SECURITIES PURCHASE AGREEMENT by and among UIL HOLDINGS CORPORATION, XCELECOM, INC. and ODEC HOLDING CORP. October 30, 2006
EXHIBIT
2.5
EXECUTION
COPY
Β
Β
Β
by
and among
Β
UIL
HOLDINGS CORPORATION,
Β
XCELECOM,
INC.
Β
and
Β
Β
ODEC
HOLDING CORP.
Β
October
30, 2006
Β
TABLE
OF CONTENTS
Β
1.
|
DEFINITIONS
|
1
|
|
Β | Β | Β | |
2.
|
PURCHASE
AND SALE OF THE COMPANY SHARES
|
5
|
|
Β | Β | Β | |
Β |
(A)
Basic Transaction
|
5
|
|
Β |
(B)
Purchase Price
|
5
|
|
Β | Β |
(i)
Closing Payment
|
5
|
Β | Β |
(ii)
Contingent Consideration
|
6
|
Β |
(C)
The Closing
|
7
|
|
Β |
(D)
Deliveries at the Closing
|
7
|
|
Β |
(E)
Preliminary Balance Sheet
|
7
|
|
Β | Β | Β | |
3.
|
REPRESENTATIONS
AND WARRANTIES CONCERNING THE SELLER
|
Β | |
Β |
ENTITIES
AND THE BUYER
|
7
|
|
Β | Β | Β | |
Β |
(A)
Representations and Warranties of the Seller Entities
|
7
|
|
Β |
(B)
Representations and warranties of the Buyer
|
9
|
|
Β | Β | Β | |
REPRESENTATIONS
AND WARRANTIES CONCERNING THE COMPANY
|
11
|
||
Β | Β | Β | |
Β |
(A)
Organization of the Company
|
11
|
|
Β |
(B)
Capitalization
|
11
|
|
Β |
(C)
Noncontravention
|
11
|
|
Β |
(D)
Brokerβs Fees
|
12
|
|
Β |
(E)
Title to Assets
|
12
|
|
Β |
(F)
Financial Statements
|
12
|
|
Β |
(G)
Undisclosed Liabilities
|
12
|
|
Β |
(H)
Events Subsequent to Most Recent Fiscal Month End
|
12
|
|
Β |
(I)
Legal Compliance
|
13
|
|
Β |
(J)
Tax Matters
|
13
|
|
Β |
(K)
Real Property
|
14
|
ii
Β |
(L)
Intellectual Property
|
15
|
Β |
(M)
Contracts
|
16
|
Β |
(N)
Guaranties
|
17
|
Β |
(O)
Tangible Assets
|
17
|
Β |
(P)
Litigation
|
17
|
Β |
(Q)
Employees
|
17
|
Β |
(R)
Employee Benefits
|
18
|
Β |
(S)
Environmental, Health and Safety Matters
|
19
|
Β |
(T)
Notes and Accounts Receivable
|
20
|
Β |
(U)
Powers of Attorney
|
20
|
Β |
(V)
Insurance
|
20
|
Β |
(W)
Intercompany Liabilities
|
20
|
Β |
(X)
Disclosure
|
20
|
Β |
(Y)
Disclaimer of Other Representations and Warranties
|
20
|
Β | Β | Β |
5.
|
Intentionally
omitted
|
20
|
Β | Β | Β |
6.
|
POST-CLOSING
CONVENANTS
|
20
|
Β | Β | Β |
Β |
(A)
General
|
20
|
Β |
(B)
Litigation Support
|
21
|
Β |
(C)
Transition
|
21
|
Β |
(D)
Collective Bargaining Agreements and Related Obligations
|
21
|
Β |
(E)
Employee Benefits Plan
|
21
|
Β |
(F)
Confidentiality
|
22
|
Β |
(G)
Covenant not to Compete
|
23
|
Β |
(H)
Access to Information
|
23
|
Β |
(I)
Nonassignable Contracts and Permits
|
23
|
Β |
(J)
Surety Bonds
|
23
|
Β
iii
Β | Β | Β |
7.
|
CONDITIONS
TO OBLIGATION TO CLOSE
|
23
|
Β | Β | Β |
Β |
(A)
Conditions to Obligation of the Buyer
|
23
|
Β |
(B)
Conditions to Obligation of the Seller
|
25
|
Β | Β | Β |
8.
|
REMEDIES
FOR BREACHES OF THIS AGREEMENT
|
25
|
Β | Β | Β |
Β |
(A)
Survival
|
25
|
Β |
(B)
Indemnification Provisions for Benefits of the Buyer
|
25
|
Β |
(C)
Indemnification Provisions for Benefits of the Seller Entities and
Their
Affiliates
|
27
|
Β |
(D)
Limitations
|
27
|
Β |
(E)
Losses Net of Insurance, Etc.
|
28
|
Β |
(F)
Termination of Indemnification
|
29
|
Β |
(G)
Procedures Relating to Indemnification
|
29
|
Β |
(H)
Exclusive Remedy
|
30
|
Β |
(I)
Collateral Sources
|
30
|
Β |
(J)
Order of Priority
|
30
|
Β |
(K)
Mitigation
|
30
|
Β |
(L)
Stop-Loss Protection for the Benefit of the Buyer
|
30
|
Β | Β | Β |
9.
|
TAX
MATTERS
|
31
|
Β | Β | Β |
Β |
(A)
Consolidated Return
|
31
|
Β |
(B)
Tax Periods Ending on or Before the Closing Date
|
31
|
Β |
(C)
Tax Periods Beginning Before and Ending After the Closing
Date
|
31
|
Β |
(D)
Refund and Tax Benefits
|
32
|
Β |
(E)
Cooperation on Tax Matters
|
32
|
Β |
(F)
Tax Sharing Agreements
|
33
|
Β |
(G)
Transfer Taxes
|
33
|
Β |
(H)
Representation
|
33
|
Β |
(I)
Confidentiality
|
34
|
Β |
(J)
Section 338 Election
|
34
|
iv
10.
|
TERMINATION
|
35
|
Β | Β | Β |
Β |
(A)
Termination of Agreement
|
35
|
Β |
(B)
Effect of Termination
|
35
|
11.
|
MISCELLANEOUS
|
36
|
Β | Β | Β |
Β |
(A)
Press Releases and Public Announcements
|
36
|
Β |
(B)
No Third-Party Beneficiaries
|
36
|
Β |
(C)
Entire Agreement
|
36
|
Β |
(D)
Succession and Assignment
|
36
|
Β |
(E)
Counterparts
|
36
|
Β |
(F)
Headings
|
36
|
Β |
(G)
Notices
|
36
|
Β |
(H)
Governing Law
|
37
|
Β |
(I)
Venue
|
37
|
Β |
(J)
Waiver of Jury Trial
|
37
|
Β |
(K)
Amendments and Waivers
|
37
|
Β |
(L)
Severability
|
37
|
Β |
(M)
Expenses
|
38
|
Β |
(N)
Construction
|
38
|
Β |
(O)
Incorporation of Exhibits and Schedules
|
38
|
Β | Β | Β |
v
Β
SECURITIES
PURCHASE AGREEMENT, entered as of October 30, 2006, by and among ODEC Holding
Corp., a Pennsylvania, corporation, or its permitted assignee (the βBuyerβ),
UIL
Holdings Corporation, a Connecticut corporation (the βParentβ)
and
Xcelecom, Inc., a Connecticut corporation (the βSellerβ
and
together with the Parent, the βSeller
Entitiesβ).
The
Buyer and the Seller Entities are referred to collectively herein as the
βPartiesβ
and
individually as a βPartyβ.
Β
WHEREAS,
this Agreement contemplates a transaction in which the Buyer will purchase
from
the Seller, and the Seller will sell to the Buyer, all of the outstanding
capital stock of Xxxxxxxxxxxx ElectricalΒ (as
defined below) (the βCompanyβ),
in
return for the consideration set forth herein.
Β
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.
Β
1.Β Β DEFINITIONS.
Β
βAccountβ
or
the
"Accounts"
has the
meaning set forth in Section 2(b)(ii)(A) below.
Β
βAdverse
Consequencesβ
means
all actions, suits, proceedings, hearings, investigations, charges, complaints,
claims, demands, injunctions, judgments, orders, decrees, rulings, damages,
dues, penalties, fines, costs, reasonable amounts paid in settlement,
liabilities, obligations, taxes, liens, losses, expenses, and fees, including
court costs and reasonable attorneys' fees and expenses.
Β
βAgreementβ
means
this Securities Purchase Agreement.
Β
βAffiliateβ
has
the
meaning set forth in Rule 12b-2 of the regulations promulgated under the
Securities Exchange Act.
Β
βAffiliated
Groupβ
means
any affiliated group within the meaning of Code Β§1504(a) or any similar group
defined under a similar provision of state, local, or foreign law.
Β
βAnnual
Financial Statementsβ
has
the
meaning set forth in Section 4(f) below.
Β
βBank
Guaranteeβ
means
the guarantee of the Company under the Credit Facility.
Β
βBenefit
Plansβ
has
the
meaning set forth in Section 6(e)(i) below.
Β
βBondsβ
has
the
meaning set forth in Section 6(j) below.
Β
βXxxx
Accountβ
has
the
meaning set forth in Section 2(b)(ii)(A) below.
Β
βBuyerβ
has
the
meaning set forth in the preface above.
Β
βBuyer
Disclosure Letterβ
means
the disclosure letter provided by the Buyer and attached hereto as Annex
A.
Β
βBuyer
Welfare Plansβ
means
any welfare plan as defined in ERISA Section 3(1) which the Buyer maintains
or
to which the Buyer contributes on or after the Closing.
Β
βClosingβ
has
the
meaning set forth in Section 2(c) below.
Β
βClosing
Dateβ
has
the
meaning set forth in Section 2(c) below.
Β
1
βClosing
Paymentβ
has
the
meaning set forth in Section 2(b)(i) below.
Β
βCodeβ
means
the Internal Revenue Code of 1986, as amended.
Β
βCollateral
Sourceβ
has
the
meaning set forth in Section 8(e) below.
Β
βCollective
Bargaining Agreement(s)β
has
the
meaning set forth in Section 4(m)(vii) below.
Β
βCompanyβ
has
the
meaning set forth in the preface above.
Β
βCompany
Balance Sheetβ
means
a
periodic balance sheet produced by the Seller in respect of the Company in
accordance with past procedures and practices.
Β
βCompany
Shareβ
means
any share of the common stock, $100 par value per share, of Xxxxxxxxxxxx
Electrical.
Β
βConfidential
Informationβ
means
any written, oral or visual information in any medium concerning the businesses
and affairs of the Company or any Party that is not already generally available
to the public or, under the circumstances, should reasonably be considered
confidential or proprietary.
Β
"Contingent
Consideration"
has the
meaning set forth in Section 2(b)(ii)(A) below.
Β
βCredit
Facilityβ
means
that Amended and Restated Credit Agreement, dated as of October 25, 2002, as
amended to date, among Bank of America, N.A., successor by merger to Fleet
National Bank (βBank of Americaβ) and the other lending institutions named
therein, the Seller and Bank of America, as agent for itself and such other
lending institutions.
Β
βXxxxxxxxxxxx
Electricalβ
means
Xxxxxxx Xxxxxxxxxxxx Electrical Contractors, Inc., a Pennsylvania corporation.
Β
βDisclosure
Scheduleβ
means
the disclosure schedules provided by the Seller Entities and attached hereto
as
Annex
B,
as the
same may be amended in accordance with the terms hereof.
Β
βEmployeeβ
has
the
meaning set forth in Section 4(r)(i) below.
Β
βEmployee
Benefit Planβ
has
the
meaning set forth in Section 4(r)(i) below.
Β
βEnvironmental,
Health, and Safety Requirementsβ
shall
mean all federal, state, local and foreign statutes, regulations, ordinances
and
similar provisions having the force or effect of law and all judicial and
administrative orders and determinations 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 Substances.
Β
βERISAβ
means
the Employee Retirement Income Security Act of 1974, as amended.
