent permitted by
applicable law, Shareholders shall include any income, gain, loss, deduction or
other Tax items for such periods on their Tax Returns in a manner consistent
with the Schedule K-1s furnished to the Shareholders for such periods.
Shareholders shall reimburse Buyer for any Taxes of the Company with respect to
all Pre-Closing Periods ending on or before December 31, 1998, within fifteen
(15) days after payment by Buyer or the Company of such Taxes to the extent
such Taxes are not reflected in the reserve for Tax Liability shown on the face
of the Most Recent Balance Sheet. The Company shall pay any Taxes to the extent
such Taxes are reflected in the reserve for Tax Liability shown on the face of
the Most Recent Balance Sheet.
(b) TAX PERIODS BEGINNING BEFORE AND ENDING AFTER THE CLOSING
DATE. Buyer shall prepare or cause to be prepared and file or cause to be filed
any Tax Returns of the Company for Tax periods which begin before the Closing
Date and end after the Closing Date. Buyer shall permit Shareholders to review
and comment on each such Tax Return described in the preceding sentence prior
to filing. Shareholders shall pay to Buyer within fifteen (15) days after the
date on which Taxes are paid with respect to such periods an amount equal to
the portion of such Taxes which relates to the portion of such Taxable period
ending on the Closing Date to the extent such Taxes are not reflected in the
reserve for Tax Liability shown on the face of the Estimated Closing Balance
Sheet. For purposes of this Section, in the case of any Taxes that are imposed
on a periodic basis and are payable for a Taxable period that includes (but
does not end on) the Closing Date, the portion of such Tax which relates to the
portion of such Taxable period ending on the Closing Date shall (x) in the case
of any personal property Taxes, be deemed to be the amount of such Tax for the
entire Taxable period multiplied by a fraction the numerator of which is the
number of days in the Taxable period ending on the Closing Date and the
denominator of which is the number of days in the entire Taxable period, and
(y) in the case of any other Tax be deemed equal to the amount which would be
payable if the relevant Taxable period ended on the Closing Date. Any credits
or refunds relating to a Taxable period that begins before and ends after the
Closing Date shall be taken into account as though the relevant Taxable period
ended on the Closing Date. All determinations necessary to give effect to the
foregoing allocations shall be made in a manner consistent with prior practice
of the Company.
(c) COOPERATION ON TAX MATTERS.
(i) Buyer, the Company and Shareholders shall
cooperate fully, as and to the extent reasonably requested by the other party,
in connection with the filing of Tax Returns pursuant to this Section and any
audit, litigation or other proceeding with respect to Taxes. Such cooperation
shall include the retention and (upon the other party's request) the provision
of records and information which are reasonably relevant to any such audit,
litigation or other proceeding and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder. The Company and Shareholders agree (A) to retain
all books and records with respect to Tax matters pertinent to the Company
relating to any taxable period beginning before the Closing Date until the
expiration of the statute of limitations (and, to the extent notified by Buyer
or Shareholders, any extensions thereof) of the respective taxable periods, and
to abide by all record retention agreements
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entered into with any taxing authority, and (B) to give the other party
reasonable written notice prior to transferring, destroying or discarding any
such books and records and, if the other party so requests, the Company or
Shareholders, as the case may be, shall allow the other party to take
possession of such books and records.
(ii) Buyer and Shareholders further agree, upon
request, to use their best efforts to obtain any certificate or other document
from any governmental authority or any other Person as may be necessary to
mitigate, reduce or eliminate any Tax that could be imposed (including, but not
limited to, with respect to the transactions contemplated hereby).
(iii) Buyer and Shareholders further agree, upon
request, to provide the other party with all information that either party may
be required to report pursuant to Section 6043 of the Code and all Treasury
Department Regulations promulgated thereunder.
(d) TAX SHARING AGREEMENTS. All tax sharing agreements or
similar agreements with respect to or involving the Company shall be terminated
as of the Closing Date and, after the Closing Date, the Company shall not be
bound thereby or have any liability thereunder.