Β
βExpected
Gross Marginβ
has
the
meaning set forth in Section 8(l) below.
Β
βFinancial
Statementsβ
has
the
meaning set forth in Section 4(f) below.
Β
βGAAPβ
means
United States generally accepted accounting principles as in effect from time
to
time.
Β
2
βHazardous
Substancesβ
shall
have the meaning set forth in Section 101(14) of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act (βCERCLAβ), 42 U.S.C. Section
9601(14).
Β
βXxxxxxxxβ
means
Houlihan, Lokey, Xxxxxx and Zukin, financial advisor to the Parent.
Β
βIncome
Taxβ
means
any federal, state, local, or foreign income or franchise tax, including any
interest, penalty, or addition thereto, whether disputed or not.
Β
βIncome
Tax Returnβ
means
any return, declaration, report, claim for refund, or information return or
statement relating to Income Taxes, including any schedule or attachment
thereto, and including any amendment thereof.
Β
βIndemnified
Partyβ
has
the
meaning set forth in Section 8(g) below.
Β
βIndemnifying
Partyβ
has
the
meaning set forth in Section 8(g) below.
Β
βIntellectual
Propertyβ
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 Internet domain names and universal
resource locators (βURLsβ),
(e)
all mask works and all applications, registrations, and renewals in connection
therewith, (f) 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), (g) all computer
software (including data and related documentation), and (h) all copies and
tangible embodiments of each of the foregoing, in whatever form or
medium.
Β
βKnowledge,β
or
phrases of similar import, with respect to an individual, means an individual
shall be deemed to have knowledge of a particular fact or other matter if that
individual is actually aware of that fact or matter. With respect to a Person,
other than an individual, "Knowledge,"
or
phrases of similar import, means a Person shall be deemed to have knowledge
of a
particular fact or other matter if any individual who is serving as an executive
officer of that Person (or in any similar capacity) is actually aware of that
fact or other matter, provided that (a) the Seller shall also be deemed to
have
knowledge of a fact or other matter if any of Xxxxx Xxxxxxx or Xxxx Xxxxxxxx
is
actually aware of the fact or matter, and (b) the Parent shall only be deemed
to
have knowledge of a fact or other matter if the chief executive officer or
chief
financial officer of the Parent is actually aware of such fact or other
matter.
Β
"Lawβ
or βLaws"
means
any statute, law, ordinance, rule, regulation, or notice promulgated by any
federal, state, county or municipal government or governmental entity having
jurisdiction over the business of the Seller Entities, the Company or the
Buyer.
Β
βLossβ
has
the
meaning set forth in Section 8(b)(i) below.
Β
βMaterial
Adverse Effectβ
means
any change, event, fact, occurrence or effect (direct or indirect) which might
reasonably be expected to have a material adverse effect on the assets,
financial condition or results of operation of the Company, other than any
change, fact, circumstance or event (i) generally affecting the industry in
which the Company conducts its business, or resulting from general economic
or
market conditions or changes in accounting principles, laws, regulations, or
regulatory
Β
3
policies
of general applicability (or interpretations thereof), (ii) resulting from
actions or omissions of a Person taken with the prior written consent of the
Parties in contemplation of the transactions contemplated hereby, or (iii)
resulting from the announcement or execution of this Agreement or the
transactions contemplated herein.
Β
βMost
Recent Financial Statementsβ
has
the
meaning set forth in Section 4(f) below.
Β
βMost
Recent Fiscal Month Endβ
has
the
meaning set forth in Section 4(f) below.
Β
βNon-Union
Transferred Employeesβ
has
the
meaning set forth in Section 6(e)(i) below.
Β
βOrdinary
Course of Businessβ
means
the ordinary course of business consistent with past custom and practice
(including with respect to quantity and frequency).
Β
βOverlap
Periodβ
has
the
meaning set forth in Section 9(c) below.
Β
βParentβ
has
the
meaning set forth in the preface above.
Β
βPartyβ
or
βPartiesβ
has
the
meaning set forth in the preface above.
Β
βPersonβ
means
an individual, a governmental entity (or any department, agency, or political
subdivision thereof), or a partnership, limited liability company, limited
liability partnership, corporation, association, joint stock company, trust,
joint venture, unincorporated organization or similar entity.
Β
βPreliminary
Balance Sheetβ
has
the
meaning set forth in Section 2(b)(ii) below.
Β
βPurchase
Priceβ
has
the
meaning set forth in Section 2(b) below.
Β
βRealized
Gross Marginβ
has
the
meaning set forth in Section 8(l) below.
Β
βRepresentativesβ
of any
Person means the officers, directors, employees, accountants, counsel,
investment bankers, financial advisors and other representatives of such
Person.
Β
βRequisite
Consentsβ
has
the
meaning set forth in Section 7(a)(v) below.
Β
βSection
338(h)(10) Electionβ
has
the
meaning set forth in Section 9(j)(i) below.
Β
βSecurities
Actβ
means
the Securities Act of 1933, as amended.
Β
βSecurity
Agreementβ
means
the Guarantor Security Agreement, dated as of June 30, 2005, by Xxxxxxxxxxxx
Electrical in favor of the Agent (as defined in the Credit Facility).
Β
βSecurities
Exchange Actβ
means
the Securities Exchange Act of 1934, as amended.
Β
βSecurity
Interestβ
means
any mortgage, pledge, lien, encumbrance, charge, or other security interest,
other than (a) mechanic's, materialmen's, and similar liens, (b) liens for
taxes
not yet due and payable or for taxes that the taxpayer is contesting in good
faith through appropriate proceedings, (c) purchase money liens and liens
securing rental payments under capital lease arrangements, and (d) other liens
arising in the Ordinary Course of Business and not incurred in connection with
the borrowing of money.
Β
βSellerβ
has
the
meaning set forth in the preface above.
Β
βSeller
401(k) Planβ
has
the
meaning set forth in Section 6(e) below.
Β
4
βSeller
Entitiesβ
has
the
meaning set forth in the preface above.
Β
βSellerβs
Contribution Historyβ
has
the
meaning set forth in Section 8(b)(i) below.
Β
βStop-Loss
Jobsβ
has
the
meaning set forth in Section 8(l) below.
Β
βSubsidiaryβ
means
any corporation (or other entity) with respect to which a specified Person
or a
Subsidiary thereof owns a majority of the common stock (or analogous equity
interest, as applicable) or has the power to vote or direct the voting of
sufficient securities to elect a majority of members of the board of directors
(or analogous governing body, as applicable).
Β
βTax
Returnsβ
means
federal, state, foreign and local Tax reports, returns, information returns
and
other documents.
Β
βTaxesβ
or
βTaxβ
shall
mean all taxes, assessments, charges, duties, fees, levies or other governmental
charges, including, without limitation, all federal, state, local, foreign
and
other income, franchise, profits, capital gains, capital stock, transfer, sales,
use, registration, value added, occupation, property, excise, severance,
windfall profits, stamp, license, payroll, withholding and other taxes,
assessments, charges, duties, fees, levies or other governmental charges of
any
kind whatsoever (whether payable directly or by withholding and whether or
not
requiring the filing of a Tax Return), all estimated taxes, deficiency
assessments, additions to tax, penalties and interest and shall include any
liability for such amounts as a result either of being a member of a combined,
consolidated, unitary or Affiliated Group or of a contractual obligation to
indemnify any Person.
Β
βTaxing
Authoritiesβ
means
the Internal Revenue Service and any other federal, state or local authority
which has the right to impose Taxes on the Company or a Seller
Entity.
Β
βThird
Party Claimβ
has
the
meaning set forth in Section 8(g) below.
Β
βTransferred
Employeesβ
has
the
meaning set forth in Section 6(e)(i) below.
Β
βUnion
Benefit Plan(s)β
has
the
meaning set forth in Section 4(r)(i) below.
Β
βUnion
Transferred Employeesβ
has
the
meaning set forth in Section 6(e)(i) below.
Β
β338
Indemnity Amountβ
has
the
meaning set forth in Section 9(j)(iii) below.
Β
2.Β Β PURCHASE
AND SALE OF THE COMPANY SHARES.
Β
(a)Β Basic
Transaction.
On and
subject to the terms and conditions of this Agreement, the Buyer agrees to
purchase from the Seller, and the Seller agrees to sell to the Buyer, all of
its
Company Shares for the consideration specified below in this Section
2.
Β
(b)Β Purchase
Price.
Β
(i)Β Closing
Payment.
At the
Closing, the Buyer shall pay to the Seller immediately available funds in the
amount of One Million and 00/100
Dollars ($1,000,000.00), by certified check or wire transfer to the Seller's
designated account(s) (the βClosing
Paymentβ).
The
purchase price for the Company Shares (the βPurchase
Priceβ)
shall
equal the sum of the Closing Payment and the Contingent Consideration received
by the Seller pursuant to Section 2(b)(ii), and shall be payable as provided
in
this Section 2.
Β
5
(ii)Β Contingent
Consideration.
Β
(A)Β Section
2(b)(ii)(A) of the Disclosure Schedule identifies certain accounts receivable
and retainages (an βAccountβ
or
the
"Accounts")
due
the Company, said Accounts having an aggregate face value as of the Closing
Date
of $1,983,375.17. Section 2(b)(ii)(A) of the Disclosure Schedule also identifies
the sum of $616,780.85, representing the balance of the subcontractor settlement
amount due the Company pursuant to the terms of that certain Receipt, Release
and Settlement Agreement by and between the Company and Xxxxx X. Xxxx, Inc.,
dated March 29, 2006 (the "Xxxx
Account").
The
Accounts and the Xxxx Account are referred to herein collectively as the
"Contingent
Consideration."
Β
(B)Β Further,
$300,000.00 of the Companyβs reserve for bad debts shall be transferred to the
benefit of the Seller in connection with the collection of the
Accounts.
Β
(C)Β At
Closing, the Company shall assign absolutely to the Seller, without recourse,
all of the Company's right, title and interest in and to the Xxxx Account.
At
Closing, the Company shall pledge to the Seller the Accounts, including the
proceeds to be derived therefrom (subject to the terms of this Agreement),
which
pledge shall be secured by a first priority security interest by the filing
of a
UCC-1 Financing Statement in accordance with Pennsylvania Law. Following the
Closing Date, the Buyer shall use its usual and customary practices to collect
the Accounts, and if, when and as the Accounts are collected by the Buyer,
the
cash proceeds therefrom shall be remitted, along with reasonable supporting
accounting detail, to the Seller within ten days of each quarter end,
less
any
chargeback for warranty work performed by the Buyer during the prior quarter
for
which the Seller is liable under the terms of this Agreement. In addition,
the
Buyer shall provide the Seller, on the tenth day of each of the six (6) calendar
months after Closing and thereafter no later than the tenth day after the end
of
each calendar quarter, with a report reasonably detailing outstanding Accounts.
The Buyer shall promptly assign all of its rights, title and interest in and
to
any Accounts that are not collected in full within one hundred twenty (120)
days
after the Closing Date upon written request of the Seller, and the Seller shall
possess all rights and remedies available to it in collection thereof, including
without limitation, the filing of liens and commencement of litigation (other
than in respect of the Xxxx Account). The Buyer shall promptly execute and
deliver to the Seller any and all documents and instruments necessary or
desirable to transfer such Accounts to the Seller. The Buyer agrees to make
itself available for discussion regarding any Accounts assigned to the Seller
hereunder.
Β
(D)Β The
Seller acknowledges that there is no assurance that the Buyer will collect
the
Accounts; that nothing contained herein shall be construed as a guaranty or
surety by the Buyer as to the collectibility of the Accounts; and that the
Buyer
is not obligated to undertake any legal action to pursue the collection of
the
Accounts; provided,
however,
that
the Buyer shall cooperate to provide Seller with the requisite legal standing
to
pursue such action, if desired by the Seller and shall transfer and assign
such
Accounts as the Seller may request as provided in Section 2(b)(ii)(C) above.