(e) TERMINATION OF S CORPORATION STATUS.
(i) The Shareholders acknowledge that as a result of
the consummation of the transactions contemplated by this Agreement, the
Company's S Corporation status will terminate as of the Closing Date. The
Shareholders will elect under Section 1362(e)(3) of the Code not to have the pro
rata allocation method of Section 1362(e)(2) of the Code apply to the Company's
final taxable year as an S Corporation. The Parties had initially contemplated
the termination of the Company's S Corporation status effective December 31,
1998. However, the Company's S Corporation status will continue until the
Closing Date to permit Buyer to make the Section 338(h)(10) Election. The
Parties therefore acknowledge that the Shareholders will be required to
recognize income for the period from January 1, 1999 through the Closing Date
and must properly report that additional income on tax returns in order to
accommodate the Buyer's desire to make the Section 338(h)(10) Election. In
order to eliminate the burden of the additional Taxes, expenses and costs that
the Shareholders incur in order to accommodate Buyer, and to ensure that the
Shareholders do not incur any net financial loss as a result of these actions,
Buyer and Orius shall jointly and severally indemnify the Shareholders for any
Adverse Consequences, included but not limited to any Liability for Taxes and
other costs and expenses resulting from these actions. Accordingly, each
Shareholder shall receive a payment from the Company equal to such
Shareholder's Tax Indemnification Amount (as defined below). To the extent
possible, such payment shall be treated as a distribution from the Company's
accumulated adjustment account pursuant to Code Section 1371(e)(1). Each
Shareholder's Tax Indemnification Amount shall be estimated by such Shareholder
and the computation of such Tax Indemnification Amount shall be provided to the
Company and, upon agreement by the Company with such estimate, shall be paid
(the "Estimated Tax Indemnification Amount") to such Shareholder on April 10,
1999. Such Shareholder's Tax Indemnification Amount shall be finally computed
on the day which is the later of (A) the day which is one year from the Closing
Date, or (B) the due date for the filing of the Company's Tax Return for its
final taxable year as an S Corporation (including extensions). On such day, if
such Shareholder's Tax Indemnification Amount exceeds his Estimated Tax
Indemnification Amount, the Company shall pay such Shareholder the amount of
such excess; or if such Shareholder's Estimated Tax Indemnification Amount
exceeds his Tax Indemnification Amount, the Shareholder shall pay to the
Company such excess.
(ii) For purposes of this Agreement, the term "Tax
Indemnification Amount" shall mean the taxable income of the Company as
computed for federal income tax purposes for its
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taxable year beginning on January 1, 1999 and ending on the Closing Date
multiplied by such Shareholder's combined federal and state effective tax rate,
with the product reduced by the amount of tax benefit, if any, such Shareholder
will have received due to an increase in such Shareholder's tax basis in his
shares resulting from his share of the Company's taxable income for the period
from January 1, 1999 to the Closing Date. The Tax Indemnification Amount also
shall include any other Adverse Consequences, including reasonable costs and
expenses the Shareholder has incurred as a result of the Company's S
Corporation status not terminating as contemplated on December 31, 1998. For
purposes of this Section , "combined federal and state effective tax rate"
means the combined federal, state and local tax rates after giving effect to
the deduction for state and local taxes in computing federal taxes.
(f) CERTAIN TAXES. All transfer, documentary, sales, use,
stamp, registration and other such Taxes and fees (including any penalties and
interest) incurred in connection with this Agreement (other than any of such
Taxes or fees that are a result of the Section 338(h)(10) Election), shall be
paid by Shareholders when due, and Shareholders will, at their own expense,
file all necessary Tax Returns and other documentation with respect to all such
transfer, documentary, sales, use, stamp, registration and other Taxes and
fees, and, if required by applicable law, Buyer will, and will cause its
affiliates to, join in the execution of any such Tax Returns and other
documentation.