Notwithstanding anything to the contrary provided in the aforementioned Receipt,
Release and Settlement Agreement, and in recognition of the important customer
relationship between the Company and Xxxxx X. Xxxx, Inc., the Seller covenants
and agrees that no collection activity (including, but not limited to, telephone
calls or letters or inquiry or demand) nor any legal actions will be attempted
or commenced against Xxxxx X. Xxxx, Inc. by Seller or any Affiliate to collect
the Xxxx Account. In no event shall the Buyer (1) induce or influence any
Account-debtor, including, but not limited to,
Β
6
the
Xxxx
Account, to refrain from making any payments to the Seller or to make payments
to the Buyer or the Company prior to making payments to the Seller. (2)
compromise, release or modify any Account such that any payments to the Seller
thereunder are reduced or jeopardized, or (3) otherwise adversely effect the
Sellerβs rights to proceeds from the Accounts pursuant to Section 2(b)(ii)
hereof.
Β
(E)Β If
after
Closing the Company receives payment upon an Account, and if that Account-debtor
was identified on Section 2(b)(ii)(E) of the Disclosure Schedule as under
contract to the Company as of the Closing Date so that further work,
post-Closing, would be performed and billed by the Company, and if the payment
received does not satisfy in full the amount then owing to the Seller (per
Section 2(b)(ii) hereof) and to the Company, the Company shall pay a share
of
such payment to the Seller based upon the following formula: the amount of
the
payment shall be multiplied by a fraction; the numerator of which is the balance
of that Account due the Seller (prior to any credit for the payment received),
and the denominator of which is the total amount due from that Account-debtor
to
the Seller and the Company.
Β
(c)Β The
Closing.
The
closing of the transactions contemplated by this Agreement (the βClosingβ)
shall
take place at the offices of the Buyer in Allentown,
Pennsylvania on October 30, 2006, commencing at Noon local time, or such other
date as the Buyer and the Seller may mutually determine in writing (the
βClosing
Dateβ).
The
exchange of copies of this Agreement and all ancillary documents and of all
signature pages by electronic mail or facsimile transmission shall constitute
effective delivery hereof and thereof as to the parties and may be used in
lieu
of the originals for all purposes. Signatures of the parties transmitted by
electronic mail or facsimile shall be deemed to be their original signatures
for
all purposes.
Β
(d)Β Deliveries
at the Closing.
At the
Closing, (i) the Seller will deliver to the Buyer the various certificates,
instruments, and documents referred to in Section 7(a) below, (ii) the Buyer
will deliver to the Seller the various certificates, instruments, and documents
referred to in Section 7(b) below, (iii) the Seller will deliver to the Buyer
stock certificates representing all of its Company Shares, endorsed in blank
or
accompanied by duly executed assignment documents, and (iv) the Buyer will
deliver to the Seller the Closing Payment and a copy of the duly filed UCC-1
Financing Statement referenced in Section 2(b)(ii)(C) above and any other
documents, instruments or certificates necessary to provide Seller a secured
pledge to the Accounts.
Β
Β Β Β Β Β Β Β Β (e)Β Preliminary
Balance Sheet.
Prior
to the Closing Date, the Seller and the Buyer shall prepare jointly an unaudited
balance sheet for the Company (which may or may not contain notes), dated as
of
September 30, 2006 (the βPreliminary
Balance Sheetβ).
The
Preliminary Balance Sheet shall be prepared in accordance with GAAP. The Seller
shall make available to the Buyer copies of all work papers and other documents
and data as were used to prepare the Preliminary Balance Sheet (and any items
therein).
Β
3.Β Β |
REPRESENTATIONS
AND WARRANTIES CONCERNING THE SELLER ENTITIES AND THE
BUYER.Β
|
Β
Β Β Β Β Β Β Β Β (a)Β Β Representations
and Warranties of the Seller Entities.
Each of
the Seller Entities represents and warrants to the Buyer that except as set
forth in the Disclosure Schedule, the statements contained in this Section
3(a)
are correct and complete as of the date hereof.
Β Β Β Β (i)Β Organization.
Each of
the Seller Entities is duly incorporated and validly existing under the laws
of
the State of Connecticut.
7
(ii)Β Authorization
of Transaction. Each
of
the Seller Entities has corporate power and authority to execute and deliver
this Agreement and to perform its obligations hereunder. The execution, delivery
and performance of this Agreement and all other agreements and transactions
contemplated hereby have been duly authorized by all required corporate
proceedings of each of the Seller Entities and no other corporate proceedings
are necessary to authorize this Agreement and such agreements contemplated
hereby and transactions contemplated hereby and thereby. This Agreement
constitutes the valid and legally binding obligation of each of the Seller
Entities, enforceable in accordance with its terms and conditions,
except
to
the extent that enforceability may be limited by bankruptcy, insolvency,
moratorium, reorganization and other laws affecting the enforcement of
creditors' rights generally and by general principles of equity.
(iii)Β Government
Authorizations.
Except
as set forth in Section 3(a)(iii) of the Disclosure Schedule, neither Seller
Entity is required to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency
in
order to consummate the transactions contemplated by this
Agreement.
(iv)Β 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 a Seller
Entity is subject or any provision of the charter or bylaws of a Seller Entity
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 set forth in Section 4(m) of the
Disclosure Schedule, excluding
from the foregoing such requirements, conflicts, defaults, rights or violations
(1) that are not, individually or in the aggregate, reasonably likely to have
a
Material Adverse Effect and would not adversely affect, in any material respect,
the ability of the Seller Entities to consummate the transactions contemplated
by this Agreement or (2) that become applicable as a result of the business
or
activities in which the Buyer engages or proposes to be engaged, or as a result
of any acts or omissions by, or the legal status of or any facts pertaining
to,
the Buyer.
(v)Β Brokers'
Fees. Neither
Seller Entity has any liability or obligation to pay any fees or commissions
to
any broker, finder, or agent with respect to the transactions contemplated
by
this Agreement, other than certain fees to Xxxxxxxx all of which fees shall
be
paid by the Parent.
(vi)Β Company
Shares.
The
Seller holds of record and owns beneficially the number of Company Shares set
forth in Section 4(b) below, free and clear of any restrictions on transfer
(other than any restrictions imposed by the Securities Act and state securities
laws, which restrictions shall not prohibit or interfere with this proposed
sale
of Company Shares), taxes, Security Interests, options, warrants, purchase
rights, contracts, or commitments. Neither Seller Entity is a party to any
option, warrant, purchase right, or other contract or commitment that could
require the Seller to sell, transfer, or otherwise dispose of any capital stock
of the Company (other than this Agreement). Neither Seller Entity is a party
to
any voting trust, proxy, or other agreement or understanding with respect to
the
voting of any capital stock of the Company.
8
(vii)Β Litigation.Β There
is
no action, suit, investigation or proceeding pending against, or to the
Knowledge of the Seller Entities, threatened against or affecting the Seller
Entities before any court or arbitrator or any governmental body, agency or
official which challenges or seeks to prevent, enjoin, alter or delay, in any
material respect, the consummation of the transactions contemplated by this
Agreement.
(b)Β Β Representations
and Warranties of the Buyer.
The
Buyer
represents and warrants to the Seller Entities that except as set forth in
the
Buyer Disclosure Letter, the statements contained in this Section 3(b) are
correct and complete as of the date hereof.
(i)Β Organization
of the Buyer.
The
Buyer is a corporation duly organized and validly existing under the laws of
the
jurisdiction of its incorporation.
(ii)Β Authorization
of Transaction. The
Buyer
has corporate power and authority to execute and deliver this Agreement and
to
perform its obligations hereunder. The execution, delivery and performance
of
this Agreement and all other agreements and transactions contemplated hereby,
have been duly authorized by all required corporate proceedings of the Buyer
and
its Affiliates, and no other corporate proceedings are necessary to authorize
this Agreement and such agreements contemplated hereby and the transactions
contemplated hereby and thereby. This Agreement constitutes the valid and
legally binding obligation of the Buyer, enforceable in accordance with its
terms and conditions,
except
to
the extent that enforceability may be limited by bankruptcy, insolvency,
moratorium, reorganization and other laws affecting the enforcement of
creditors' rights generally and by general principles of equity.
(iii)
Β Government
Authorizations.
Except
as set forth in Section 3(b)(iii) of the Buyer Disclosure Letter, the Buyer
is
not required to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency
in
order to consummate the transactions contemplated by this
Agreement.
Β Β Β Β (iv)Β 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
is subject or any provision of its 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 is a party or by which it is bound
or to
which any of its assets is subject, except
for requirements, conflicts, defaults, rights or violations that, individually
or in the aggregate, would not materially impair the ability of Buyer to perform
its obligations hereunder.
Β Β Β Β (v)Β Brokers'
Fees.
The
Buyer has no liability or obligation to pay any fees or commissions to any
broker, finder, or agent with respect to the transactions contemplated by this
Agreement.
Β
(vi)Β Investment.
The
Buyer
is purchasing the Company Shares for its own account and is not acquiring the
Company Shares with a view to, or for sale in connection with, any distribution
thereof within the meaning of the Securities Act. The Buyer
has
no present intention of selling, granting any participation in, or otherwise
distributing any of the Company Shares. None of the Buyer or its Affiliates
has
entered into any contract, undertaking, agreement or arrangement with any Person
for resale of any of the Company Shares. The Buyer acknowledges that the
offering of the Company Shares pursuant to
9
this
Agreement has not been and will not be registered under the Securities Act
or
any state securities or blue sky laws on the grounds that the offering and
sale
of the Company Shares contemplated by this Agreement is exempt from registration
pursuant to exemptions available under such laws, and that the Seller's reliance
upon such exemptions is predicated in part upon the Buyer's representations
set
forth in this Agreement. The Buyer is an βaccredited investorβ within the
meaning of Regulation D promulgated under the Securities Act, and has the
knowledge and experience necessary to evaluate the merits and risks of an
investment in the Company Shares and the consummation of the transactions
contemplated hereby.
(viii)Β Disclaimers.
The
Buyer:
(A)Β acknowledges
that other than as set forth in Section 4 of this Agreement, neither the Parent,
the Seller nor any of their respective shareholders or Affiliates, or the
Representatives thereof, makes or has made any representation or warranty,
either express or implied, as to the accuracy or completeness of any of the
information provided or made available to the Buyer or its shareholders or
Affiliates, or the Representatives thereof;
(B)Β agrees,
to the fullest extent permitted by Law, that none of the Parent, the Seller
or
any of their respective shareholders or Affiliates, or the Representatives
thereof shall have any liability or responsibility whatsoever to the Buyer
or
its shareholders or Affiliates, or the Representatives thereof, on any basis
(including in contract or tort, under federal or state securities laws or
otherwise) based upon any information provided or made available, or statements
made to the Buyer or its shareholders or Affiliates, or the Representatives
thereof (or any omissions therefrom), provided, however, that the foregoing
limitations shall not apply to the Seller Entities insofar as the Seller
Entities make the specific representations and warranties set forth in Section
4
of this Agreement, but always subject to the limitations and restrictions
contained in Section 8; and
(C)Β acknowledges
and agrees that the specification of any dollar amount in the representations
and warranties contained in this Agreement or the inclusion of any specific
item
in the Disclosure Schedule is not intended to imply that such amounts or higher
or lower amounts, or the items so included or other items, are or are not
material, and no Party shall use the fact of the setting of such amounts or
the
fact of inclusion of any such item in the Disclosure Schedule in any dispute
or
controversy between the Parties as to whether any obligation, item or matter
not
described herein or included in a schedule is or is not material.Β
(ix)Β Legal
Compliance.
The
Buyer is in compliance with all applicable Laws (including rules, regulations,
codes, plans, injunctions, judgments, orders, decrees, rulings, and charges
thereunder) of federal, state, and local governments (and all agencies thereof),
except where the failure to comply would not have a material adverse effect
upon
the ability of the Buyer to perform its obligations under this Agreement. Except
as set forth in Section 3(b)(ix) of the Buyer Disclosure Letter, the Buyer
holds
and is in
10
compliance
with all permits, licenses, approvals, and authorizations of governmental
authorities, required for the conduct of its business as currently conducted,
except to the extent that any failure to so hold or comply would not reasonably
be expected to have a material adverse effect upon the Buyer following the
Closing. The Buyer does not reasonably anticipate any material impediments
to
its obtaining any required permits, licenses, approvals or authorizations of
governmental authorities listed in Section 3(b)(iii) of the Buyer Disclosure
Letter required to consummate the transactions contemplated hereunder.