(g) SECTION 338(H)(10) ELECTION. The Company and each of the
Shareholders will join with Buyer in making an election under Section
338(h)(10) of the Code (and any corresponding election under state, local and
foreign tax law) with respect to the purchase and sale of the stock of the
Company hereunder (a "Section 338(h)(10) Election"). The Shareholders will
include any income, gain, loss, deduction or other tax item resulting from the
Section 338(h)(10) Election on their Tax Returns to the extent permitted by
applicable law. The Buyer and Orius, jointly and severally, shall indemnify
each Shareholder against any Adverse Consequences that such Shareholder shall
incur by reason of the Section 338(h)(10) Election being made. The amount
payable pursuant to the preceding sentence shall be calculated and paid by the
Buyer to such Shareholder on or before April 10, 1999 and shall be treated by
the parties as additional purchase price for such Shareholder's Company Shares.
(h) ALLOCATION OF PURCHASE PRICE. Buyer, the Company and the
Shareholders agree that the Consideration and the liabilities of the Company
(plus other relevant items) will be allocated to the assets of the Company for
all purposes (including Tax and financial accounting) as shown on Exhibit
hereof. Buyer, the Company and the Shareholders will file all Tax Returns
(including amended returns and claims for refund) and the information reports
in a manner consistent with such allocation.
(i) S CORPORATION STATUS. Neither the Company nor the
Shareholders will revoke the Company's election to be taxed as an S corporation
within the meaning of Sections 1361 and 1362 of the Code. Neither the Company
nor the Shareholders will take or allow any action (other than the sale of the
Company's stock pursuant to this Agreement) that would result in the termination
of the Company's status as a validly electing S corporation within the meaning
of Sections 1361 and 1362 of the Code.
(j) ESCROW. Any amounts payable by the Company pursuant to
Sections and shall be paid first from the amount of $600,000 to be held in
escrow pursuant to the escrow agreement, in a form substantially identical to
that attached as Exhibit . Any disputes as to the amounts owed pursuant to
Section or Section shall be governed by the following procedures:
(i) If the Shareholders have any objections to the
calculation of the amount payable to Shareholders pursuant to Section or
Section , they will deliver a detailed statement describing their objections to
the Buyer within 30 days after receiving the notice from the Buyer of the
amount owned. The Buyer and the Shareholders will use reasonable efforts to
resolve any such objections
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themselves. If the Parties do not obtain a final resolution within 30 days
after the Buyer has received the statement of objections, however, the Buyer
and Shareholders will select an accounting firm mutually acceptable to them to
resolve any remaining objections. If the Buyer and the Shareholders are unable
to agree on the choice of an accounting firm, they will select a
nationally-recognized accounting firm by lot (after excluding their respective
regular outside accounting firms). The determination of any accounting firm so
selected will be set forth in writing and will be conclusive and binding upon
the Parties. The Buyer will revise the appropriate tax returns so as
appropriate to reflect the resolution of any objections thereto pursuant to
this Section .
(ii) In the event the Parties submit any unresolved
objections to an accounting firm for resolution as provided in Section above,
any expenses relating to the engagement of the accounting firm shall be
allocated between the Shareholders and the Buyer by the accounting firm in
proportion to the amount in dispute which is decided in favor of the
challenging party.
(iii) The Buyer will make the work papers and
back-up materials used in preparing its calculations hereunder available to the
Shareholders and their accountants and other representatives at reasonable
times and upon reasonable notice during (A) the preparation by the Buyer of the
relevant tax documents (B) review by the Shareholders of the such documents and
(C) the resolution by the Parties of any objections thereto.
12. TERMINATION.
(a) TERMINATION OF AGREEMENT. The Parties may terminate this
Agreement as provided below:
(i) Buyer and the Shareholders may terminate this
Agreement by mutual written consent at any time prior to the Closing;
(ii) Buyer may terminate this Agreement by giving
written notice to the Shareholders at any time prior to the Closing (A) in the
event the Shareholders have breached any representation, warranty, or covenant
contained in this Agreement in any material respect, Buyer has notified the
Shareholders of the breach, and the breach has continued without cure for a
period of 30 days after the notice of breach or (B) if the Closing shall not
have occurred on or before February 26, 1999 by reason of the failure of any
condition precedent under ss. hereof (unless the failure results primarily from
Buyer itself breaching any representation, warranty, or covenant contained in
this Agreement) or (C) in any event, if the Closing shall not have occurred on
or before March 28, 1999; and
(iii) the Shareholders may terminate this Agreement
by giving written notice to Buyer at any time prior to the Closing (A) in the
event Buyer has breached any representation, warranty, or covenant contained in
this Agreement in any material respect, the Shareholders have notified Buyer of
the breach, and the breach has continued without cure for a period of 30 days
after the notice of breach or (B) if the Closing shall not have occurred on or
before February 26, 1999 by reason of the failure of any condition precedent
under Section hereof (unless the failure results primarily from the
Shareholders himself breaching any representation, warranty, or covenant
contained in this Agreement) or (C) in any event, if the Closing shall not have
occurred on or before March 28, 1999.
(b) EFFECT OF TERMINATION. If any Party terminates this
Agreement pursuant to Section above, all rights and obligations of the Parties
hereunder shall terminate without any Liability of any Party to any other
Party.
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13. MISCELLANEOUS.
(a) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party shall
issue any press release or make any public announcement relating to the subject
matter of this Agreement prior to the Closing without the prior written
approval of Buyer and the Shareholders; provided, however, that any Party may
make any public disclosure it believes in good faith is required by applicable
law or any listing or trading agreement concerning its publicly-traded
securities (in which case the disclosing Party will use its best efforts to
advise the other Parties prior to making the disclosure).
(b) NO THIRD-PARTY BENEFICIARIES. This Agreement shall not
confer any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns and the Indemnified Parties
referred to in Section hereof.
(c) ENTIRE AGREEMENT. This Agreement (including the documents
referred to herein) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements, or representations by or among
the Parties, written or oral, to the extent they related in any way to the
subject matter hereof.
(d) SUCCESSION AND ASSIGNMENT. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the Parties
named herein and their respective successors and permitted assigns. No Party
may assign either this Agreement or any of his or its rights, interests, or
obligations hereunder without the prior written approval of Buyer and the
Shareholders; provided, however, that Buyer may (i) assign any or all of its
rights and interests hereunder to one or more of its Affiliates, (ii) designate
one or more of its Affiliates to perform its obligations hereunder (in any or
all of which cases Buyer nonetheless shall remain responsible for the
performance of all of its obligations hereunder) and (iii) without the approval
of the Shareholders, assign its rights and interests hereunder to its lenders
(and any agent for the lenders), and the Parties consent to any exercise by
such lenders (and such agents) of their rights and remedies with respect to
such collateral.
(e) COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) HEADINGS. The section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
(g) NOTICES. All notices, requests, demands, claims, and
other communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if (and then
two business days after) it is sent by registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended recipient as
set forth below:
If to the Shareholders: Copy to:
----------------------- --------
Xxxxx X. and Xxxx X. Dancer D. Xxxx Xxxxxxxx
00000 Xxxxxxxx Xxxx The Golden Eagle at Forest River
Xxxxx, XX 00000 0000 Xxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxx X. and Xxxx X. Dancer Xxxxx, XX 00000
0000 X. Xxxxxx Xxxx, Xxx 000 208-344-8600
Star, ID 83669
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If to Buyer: Copy to:
------------ --------
NATG Holdings, LLC Holland & Knight LLP
0000 Xxxxx Xxx, Xxxxx 000 One Xxxx Xxxxxxx Xxxxxxxxx
Xxxx Xxxx Xxxxx, XX 00000 Xxxx Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx Attn: Xxxx Xxxxxx, Esq.
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been
duly given unless and until it actually is received by the intended recipient.