(x)Β Adequate
Funds.
The
Buyer will have at the Closing sufficient immediately available funds, in cash,
to pay the Closing Payment, to provide the Company with sufficient working
capital and to pay any other amounts payable by the Buyer pursuant to this
Agreement and to effect the transactions contemplated hereby.
4.Β Β |
REPRESENTATIONS
AND WARRANTIES CONCERNING THE COMPANY.Β
|
Β
The
Parent and the Seller represent and warrant to the Buyer that except as set
forth in the Disclosure Schedule, each of the statements contained in this
Section 4 are correct and complete as of the date of this Agreement. The
exceptions, modifications and disclosures made in any Section of the Disclosure
Schedule are made for all purposes of this Agreement or in any agreement or
instrument delivered pursuant to or in connection with this Agreement
notwithstanding the fact that no express cross-reference is made provided,
that
the applicability of any disclosure to another section of the Disclosure
Schedule is reasonably apparent.
Β
(a)Β Β Organization
of the Company.
The
Company is a corporation duly organized and validly existing under the laws
of
the jurisdiction of its incorporation and has
full
power and authority to carry on the businesses in which it is engaged and to
own, lease and use the properties owned, leased and used by it, except
where any such failure to be so organized or formed and existing or to have
such
power and authority would not individually or in the aggregate have a Material
Adverse Effect. Β The
Company
is duly
authorized to conduct business and is in good standing under the laws of each
jurisdiction where such qualification is required, except where the lack of
such
qualification would not have a Material Adverse Effect.
(b)Β Β Capitalization.
(i)Β Company.
The
authorized capital stock of the Company and the number of Company Shares issued
and outstanding are as set forth in Section 4(b) of the Disclosure Schedule.
All
of the issued and outstanding Company Shares have been duly authorized, are
validly issued, fully paid, and nonassessable, and are held of record by the
Seller. There are no outstanding or authorized options, warrants, purchase
rights, subscription rights, conversion rights, exchange 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. There are no
outstanding or authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to the capital stock of the
Company.
(ii)
Β Subsidiaries.
The
Company does not have any Subsidiaries and the Company does not otherwise own
or
control, directly or indirectly, any equity or similar interest or any interest
convertible into or exchangeable or exercisable for any equity or similar
interest in any Person.
(c)Β Β Noncontravention.
Neither
the execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (i) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of
11
any
government, governmental agency, or court to which the Company is subject or
any
provision of the charter or bylaws of the Company or (ii) conflict with, result
in a breach of, constitute a default under, or result in the acceleration of
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, except where the violation, conflict, breach, default, or acceleration
would not have a Material Adverse Effect or a material adverse effect on the
ability of the Parties to consummate the transactions contemplated by this
Agreement. Except as set forth in Section 4(c) of the Disclosure Schedule,
the
Company is not required to give any notice to, make any filing with, or obtain
any authorization, consent, or approval of any government or governmental agency
in order for the Parties to consummate the transactions contemplated by this
Agreement.
(d)Β Β Brokers'
Fees.
The
Company does not have any liability or obligation to pay any fees or commissions
to any broker, finder, or agent with respect to the transactions contemplated
by
this Agreement.
(e)Β Β 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 Financial Statements, free and clear of all Security Interests, except
for properties and assets disposed of in the Ordinary Course of Business since
the date of the Most Recent Financial Statements and except as provided in
the
Security Agreement or as set forth on Section 4(e) of the Disclosure
Schedule.
(f)Β Β Financial
Statements.
Copies
of the following financial statements are attached to Section 4(f) of the
Disclosure Schedule: (i) the unaudited balance sheet and statements of income,
shareholder equity, and cash flows as of and for the for the fiscal year ended
December 31, 2005 for the Company (the βAnnual
Financial Statementsβ);
and
(ii) an unaudited balance sheet and statements of income, shareholder equity
and
cash flows, as of and for the nine months ended September 30, 2006 for the
Company (the βMost
Recent Financial Statementsβ
and,
together with the Annual Financial Statements, the βFinancial
Statementsβ).
September 30, 2006 is sometimes referred to herein as the βMost
Recent Fiscal Month End.β
The
Financial Statements (including the notes thereto) have been prepared in
accordance with GAAP on a consistent basis through the periods presented in
the
Financial Statements and present fairly, in all material respects, the financial
condition of the Company (as applicable) as of such dates and the results of
operations of the Company (as applicable) for such periods; provided,
however,
that
the Most Recent Financial Statements are subject to normal year-end adjustments
which are not reasonably expected to be material in the aggregate and lack
footnotes and other presentation items.
(g)Β Β Undisclosed
Liabilities.
Except
(i) for liabilities and obligations incurred in the Ordinary Course of Business
since the date of the Most Recent Financial Statements, (ii) as otherwise
disclosed herein or in Section 4(g) of the Disclosure Schedules, and (iii)
as
and to the extent disclosed or reserved against in the balance sheet of the
Company for the Most Recent Fiscal Month End, since the Most Recent Fiscal
Month
End, the Company has not incurred any liabilities or obligations (whether
direct, indirect, accrued or contingent) that would, individually or in the
aggregate, be required to be reflected or reserved against in a balance sheet
of
the Company prepared in accordance with GAAP.
(h)Β Β Events
Subsequent to Most Recent Fiscal Month End.
Since
the
Most Recent Fiscal Month End, there has not been any event or occurrence that
has had, or is reasonably likely to have, a Material Adverse Effect and the
Company has not:
12
(i)Β become
legally obligated to sell, assign or otherwise transfer any of its material
assets or properties, other than in the Ordinary Course of
Business;
Β
(ii)Β made
any
acquisition of all of the capital stock (whether by merger or otherwise) or
all
or substantially all of the assets of any Person;
(iii)Β subjected
any material asset to a Security Interest;
(iv)Β amended
or authorized any amendment to its charter or bylaws;
(v)Β incurred
any indebtedness for borrowed money from a non-affiliated Person or incurred
any
liability (contingent or otherwise) in excess of $50,000, other than trade
payables incurred in the Ordinary Course of Business;
(vi)Β declared
or made any payment or distribution to the Seller, other than in connection
with
the Seller advancing funds to, and sweeping cash of, the Company pursuant to
the
Sellerβs cash management system with Bank of America in the Ordinary Course of
Business;
(vii)Β issued,
sold, pledged, disposed of, or encumbered any shares of, or securities
convertible into or exchangeable or exercisable for, or options, warrants,
calls, commitments or rights of any kind to acquire any shares of the capital
stock of the Company;
(viii)Β made
any
change to its accounting policies, principles or practices other than as
required by law or changes in GAAP;
(ix)Β made
any
loans to any Persons other than advances for business expenses in the Ordinary
Course of Business;
(x)Β entered
into, adopted, amended or terminated any bonus, profit sharing, compensation
or
stock option/ownership plan, severance or other Employee Benefit Plan or other
arrangement for the benefit of any director, officer or employee, or increased
in any manner the compensation or fringe benefits of any director or officer,
other than as required under any employment agreement listed in Section 4(m)
of
the Disclosure Schedule;
(xi)Β waived
any right in any contract listed in Section 4(m) of the Disclosure Schedule,
the
waiver of which would reasonably be expected to materially detract from the
value of such contract to the Company; or
(xii)Β become
obligated to take any of the actions specified in subparagraphs (i) through
(xi)
above.
Β
(i)Β Β Legal
Compliance.
Except
as set forth in Section 4(i) of the Disclosure Schedule, the Company is in
compliance in all material respectsΒ with
all
applicable laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of federal, state,
and local governments (and all agencies thereof). Except as set forth in Section
4(i) of the Disclosure Schedule, the Company holds and is in compliance in
all
material respectsΒ with
all
permits, licenses, approvals, and authorizations of governmental authorities
required for the conduct of its business as currently conducted.
(j)Β Β Tax
Matters.
13
(i)Β Except
as
set forth in Section 4(j)(i) of the Disclosure Schedule, all federal Income
Tax
Returns required to be filed in respect of the Companyβs Affiliated Group prior
to the Closing Date have been filed and all Income Taxes shown thereon have
been
paid.
All such
Income Tax Returns were correct and complete in all material respects. All
material Income Taxes owed by a Seller Entity or the Company (whether or not
shown on any Tax Return) have been paid. Except as described above in this
subparagraph (i), neither the Parent, the Seller nor the Company is currently
the beneficiary of any extension of time within which to file any Income Tax
Return. No written 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)Β The
Company has filed all state and local Income Tax Returns that it was required
to
file prior to the date hereof, and has paid or has reserved on the Most Recent
Financial Statements adequate funds for the payment of all Income Taxes shown
thereon as owing.
(iii)Β The
Company has not waived any statute of limitations in respect of Income Taxes
or
agreed to any extension of time with respect to an Income Tax assessment or
deficiency.
(iv)Β The
Company has withheld and paid all Taxes required to have been withheld and
paid
by it, except payroll taxes which are not due as of the Closing Date and which
have been appropriately reflected as liabilities on the Most Recent Financial
Statements.
(v)Β There
is
no dispute or claim concerning any material liability in respect of any Tax
of a
Seller Entity or the Company either (A) claimed or raised by any authority
in
writing or (B) as to which the Seller Entities have Knowledge.
(vi)Β Neither
the Parent, the Seller nor the Company has filed a consent under Code Β§ 341(f)
concerning collapsible corporations. Neither the Parent, the Seller nor the
Company has been a United States real property holding corporation within the
meaning of Code Β§ 897(c)(2) during the applicable period specified in Code
Β§897(c)(1)(A)(ii). To the Knowledge of the Seller Entities, the Seller Entities
and the Company have disclosed on their respective 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 Β§ 6662. Neither the Parent, the
Seller nor the Company is a party to any Tax allocation or sharing agreement
which will not be terminated on or before the Closing Date.
(vii)Β The
unpaid Taxes of the Company did not, as of the Most Recent Fiscal Month End,
materially exceed the reserve for Tax Liability (rather than any reserve for
deferred Taxes established to reflect timing differences between book and Tax
income) set forth on the face of the Most Recent Financial Statements (rather
than in any notes thereto).
(k)Β Β Real
Property.
(i)Β The
Company does not own any real property (the βReal
Propertyβ).
(ii)Β Section
4(k)(ii) of the Disclosure Schedule lists and briefly describes all parcels
of
Real Property leased or subleased to the Company by any other Person. The
14
Seller
Entities have made available to the Buyer correct and complete copies of the
leases and subleases listed in Section 4(k)(ii) of the Disclosure Schedule
and:
(A)Β each
such
lease or sublease is legal, valid, binding, enforceable, and in full force
and
effect;
(B)
Β the
consummation of the transactions contemplated hereby is not an event of default
under any such lease or sublease;
(C)
Β to
the
Knowledge of the Seller Entities, no party to any such lease or sublease 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)
Β to
the
Knowledge of the Seller Entities, no party to any such lease or sublease has
repudiated any provision thereof;
(E)
Β to
the
Knowledge of the Seller Entities, there are no oral agreements or forbearance
programs in effect as to any such lease or sublease; and
(F)Β the
Company has not assigned, transferred, conveyed, mortgaged, deeded in trust,
or
encumbered any interest in the leasehold or subleasehold.
(l)Β Β Intellectual
Property.
(i)Β To
the
Knowledge of the Seller Entities, the Company has not interfered with, infringed
upon, misappropriated, or violated any material Intellectual Property rights
of
third parties in any material respect, and neither Seller Entity has received
any written 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 the Seller Entities, no third
party has interfered with, infringed upon, misappropriated, or violated any
material Intellectual Property rights of the Company in any material
respect.
(ii)Β Section
4(l)(ii) of the Disclosure Schedule identifies each patent and trademark
registration which has been issued to the Company with respect to any of its
Intellectual Property, identifies each pending patent or trademark application
which the Company has made with respect to any of its Intellectual Property,
and
identifies each material 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). Section 4(l)(ii) of the Disclosure
Schedule also identifies each material 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 4(l)(ii)
of
the Disclosure Schedule:
Β (A)Β the
Company possesses all right, title, and interest in and to the item, free and
clear of any Security Interest, license, or other restriction;
Β (B)Β the
item
is not subject to any outstanding injunction, judgment, order, decree, ruling,
or charge; and
Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β (C)Β no
action, suit, proceeding, hearing, investigation, charge, complaint, claim,
or
demand is pending or, to the Knowledge of the Seller Entities, is threatened
which challenges the legality, validity, enforceability, use, or ownership
of
the item.
15
(iii)Β Section
4(l)(iii) of the Disclosure Schedule lists and briefly describes all licenses,
sublicenses, agreements, and permissions (as amended to date), with respect
to
each material item of Intellectual Property that any third party owns and that
the Company presently uses pursuant to license, sublicense, agreement, or
permission, except for βShrink-wrapsβ and similar widely available binary code
and commercial end-user licenses. With respect to each item of Intellectual
Property required to be identified in Section 4(l)(iii) of the Disclosure
Schedule:
(A)Β the
license, sublicense, agreement, or permission covering the item is legal, valid,
binding, enforceable, and in full force and effect;
(B)Β to
the
Knowledge of the Seller Entities, no party to the license, sublicense,
agreement, or permission is in material breach or default and no event has
occurred which with notice or lapse of time would constitute a material breach
or default or permit termination, modification, or acceleration thereunder;
and
(C)Β to
the
Knowledge of the Seller Entities, no party to the license, sublicense,
agreement, or permission has repudiated any material provision
thereof.
Β
(iv)Β All
Intellectual Property created at the
Company
or any predecessor in interest, or by any employee or consultant working for
the
Company,
has been assigned to the Company and such assignor is contractually obligated
to
assist the Company in registering any such Intellectual Property
rights.
(m)Β Β Contracts.
With
respect to each of the contracts listed in Section 4(m) of the Disclosure
Schedule: (A)
the
agreement is legal, valid, binding, enforceable, and in full force and effect
as
to the Company; (B) neither the Company nor, to the Knowledge of the Seller
Entities, any other party is in material breach or default, and to the Knowledge
of the Seller Entities, no event has occurred which with notice or lapse of
time
would constitute a material breach or default, or permit termination,
modification, or acceleration, under the agreement; and (C) to the Knowledge
of
the Seller Entities, no party has repudiated any material provision of the
agreement. Section 4(m) of the
Disclosure Schedule lists the following contracts and other agreements in effect
on the date hereof to which the
Company
is a party:
Β
(i)Β any
agreement (or group of related agreements) for the lease of real or personal
property to or from any Person providing for lease payments in excess of
$100,000 per annum;
(ii)Β any
agreement (or group of related agreements) for the purchase or sale of raw
materials, commodities, supplies, products, or other personal property, or
for
the furnishing or receipt of services, the performance of which will extend
over
a period of more than one year or involve consideration in excess of
$100,000;
(iii)Β any
agreement (or group of related agreements) under which the Company has created,
incurred, assumed, or guaranteed any indebtedness for borrowed money, or any
capitalized lease obligation, in excess of $100,000 or under which it has
imposed a Security Interest on any of its assets, tangible or intangible, other
than the Bank Guarantee and the Security Agreement;
Β Β Β Β Β Β Β Β Β Β (iv)Β any
written agreement concerning confidentiality or noncompetition;
(v)Β any
agreement with a Seller Entity or another Affiliate of the
Company;
16
(vi)Β any
profit sharing, stock option, stock purchase, stock appreciation, deferred
compensation, severance, or other material plan or arrangement for the benefit
of its current or former directors, officers, and employees;
Β Β Β Β Β Β Β Β Β Β (vii)Β any
collective bargaining agreement (each a βCollective
Bargaining Agreementβ
and
collectively the βCollective
Bargaining Agreementsβ);
(viii)Β any
agreement for the employment of any individual on a full-time, part-time,
consulting, or other basis providing annual compensation in excess of $100,000
or providing severance benefits;
(ix)Β any
agreement under which it has advanced or loaned any amount to any of its
directors, officers, and employees outside the Ordinary Course of
Business;
(x)Β any
agreement under which the consequences of a default or termination would
reasonably be expected to have a Material Adverse Effect; or
(xi)Β any
other
agreement (or group of related agreements) the performance of which involves
consideration in excess of $100,000Β in
the
aggregate.
(n)Β Β Guaranties.
The
Company is a guarantor under the Credit Facility. Except as set forth in the
immediately preceding sentence, the Company is not a guarantor of any liability
or obligation (including indebtedness) of any other Person.
(o)Β Β Tangible
Assets.
The
Company owns or leases all buildings, machinery, equipment, and other tangible
assets reasonably necessary for the conduct of its business as presently
conducted.
(p)Β Β Litigation.
Section
4(p) of the Disclosure Schedule sets forth each instance in which the
Company
is subject to any outstanding injunction, judgment, order, decree, ruling,
or
charge. Except as set forth in Section 4(p) of the Disclosure Schedule, there
are no actions or suits, or any administrative, arbitration or other proceedings
pending, or, to the Knowledge of the Seller Entities, threatened, against
the
Company,
or any of its properties, assets and business operations, as of the date hereof,
by or before any court, governmental or regulatory authority or by any third
party.
(q)Β Β Employees.
(i)Β Except
as
provided in Section 4(q)(i) of the Disclosure Schedule, there is no charge,
action, complaint, or proceeding pending, or to the Knowledge of the Seller
Entities, threatened, against the
Company
relating to the alleged violation of any applicable state or federal labor
or
employment law or regulation, including any charge or complaint filed by any
employee or labor organization with the National Labor Relations Board, the
Equal Employment Opportunities Commission, or any other governmental
agency.
(ii)Β There
is
no pending strike,
slow-down, picketing, or work stoppage by employees of the Company, nor is
there
any pending lockout by the
Company
of any its employees.
(iii)Β There
is
no pending organizing activity or petition for certification by or on behalf
of
any labor organization with respect to employees of the
Company.
Β
17
Β
(r)Β Β Employee
Benefits.
(i)Β Attached
hereto in Section 4(r) of the Disclosure Schedule is a true and complete list
of
each βemployee benefit plan,β as defined in Section 3(3) of ERISA, each bonus,
incentive, profit sharing, deferred compensation, excess benefit, supplemental
retirement, change-in-control, employment contract, stock purchase, stock
ownership, stock option, stock appreciation, supplemental unemployment,
vacation, sick-day, severance and other material employee benefit or fringe
benefit plan, program or arrangement that provides benefits or compensation
in
respect of any employee or former employee of the
Company
or the beneficiaries or the dependents of any such employee or former employee
(hereinafter individually, an βEmployeeβ
and
collectively, the βEmployeesβ)
or
under which any Employee is or may become eligible to participate or derive
a
benefit and that is or has been maintained or established by the
Company,
(collectively, the βEmployee
Benefit Plansβ).
Also
attached hereto in Section 4(r) of the Disclosure Schedule is a true and
complete list of each employee benefit plan, as defined in Section 3(3) of
ERISA, to which the Company is obligated to contribute pursuant to a Collective
Bargaining Agreement (each a βUnion
Benefit Planβ,
and
collectively the βUnion
Benefit Plansβ).
(ii)Β A
copy of
each Employee Benefit Plan and Union Benefit Plan listed in Section 4(r) of
the
Disclosure Schedule, the summary plan descriptions and in the case of an
unwritten Employee Benefit Plan, a written description thereof, the most recent
determination letter received from the Internal Revenue Service, the most recent
annual
report
(IRS Form 5500), and all related trust agreements, insurance contracts, and
other funding arrangements which implement each such Employee Benefit Plan
has
been furnished or made available to the Buyer.
(iii)Β Each
single employer Employee Benefit Plan that is intended to be a tax-qualified
deferred compensation plan under Section 401(a) of the Code has either received
a determination letter from the Internal Revenue Service to the effect that
it
meets the requirements of said Code Section and that its related trust is exempt
from taxation under Section 501(a) of the Code, or is an adopter of a βprototype
planβ and an opinion letter has been issued to the prototype sponsor of the plan
on which the Company is entitled to rely.
(iv)Β Each
of
the single employer Employee Benefit Plans listed in Schedule 4(r) of the
Disclosure Schedule (A) complies in all material respects with the requirements
of all applicable laws, including, without limitation, ERISA and the Code,
and
(B) has at all times been maintained and operated in compliance in all material
respects with its terms and the requirements of all applicable laws, including
without limitation ERISA and the Code. The Company is not obligated to create,
modify or terminate any Employee Benefit Plan listed in Section 4(r) of the
Disclosure Schedule, and to the Knowledge of the Seller Entities, no condition
or circumstance exists that would prevent the amendment or termination of any
Employee Benefit Plan listed in Section 4(r) of the Disclosure Schedule, other
than any plan that is a multiemployer pension plan.
(v)Β Neither
Seller Entity nor the Company has incurred any liability to the Pension Benefit
Guaranty Corporation (other than contributions to the plan and premiums to
the
Pension Benefit Guaranty Corporation, which in either event are not in default)
or any withdrawal liability within the meaning of Section 4201 of ERISA, or
any
other liability pursuant to Title I or IV of ERISA or the penalty, excise tax
or
joint and several
18
Β Β Β Β Β Β Β Β Β Β liability
provisions of the Code
relating to employee benefit plans, in any such case relating to any Employee
Benefit Plan or Union Benefit Plan.
(vi)Β Except
as
set forth on Section 4(r) of the Disclosure Schedule, the Company has made
all
required contributions on a timely basis as of the Closing, or properly accrued
such amounts on the financial statements of the Company for the year in which
the Closing occurs.
(vii)Β The
consummation of the transaction in accordance with its terms will not result
in
a withdrawal or partial withdrawal.
(viii)Β The
Company represents and warrants that it has not, and does not provide for any
post-employment medical benefits to the extent any former employee or former
owner (including retirees and semi-retired employees or their dependents have
participated in Company Employee Welfare Plans, except as specifically required
under Section 4980B of the Code with respect to continuation of
coverage.
(ix)Β No
Single
Employer Company Employee Benefit Plan has incurred any accumulated funding
deficiency (within the meaning of ERISA or the Code).
(x)Β There
has
been no complete or partial termination of any Company Employee Benefit Plan.
(xi)Β None
of
the Company Employee Benefit Plans provides for additional or accelerated
payments or other consideration to be made on account of the transactions
contemplated hereby.
(xii)Β No
suit,
action, claim, proceeding, investigation or arbitration has been made or
instituted or, to the Knowledge of the Sellers, threatened, with respect to
any
Company Employee Benefit Plan or any assets thereof; except for routine claims
for benefits made in accordance with the terms thereof.
(s)Β Β Environmental,
Health, and Safety Matters.
(i)Β Except
as
disclosed in Section 4(s) of the Disclosure Schedule, the Company has complied
in all material respects with all Environmental, Health, and Safety
Requirements.
(ii)Β To
the
Knowledge of the Seller Entities, none of the following exists at any property
or facility operated by the Company: (A) underground storage tanks, (B) friable
asbestos or friable-asbestos-containing material, (C) materials or equipment
containing polychlorinated biphenyls, or (D) landfills, surface impoundments,
or
disposal areas.
(iii)Β To
the
Knowledge of the Seller Entities, the Company has not treated, stored, disposed
of, transported, handled, or released any substance the treatment, storage,
disposal, transport, handling or release of which is governed or otherwise
regulated by any Environmental, Safety or Health Requirement, including without
limitation any Hazardous Substance.