Any Party may change the address to which notices, requests, demands, claims,
and other communications hereunder are to be delivered by giving the other
Parties notice in the manner herein set forth.
(h) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Florida without
giving effect to any choice or conflict of law provision or rule (whether of
the State of Florida or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Florida.
(i) AMENDMENTS AND WAIVERS. No amendment of any provision of
this Agreement shall be valid unless the same shall be in writing and signed by
Buyer and the Shareholders. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(j) SEVERABILITY. Any term or provision of this Agreement
that is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.
(k) EXPENSES. Each of the Parties will bear his or its own
costs and expenses (including legal fees and expenses) incurred in connection
with this Agreement and the transactions contemplated hereby. The Shareholders
agree that, after December 31, 1998, the Company has not borne nor will bear
any of the Shareholders' costs and expenses (including, without limitation, any
of their legal, accounting or investment banking fees and expenses) in
connection with this Agreement or any of the transactions contemplated hereby.
(l) CONSTRUCTION. The Parties have participated jointly in
the negotiation of this Agreement. In the event an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as if
drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local,
or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. The Parties intend
that each representation, warranty, and covenant contained herein shall have
independent significance. If any Party has breached any representation,
warranty, or covenant contained herein in any respect, the fact that there
exists another representation, warranty, or covenant relating to the same
subject matter (regardless of the
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relative levels of specificity) which the Party has not breached shall not
detract from or mitigate the fact that the Party is in breach of the first
representation, warranty, or covenant.
(m) INCORPORATION OF EXHIBITS, ANNEXES, AND SCHEDULES. The
Exhibits, Annexes, Schedules and Certificates identified in this Agreement are
incorporated herein by reference and made a part hereof.
(n) SPECIFIC PERFORMANCE. Each of the Parties acknowledges
and agrees that the other Parties would be damaged irreparably in the event any
of the provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, each of the Parties
agrees that the other Parties shall be entitled to an injunction or injunctions
to prevent breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions hereof in any action
instituted in any court of the United States or any state thereof having
jurisdiction over the Parties and the matter (subject to the provisions set
forth in Section below), in addition to any other remedy to which they may be
entitled, at law or in equity.
(o) SUBMISSION TO JURISDICTION. Each of the Parties submits
to the jurisdiction of any state or federal court sitting in Palm Beach County,
Florida or Ada County, Idaho, in any action or proceeding arising out of or
relating to this Agreement and agrees that all claims in respect of the action
or proceeding shall be heard and determined in any such court. Each of the
Parties waives any objection to the maintenance of any action or proceeding so
brought and waives any bond, surety, or other security that might be required
of any other Party with respect thereto. Any Party may make service on any
other Party by sending or delivering a copy of the process to the Party to be
served at the address and in the manner provided for the giving of notices in
Section above. Each Party agrees that a final judgment in any action or
proceeding so brought shall be conclusive and may be enforced by suit on the
judgment or in any other manner provided by law or at equity. In any action or
proceeding arising out of or relating to this Agreement, the prevailing party
shall be entitled to recover reasonable attorney's fees and costs from the other
party to the action or proceeding.
(p) WAIVER OF JURY TRIAL. THE PARTIES HEREBY IRREVOCABLY
WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY AND TO
THE FULLEST EXTENT PERMITTED BY LAW WAIVE ANY RIGHTS THAT THEY MAY HAVE TO
CLAIM OR RECEIVE SPECIAL DAMAGES IN CONNECTION WITH ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
*****
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
BUYER
NATG HOLDINGS, LLC
By:
--------------------------------------
Xxxxxxx X. Xxxxxxxx
President
SHAREHOLDERS:
------------------------------------------
Xxxxx X. Dancer
------------------------------------------
Xxxxxx X. Dancer
------------------------------------------
Xxxx X. Dancer
------------------------------------------
Xxxx X. Dancer
ORIUS:
ORIUS CORP.
By:
--------------------------------------
Xxxxxxx X. Xxxxxxxx
President
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