(iv)Β To
the
Knowledge of the Seller Entities, the Company does not own any property or
facility contaminated by any substance referred to in Paragraph 4(s)(iii) above,
such as to give rise to Adverse Consequences, including any liability for
response costs, corrective action costs, personal injury, property damage,
natural resources damages or
19
Β Β Β Β Β Β Β Β Β Β attorney
fees, pursuant to CERCLA
or any other Environmental, Health, and Safety Requirements.
(t)Β Β Notes
and Accounts Receivable.
All
notes and accounts receivable of the Company are reflected properly on its
books
and records. All accounts receivable reflected on the balance sheet at the
Most
Recent Fiscal Month End or on such books have been generated in the Ordinary
Course of Business and reflect bona fide obligations for the payment of goods
or
services provided by the Company.
(u)Β Β Powers
of Attorney.
There
are no outstanding powers of attorney executed on behalf of the
Company.
(v)Β Β Insurance.
The
Company has been covered during the past three (3) years by insurance in scope
and amount customary and reasonable for the businesses in which it has engaged
during the aforementioned period. The Seller has delivered or made available
to
the Buyer complete and correct copies of all such policies together with all
riders and amendments thereto. Such policies are in full force and effect,
and
all premiums due thereon have been paid. The Company has complied in all
material respects with the terms and provisions of such policies. Section 4(v)
of the Disclosure Schedule describes any self-insurance arrangements affecting
the Company. The Seller warrants, represents and covenants that all insurances
in effect as of September 30, 2006 shall be maintained in full force and effect,
according to the terms of the issued policies, through the Closing
Date.
(w)Β Β Intercompany
Liabilities.
The
Seller Entities have caused the Company to cancel, settle or otherwise repay
all
of its liabilities and obligations owed to the Seller or the Parent and their
Affiliates (other than accounts payable incurred in the Ordinary Course of
Business, which have been paid in accordance with their terms), and the Buyer
shall not have any responsibility for those liabilities (other than those
accounts payable incurred in the Ordinary Course of Business).
(x)Β Β Disclosure.
The
representations and warranties of the Seller Entities contained in this
Agreement including the Disclosure Schedule, do not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
herein or necessary in order to make the statements and information contained
herein, in light of the circumstances in which they were made, not
misleading.
(y)Β Β Disclaimer
of Other Representations and Warranties.
Except
as expressly set forth in Section 3(a) and this Section 4, neither the Seller
Entities nor any of their respective Affiliates or Representatives make any
representation or warranty, express or implied, at law or in equity, with
respect toΒ any
of
its or their respective assets, liabilities or operations or the Company,
including, without limitation, representations and warranties of merchantability
or fitness for any particular purpose, title, or non-infringement, and any
such
other representations or warranties are hereby expressly
disclaimed.
Β
5.Β Β INTENTIONALLY
OMITTED
Β
6.Β Β POST-CLOSING
COVENANTS.
The
Parties agree as follows with respect to the period following the Closing.
Β
(a)Β Β 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 may reasonably request, all at the sole cost
and expense of the requesting Party (unless the requesting Party is entitled
to
indemnification therefor under Section 8 below). The
Β
20
Seller
Entities acknowledge and agree that from and after the Closing, the Buyer will
be entitled to possession of all documents, books, records, agreements, and
financial data of any sort relating solely to the Company. The Buyer agrees
to
provide the Seller Entities with reasonable access to all documents, books
and
records of the Company for purposes of the preparation of a balance sheet as
of
the Closing Date and any Tax Returns by the Seller Entities after the Closing
and for any other reasonable purpose.
Β
(b)Β Β 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 such Party, its Affiliates and their counsel
in the contest or defense, make available their personnel and provide such
testimony and access to their books and records as shall be reasonably 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 Section 8 below).
Β
(c)Β Β Transition.
The
Seller Entities will refer all customer inquiries relating to the Company to
the
Buyer from and after the Closing.
Β
(d)Β Β Collective
Bargaining Agreements and Related Obligations.
Effective as of the Closing Date, the Buyer shall cause the Company to take
all
actions necessary for it, and the Company, to be a successor employer and to
assume all liabilities under the Collective Bargaining Agreements, to continue
to contribute to all Union Benefit Plans in accordance with their terms and
the
terms of the applicable collective bargaining agreements.
Β
(e)Β Β Employee
Benefit Plans.Β
(i)Β Except
as
set forth below in this Section 6(e), the Buyer will cause the Company to
continue to employ the non-union employees of the Company as of the Closing
Date
(the βNon-Union
Transferred Employeesβ)
and
the collectively bargained employees of the Company (the βUnion
Transferred Employeesβ
and
together with the Non-Union Transferred Employees, the βTransferred
Employeesβ),
with
the understanding that such employment shall be βat willβ for all employees
other
than those with employment agreements set forth in Section 4(m)(viii) of the
Disclosure Schedule and other than as may be required by the terms of any
Collective Bargaining Agreement. As of the Closing Date, the Buyer shall include
each Non-Union Transferred Employee in a benefit package providing benefits
that
are in the aggregate substantially similar to those provided to such employees
immediately prior to the Closing Date. To the extent that the Collective
Bargaining Agreements contain provisions pertaining to employee benefits, the
Buyer shall provide the Union Transferred Employees with benefits that are
identical to those required to be provided under the terms of such Collective
Bargaining Agreements, as the same shall be amended from time to time. The
Buyer
shall treat all service and compensation credited to each such Transferred
Employee with the Seller and its Affiliates as if such service and compensation
had been rendered to, and paid by, the Buyer for all purposes under the Buyerβs
benefit plans, arrangements, and policies. The
Buyer
shall assume responsibility for the vacation time and sick leave benefits due
to
the Transferred Employees as of the Closing Date.
(ii)Β The
Seller shall be responsible and liable for the expense of all workersβ
compensation claims that arise out of any injury sustained by an employee of
the
Company prior to the Closing Date and in connection with which the Seller
receives written notice within six (6)
Β
21
Β Β Β Β months
after
the Closing Date. The Buyer or the Company shall be liable for the expense
of
all other workersβ compensation claims.
Β
(iii)Β The
Seller and the Company shall, subject to the consummation of the transactions
contemplated by this Agreement, take whatever action is reasonably necessary
or
appropriate to terminate as of the Closing Date (except as otherwise set forth
in this Agreement or the Transition Services Agreement), the participation
of
the Company with respect to the Transferred Employees in all Employee Benefit
Plans of the Seller Entities.
Β
(iv)Β Effective
as of the Closing Date, the Transferred Employees shall no longer make
contributions or receive matching contributions in the Sellerβs 401(k) Plan (the
βSeller
401(k) Planβ),
and
Seller shall have taken all such action prior to the Closing Date as may be
reasonably required to achieve this result. Each Transferred Employee shall,
as
of the Closing Date, become fully vested in his or her account balance under
the
Sellerβs 401(k) Plan. Provided that the Sellerβs 401(k) plan is qualified under
all relevant
provisions of the Code and ERISA,
as
applicable, the Buyer and the Seller shall, to the extent permissible under
applicable laws, take whatever actions are reasonably necessary or appropriate
to effect a trust-to-trust transfer of the accounts of Transferred Employees
in
the Sellerβs 401(k) Plan, into a tax-qualified defined contribution
plan
designated by the Buyer to
accept
the transferred accounts, and the Buyer shall take whatever actions are
reasonably necessary or appropriate in order for such plan to accept the
transferred accounts including any outstanding loan balances and related
promissory notes. The Buyer and the Seller shall cooperate fully to effect
such
transfers.
Β
(v)Β Any
restrictions on coverage for pre-existing conditions, actively at work
requirements, waiting periods, and requirements for evidence of insurability
under the Buyer Welfare Plans shall be waived in the Buyer Welfare Plans for
Transferred Employees, and Transferred Employees shall receive credit under
the
Buyer Welfare Plans for co-payments, deductibles, and out-of-pocket maximums
to
the extent satisfied by the Transferred Employees during the plan year in which
the Closing Date occurs. As soon as practicable after the Closing Date, the
Seller shall deliver to the Buyer a list of the Transferred Employees who had
credited service under an Employee Welfare Benefit Plan of the Seller, together
with each such Transferred Employeeβs service, co-payment, deductible and
out-of-pocket payment amounts under such plan.
Β
(f)Β Β Confidentiality.
The
Parties will treat and hold as such all of the Confidential Information of
the
other Parties, refrain from using any such Confidential Information except
in
connection with this Agreement, and deliver promptly to the Buyer or the Seller
Entities, as the case may be, or destroy (and certify the destruction in
writing), at the request and option of the Buyer or the Seller Entities, as
applicable, all tangible embodiments (and all notes, summaries and copies)
of
such Confidential Information which are in its possession. In the event that
any
Party is requested or required (by oral question or request for information
or
documents in any legal proceeding, interrogatory, subpoena, civil investigative
demand, or similar process) to disclose any Confidential Information of another
Party, that Party will notify the applicable Party promptly of the request
or
requirement so that the applicable Party may seek an appropriate protective
order or waive compliance with the provisions of this Section 6(f). If, in
the
absence of a protective order or the receipt of a waiver hereunder, any Party
is, on the advice of counsel, compelled to disclose any Confidential Information
to any tribunal, that Party may disclose the Confidential Information to the
tribunal; provided,
however,
that
the disclosing Party shall use its reasonable best efforts to obtain, at the
reasonable request of the applicable Party, an order or other assurance that
confidential treatment will be accorded to such portion of the Confidential
Information required to be disclosed as the applicable Party shall
designate.
Β
22
(g)Β Β Covenant
Not to Compete.
As a
material and valuable inducement for the Buyer to enter into this Agreement,
pay
and deliver the Purchase Price to the Seller, and consummate the transactions
provided for herein, and in order to protect the goodwill acquired by the Buyer
pursuant to this Agreement, for a period of two
(2)
yearsΒ from
and
after the Closing Date and so long as the Buyer is not in default hereunder,
the
Seller Entities will not engage directly or indirectly in any
businessΒ that
the
Company
conducts as of the Closing Date in Pennsylvania. If the final judgment of a
court of competent jurisdiction declares that any term or provision of this
Section 6(g) is invalid or unenforceable, the Parties agree that the court
making the determination of invalidity or unenforceability shall have the power
to reduce the scope, duration, or area of the term or provision, to delete
specific words or phrases, or to replace any invalid or unenforceable term
or
provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified after the
expiration of the time within which the judgment may be appealed.Β
Β
(h)Β Β Access
to Information.
For a
period of four (4) years after the Closing Date, upon reasonable notice, the
Parties agree to furnish or cause to be furnished to each other and their
respective Representatives access, during normal business hours, to such
information (including records pertinent to the Company) and assistance relating
to the Company as is reasonably necessary for financial reporting and accounting
matters, the valuation of any claim for indemnification under Section 8 hereof,
the preparation and filing of any Tax Returns, reports or forms or the defense
of any Tax claim or assessment; provided,
however,
that
such access does not unreasonably disrupt the normal operations of the Party
or
Parties furnishing cooperation; provided
further,
however,
that
the Party requesting cooperation shall pay the reasonable out-of-pocket costs
incurred by the Party or Parties furnishing cooperation.
Β
(i)Β Β Nonassignable
Contracts and Permits.
To the
extent that any contract or permit (including any consent, approval or
authorization of any governmental authority) for which assignment to the Buyer
is provided for in this Agreement is not assignable without the consent of
another Person, including an applicable governmental authority, this Agreement
shall not constitute an assignment or an attempted assignment thereof if such
assignment or attempted assignment would constitute a breach thereof. The Seller
Entities and the Buyer shall continue to use their commercially reasonable
efforts to obtain the consent of such other Person to the assignment of any
such
contract or permit to the Buyer in all cases in which such consent is or may
be
required for such assignment. If such consent shall not be obtained, the Seller
Entities and the Buyer shall cooperate with each other in any reasonable
arrangement designed to provide the Buyer with the benefits under any such
contract or permit to the extent lawful and the Buyer shall be obligated to
perform the obligation with respect thereto, any other provision of this
Agreement to the contrary notwithstanding.
Β
(j)Β Β Surety
Bonds.Β
Β
The
Seller Entities shall remain liable to CNA Surety with respect to the
obligations of each of the Seller Entities and each of their respective
Affiliates under all surety bonds outstanding in respect of the Company as
of
the Closing Date (βBondsβ),
and
shall remain liable for the payment of any and all premiums assessed by CNA
Surety in connection with the completion of the Companyβs bonded work as of the
Closing Date.
Β
7.Β Β CONDITIONS
TO OBLIGATION TO CLOSE.
Β
(a)Β Β Conditions
to Obligation of the Buyer.
The
obligation of the Buyer to consummate the transactions to be performed by it
in
connection with the Closing is subject to satisfaction of the following
conditions:
Β
23
(i)Β the
representations and warranties set forth in Section 3(a) and Section 4 above
shall be true and correct at and as of the Closing Date (except for
representations and warranties that expressly speak only as of a specific date
which need only be true and correct as of such date) except for such failures
of
representations and warranties to be true and correct (without giving effect
to
any materiality qualification or standard contained in any such representations
and warranties) which would not reasonably be expected to have, individually
or
in the aggregate, a Material Adverse Affect;
(ii)Β the
Seller Entities shall have performed and complied in all material respects
with
all of the covenants of the Seller Entities hereunder that are required to
be
performed or complied with prior to the Closing;
(iii)Β the
Seller Entities shall have delivered to the Buyer a certificate to the effect
that each of the conditions specified above in Sections 7(a)(i) and (ii) is
satisfied in all respects;
(iv)Β no
action, suit, or proceeding shall be pending 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 or materially delay 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) materially and adversely affect the right of the Buyer to
own
the Company Shares and to control the Company, or (D) materially and adversely
affect 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)Β the
Parties and the Company shall have received all of the authorizations, consents,
and approvals of third parties as set forth in Section 7(a)(v) of the Disclosure
Schedule (collectively, the βRequisite
Consentsβ);
provided,
however,
that
the foregoing condition to the obligation of the Buyer shall not apply to any
failure to obtain any such authorization, consent or approval that arises from
the Buyerβs breach of any representation, warranty or covenant hereunder or the
Buyerβs withdrawal of its application for any such authorization, consent or
approval;Β
(vi)Β the
Seller
shall have delivered to the Buyer on or before the Closing Date a non-foreign
person affidavit as required by Section 1445 of the Code;
(vii)Β the
Buyer
will have received (A) UCC, judgment lien and tax lien searches with respect
to
the Company, the results of which indicate no liens on the assets of the Company
other than those acceptable to the Buyer in its reasonable discretion or as
will
be terminated promptly upon Closing, and (B) assurance that the Security
Agreement and the Bank Guarantee will be terminated promptly upon
Closing;
(viii)Β the
Buyer
shall have received the current updated corporate record book, including without
limitation, bylaws, stock transfer ledger, minutes, resolutions, consents,
and
all other corporate documents of the
Company;
and
Β
(x)Β all
actions to be taken by the Seller Entities 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
the
Buyer.
The
Buyer
may waive any condition specified in this Section 7(a) if it executes and
delivers a writing so stating at or prior to the Closing.
Β
24
(b)Β Β Conditions
to Obligation of the Seller.
The
obligation of the Seller Entities to consummate the transactions to be performed
by them in connection with the Closing is subject to satisfaction of the
following conditions:
Β
(i)Β the
representations and warranties set forth in Section 3(b) above shall be true
and
correct in all material respects at and as of the Closing Date;
Β
(ii)Β the
Buyer
shall have performed and complied in all material respects with all of the
covenants of the Buyer hereunder that are required to be performed or complied
with prior to the Closing;
Β
(iii)Β the
Buyer
shall have delivered to the Seller Entities a certificate to the effect that
each of the conditions specified above in Sections 7(b)(i) and (ii) is satisfied
in all respects;
Β
(iv)Β no
action, suit, or proceeding shall be pending 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 or materially delay 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);
Β
(v)Β the
Parties and the Company shall have received all of the Requisite
Consents;
Β
(vi)Β all
actions to be taken by the 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 Seller
Entities.
Β
The
Seller Entities may waive any condition specified in this Section 7(b) if they
execute and deliver a writing so stating at or prior to the
Closing.
Β
8.Β Β REMEDIES
FOR BREACHES OF THIS AGREEMENT.Β
Β
(a)Β Β Survival.
Unless
otherwise specifically provided herein, all of the covenants, representations
and warranties of the Seller Entities contained in this Agreement shall survive
the Closing and continue in full force and effect for a period of two (2) years
thereafter; provided,
however,
that
(i) the representations and warranties contained in Sections 4(a), 4(b), 4(d),
4(e), 4(j) and 4(s) shall continue in full force and effect until sixty (60)
days after the expiration of the applicable statute of limitation with respect
to such matters, and (ii) the representations and warranties contained in
Section 4(r) shall continue in full force and effect until five (5) years from
the Closing Date. The covenants, representations and warranties of the Buyer
contained in this Agreement shall survive the Closing and continue in full
force
and effect for a period of two (2) years thereafter. This Section 8 shall
survive so long as any covenant, representation, warranty or indemnification
obligation of any Party survives hereunder.
Β
(b)Β Β Indemnification
Provisions for Benefit of the Buyer.
Β
(i)Β Subject
to the limitations contained in this Section 8, after Closing the Seller
Entities hereby jointly and severally agree, to the fullest extent permitted
by
law, to indemnify the Buyer and its officers and directors, shareholders and
Affiliates against, and hold them harmless from, all actions, suits,
proceedings, hearings, investigations, charges, complaints,
Β
25
Β
claims,
demands, injunctions, judgments, orders, decrees, rulings, damages, dues,
penalties, fines, costs, amounts paid in settlement, liabilities, obligations,
Taxes, liens, losses, lost value, expenses, and fees, including court costs
and
reasonable attorneys' fees and expenses and expenses of experts, other than
punitive damages, lost profit, or consequential, special or incidental damages
(a βLossβ),
suffered or incurred by any such indemnified party, whether caused in whole
or
in part by the negligence of the Buyer or the Company, and caused by, resulting
from, or based upon or arising out of the following circumstances and events:
(A) any breach of any representation or warranty of the Seller Entities
contained in this Agreement, (B) any breach of any covenant of the Seller
Entities contained in this Agreement which by its terms requires performance
after the Closing Date, (C) any construction projects or operations completed
prior to or on the Closing Date, (D) any alleged failure, prior to or on the
Closing Date, to provide a safe work environment for employees of the Company,
(E) any claim that the Company is liable to injured employees over and above
the
scope of the Company's workers' compensation insurance for matters arising
on or
prior to the Closing Date, (F) any joint venture or partnership to which the
Company was a joint venturer or partner prior to or on the Closing Date, (G)
conduct arising or occurring prior to or on the Closing Date whereby the Company
violated any Laws relating to employment practices (including, but not limited,
laws relating to age discrimination and sexual harassment), (H) conduct arising
or occurring prior to or on the Closing Date whereby the Company violated any
Laws relating to environmental protection and/or pollution, (I) withdrawal
of
the Company from one or more Union Benefit Plans that are multiemployer pension
plans after the Closing Date which withdrawal results in a final assessment
of
withdrawal liability by any such Plans, following good faith, diligent
contesting of such withdrawal liability by Buyer through arbitration, subject,
however, to the following limitations: (1) in order for this indemnification
to
be effective Buyer shall not, and will not permit its affiliates to (a) cease
to
have an obligation to contribute to such Plan(s) and continue to perform work
in
the jurisdiction of the collective bargaining agreement for which contributions
were previously required; or (b) cease to have an obligation to contribute
to
such Plan(s) and resume such work within five years after the date on which
the
obligation to contribute ceases without renewing its obligation to contribute
at
the time the covered work resumes; or (c) continue its obligations to contribute
to the plan(s) for no more than insubstantial portion of the potentially covered
work in the craft and area jurisdiction of the collective bargaining agreements
under which the Company and its affiliates are bound; or (d) enter into an
agreement to sell assets and not comply with the sale of assets exception from
withdrawal liability under Section 4204 ERISA; or (e) to the extent that the
construction industry rules for withdrawal liability are inapplicable for
whatever reason, completely or partially withdraw from such Plan(s) as defined
in Sections 4203(a) and 4205 of ERISA, respectively; or (f) fail to comply
with
the terms of any Collective Bargaining Agreement or successor agreement; and
(2)
that for purposes of computing any such withdrawal liability for which the
Seller Entities are obligated to indemnify and hold harmless the Buyer, there
shall not be included any withdrawal liability in excess of the withdrawal
liability for any such Plan as of the Closing Date, had the Company withdrawn
as
of said Closing Date or, if less, the amount of such liability calculated as
of
the Closing Date multiplied by a fraction, the numerator of which is the total
amount of contributions for hours worked attributable to that portion, or all
of
the period that Seller Entities owned the ODE business being included in the
applicable multiemployer planβs calculation of withdrawal liability
(βSellerβs
Contribution Historyβ),
and
the denominator of which is the total amount of contributions of the withdrawing
employer (including Sellerβs Contributionβs History) being included in the in
the withdrawal liability calculation, (J) warranty claims relating to work
completed by the Company prior to or on the Closing Date, (K) any claim arising
prior to or on the Closing Date under any surety bond wherein the Company is
the
principal, (L) any Income Taxes of the Company attributable to taxable periods
ending prior to or on the Closing Date, including liabilities of the Company
under consolidated, combined or unitary income or franchise Tax Returns and
liabilities related to the Tax Returns of the Seller Entities, but excluding
any
Taxes for which there is an adequate accrual or reserve on the Preliminary
Balance Sheet or any
Β
26
Β
Taxes
attributable to transactions not in the Ordinary Course of Business occurring
after the Closing which are effectuated or initiated by the Buyer or the
Company, (M) Taxes related to the Overlap Period to the extent allocable to
the
period ending on the Closing Date as set forth in Section 9(c), (N) any product
sold or any services performed by the Company prior to the Closing Date, (O)
any
Third Party Claim relating to wages or other compensation of any current or
former Employees of the Company, any Employee Benefit Plan or any Environmental,
Safety or Health Requirement, in each case arising from events that occurred
prior to the Closing Date, (P) any act of fraud, intentional tort or willful
misconduct by any Seller Entity or the Company prior to the Closing, and (Q)
any
Loss arising out of or incurred in connection with audits of pre-Closing Date
contributions due from the Company to any collectively bargained Union Benefit
Plan.
Β
(ii)Β The
Buyer
acknowledges and agrees that neither the Seller Entities nor any of their
Affiliates shall have any liability under any provision of this Agreement for
any Loss to the extent that such Loss relates to actions taken by or omitted
to
be taken by the Buyer or the Company after the Closing Date or such Loss arises
in the conduct of the business of the Company by the Buyer or the Company after
the Closing Date. Β
Β
(c)Β Β Indemnification
Provisions for Benefit of the Seller Entities and their
Affiliates.
Subject
to the limitations contained in this Section 8, after the Closing, the Buyer
shall, and shall cause the Company to, indemnify the Parent, the Seller and
their respective officers, directors, shareholders and Affiliates against,
and
hold them harmless from, any Loss suffered or incurred by any such indemnified
party, whether caused in whole or in part by the negligence of the Seller or
the
Parent, and caused by, resulting from, arising out of, or relating to (i) any
breach of any
representation or warranty of the Buyer contained in this Agreement,
(ii) any breach of any covenant of the Buyer contained in this Agreement which
by its terms requires performance after the Closing Date, (iii) any
claim, proceeding or suit which relates to actions taken by the Buyer or
the
Company
at any time after the Closing with regard to the employment of the
Company's employees, (iv) the operation of the business of the Company and
the
ownership of the assets of the Company following the Closing Date, (v) any
Tax
attributable to (A) the Taxable periods that begin after the Closing Date,
(B)
the portion of any Tax attributable to the Overlap Period to the extent
allocable to the period commencing after the Closing Date as set forth in
Section 9(c) and (C) any Tax periods that end on or before the Closing Date
if
such Tax is attributable to transactions
not in the Ordinary Course of Business occurring after the Closing Date which
are effectuated or initiated by the Buyer or the
Company,
(vi)
any construction projects or operations completed subsequent to the Closing
Date, subject to Section 8(l) below, (vii) any alleged failure, subsequent
to
the Closing Date, to provide a safe work environment for employees of the
Company, (viii) any claim that a Seller Entity is liable to injured employees
for matters arising subsequent to the Closing Date, (ix) any joint venture
or
partnership to which the Company was a joint venturer or partner subsequent
to
the Closing Date, (x) conduct arising or occurring subsequent to the Closing
Date whereby the Company violated any Laws relating to employment practices
(including, but not limited, laws relating to age discrimination and sexual
harassment), (xi) conduct arising or occurring subsequent to the Closing Date
whereby the Company violated any Laws relating to environmental protection
and/or pollution, (xii) conduct arising or occurring subsequent to the Closing
Date whereby the Company violated any Laws relating to employee benefit plans
and the fiduciary responsibilities of an employer thereunder, (xii) warranty
claims relating to work completed by the Company subsequent to the Closing
Date,
subject to Section 8(l) below, (xiii) any product sold or any services performed
by the
Company
subsequent to the Closing Date, subject to Section 8(l) below, and (xiv) any
act
of fraud, intentional tort or willful misconduct by the Buyer or the
Company
subsequent to the Closing.
Β
(d)Β Β Limitations.
Β
27
(i)Β Except
as
provided in (iii) below, the Seller Entities shall not be liable under Section
8
for Losses hereunder unless the aggregate of all Losses for which the Seller
Entities would, but for this Section 8(d), be liable on a cumulative basis
is an
amount equal to or in excess of $25,000.00 and in such event, indemnification
shall be made by the Seller Entities for only the amount of such Losses in
excess of $25,000.00.
Β
(ii)Β Except
as
provided in (iii) below, the aggregate amount of Losses for which the Seller
Entities shall be liable pursuant to Section 8(b) above shall not exceed an
amount equal to $2,000,000.00.
Β
(iii)Β Notwithstanding
anything hereinabove to the contrary, the limitations set forth in (i) and
(ii)
above shall not apply to Losses for which the Seller Entities shall be liable
pursuant to Sections 8(b)(i)(I), (L) and (M). Any such Losses shall be subject
to the following limitations:
Β
(A)Β the
aggregate amount of Losses for which the Seller Entities shall be liable
pursuant to Section 8(b)(i)(L) and (M) in respect of state and local taxes
only
shall not exceed $500,000.00; provided,
however,
that if
the aggregate amount of such Losses exceeds $500,000.00, the Buyer shall be
indemnified for such excess Losses only to the extent any other Losses covered
by Section 8(b) have not previously been applied against the $2,000,000.00
limitation set forth in Section 8(d)(ii) above;
Β
(B)Β the
aggregate amount of Losses for which the Seller Entities shall be liable
pursuant to Section 8(b)(i)(L) and (M) in respect of federal taxes only shall
not be subject to any limitation; and
Β
(C)Β the
aggregate amount of Losses for which the Seller Entities shall be liable
pursuant to Section 8(b)(i)(I) shall not exceed $3,500,000.00, which Losses
shall, in any event, be subject to the terms of Section 8(b)(i)(I)(2) for
purposes of computing any such Losses.
Β
(iv)Β From
and
after the Closing, no claim for indemnity shall be made by either the Buyer
or
the Seller
Entities
if such claim is based on or related to an event or facts disclosed to such
Party in writing prior to Closing
or of which either the Buyer or a Seller Entity, as the case may be, otherwise
had Knowledge prior to Closing.
Β
(e)Β Β Losses
Net of Insurance, Etc.
The
amount of any Loss for which indemnification is provided under this Section
8
shall be net of (i) in the case of Section 8(b), any accruals or reserves
on the Preliminary Balance Sheet, (ii) any
amounts
recovered by the Indemnified
Party pursuant to any indemnification by or indemnification agreement with
any
third party, (iii) any insurance proceeds or other cash receipts or sources
of
reimbursement received
as an offset against such Loss
(and no
right of subrogation shall accrue to any insurer or third party indemnitor
hereunder) (each such source named in clauses (i), (ii) and (iii), a
βCollateral
Sourceβ),
and
(iv) the fees, costs and expenses of defending or pursuing any claim against
a
Collateral Source. If the amount to be netted hereunder from any payment
required under
Sections 8(b) or 8(c) is determined after payment by the indemnifying party
of
any amount otherwise required to be paid to an Indemnified Party pursuant to
this Section 8, the Indemnified Party shall repay to the indemnifying party,
promptly after such determination, any amount that the indemnifying party
would
not
have had to pay pursuant to this Section 8 had such determination been made
at
the time of such payment, along with the fees, costs and expenses, if any,
of
pursuing such claim.Β Unless
prohibited by law, the Parties agree that any indemnification payment made
hereunder shall be treated as an adjustment to the Purchase Price.
Β
28
(f)Β Β Termination
of Indemnification.
The
obligations to indemnify
and hold
harmless a Person pursuant to Section 8(b) and Section 8(c), shall terminate
when the applicable representation, warranty or covenant terminates pursuant
to
Section 8(a); provided,
however,
that as
to clauses (b) and (c) above, such obligations to indemnify and hold harmless
shall not terminate with respect to any item as to which the Person to be
indemnified shall have, before the expiration of the applicable period,
previously made a claim by delivering a notice
(stating in reasonable detail the basis of such claim) to the Party providing
the indemnification;
and
provided,
further,
that
any such claim shall be deemed to have been withdrawn and waived one year after
being made, unless (A) court proceedings shall have commenced with respect
to
such claim within such one year period, or (B) such claim shall have been waived
or satisfied within such one year period.
Β
(g)Β Β Procedures
Relating to Indemnification.
A Party
seeking indemnification pursuant to Section 8(b) or Section 8(c), (an
βIndemnified
Partyβ)
shall
give prompt notice to the Party from whom such indemnification is sought (the
βIndemnifying
Partyβ)
of the
assertion of any claim or assessment, or the commencement of any action, suit,
audit or proceeding, by a third party in respect of which indemnity may be
sought hereunder (a βThird
Party Claimβ)
and
will give the Indemnifying Party such information with respect thereto as the
Indemnifying Party may reasonably request; provided,
however,
that no
failure to give such notice shall relieve the Indemnifying Party of any
liability hereunder (except to the extent the Indemnifying Party has suffered
actual prejudice thereby). Thereafter, the Indemnified Party shall deliver
to
the Indemnifying Party, within ten (10) business days after the Indemnified
Party's receipt thereof, copies of all notices and documents (including court
papers) received by the Indemnified Party relating to the Third Party Claim.
The
Indemnifying Party shall have the right, exercisable by written notice (the
βNoticeβ)
to the
Indemnified Party within thirty (30) days of receipt of notice from the
Indemnified Party of the commencement of or assertion of any Third Party Claim,
to assume and control the defense of such Third Party Claim, using counsel
selected by the Indemnifying Party and reasonably acceptable to the Indemnified
Party. Should the Indemnifying Party so elect to assume the defense of a Third
Party Claim, the Indemnifying Party will not be liable to the Indemnified Party
for legal expenses subsequently incurred by the Indemnified Party in connection
with the defense thereof. Regardless of whether the Indemnifying Party elects
to
assume the defense of any such Third Party Claim, (a) the Indemnified Party
shall not admit any liability with respect to, or settle, compromise or
discharge, such Third Party Claim without the Indemnifying Party's prior written
consent, which shall not be unreasonably withheld, delayed or conditioned and
(b) the Indemnifying Party will not admit any liability, consent to the entry
of
any judgment or enter into any settlement or compromise with respect to such
Third Party Claim, without the prior written consent of the Indemnified Party,
which shall not be unreasonably withheld, delayed or conditioned, unless such
settlement or judgment involves only the payment of money damages by the
Indemnifying Party and does not involve an injunction or other equitable relief
that may affect an Indemnified Party and includes an unconditional release
of
the Indemnified Party.
The
Indemnifying Party or the Indemnified Party, as the case maybe, shall in any
event have the right to participate, at its own expense, in the defense of
any
Third Party Claim which the other is defending. Whether or not the Indemnifying
Party chooses to defend or prosecute any claim involving a third party, all
the
Parties hereto shall cooperate in the defense or prosecution thereof and shall
furnish such records, information and testimony, and attend such conferences,
discovery proceedings, hearings, trials and appeals as may be reasonably
requested in connection therewith. Such cooperation shall include reasonable
access during normal business hours afforded to the Indemnifying Party to,
and
reasonable retention by the Indemnified Party of, records and information which
are reasonably relevant to such Third Party Claim, and making employees
available on a mutually convenient basis to provide additional information
and
explanation of any material provided hereunder, and the Indemnifying Party
shall
reimburse the Indemnified Party for all its reasonable out-of-pocket expenses
in
connection therewith.
Β
29
(h)Β Β Exclusive
Remedy.
Each
of
the Parties hereto agrees that its sole and exclusive remedy after the Closing
with respect to any and all claims relating to this Agreement, the Company,
the
events giving rise to this Agreement and the transactions provided for herein
or
contemplated hereby, shall be pursuant to the indemnification provisions
contained in this Section 8.
Β
(i)Β Β Collateral
Sources.
Indemnification for any claims under this Section 8 shall not be available
to
any Indemnified Party unless such Indemnified Party uses commercially reasonable
efforts to seek recovery from any Collateral Source for such claim before making
any claim for indemnification by the Indemnifying Party. Any Indemnifying Party
may, in its sole discretion, require any Indemnified Party to grant an
assignment of the right of such Indemnified Party to assert a claim against
any
Collateral Source if the Indemnifying Party has first fully satisfied the claim
by the Indemnified Party. In the event of such assignment, the Indemnifying
Party will pursue such claim at its own expense.
Β
Β Β Β Β Β Β (j)Β Β Β Order
of
Priority.
Notwithstanding anything herein to the contrary, as to any Loss for which the
Seller Entities have agreed to indemnify and hold the Buyer harmless under
this
Section 8 and for which Loss there would be insurance coverage available to
the
parties (both as to defense and liability) , the Seller Entities and the Buyer
agree that in every such instance the insurance coverage of the Seller Entities
shall be deemed primary and the insurance coverage of the Buyer shall be deemed
excess and non-contributory.
Β
Β Β Β Β Β Β Β (k)Β Β
Mitigation.Β Notwithstanding
any other provision of this Agreement to the contrary, any Indemnified Party
shall use commercially reasonable efforts to mitigate all Losses, relating
to a
claim under these indemnification provisions, including availing itself of
any
defenses, limitations, rights of contribution, claims against third Persons
and
other rights at law or equity. The Indemnified Partyβs commercially reasonable
efforts shall include the reasonable expenditure of money to mitigate or
otherwise reduce or eliminate any Loss for which indemnification would otherwise
be due, and the Indemnifying Party shall, to the extent that an Indemnified
Partyβs Loss exceeds the amounts described in Section 8(d)(i), reimburse the
Indemnified Party for its reasonable expenditures (except for any portion of
the
wages, salary, benefits, overhead or other costs attributable to the Indemnified
Party and its officers, directors, employees, agents) in undertaking the
mitigation and shall, to such extent, take such expenses into account in
calculating the aggregate amount of the liability of the Seller Entities for
the
Buyerβs indemnifiable Losses or the Buyerβs liability for the indemnifiable
Losses of the Seller Entities, as the case may be.
Β
Β Β Β Β (l)Β Β
Stop-Loss
Protection for the Benefit of the Buyer.
Section
8(l) of the Disclosure Schedule identifies a group of jobs-in-process which
represents a portion of the total backlog of the Companyβs work as of the
Closing Date (the βStop-Loss
Jobsβ),
and
identifies the expected total gross margin (the βExpected
Gross Marginβ)
anticipated from the completion of the Stop-Loss Jobs (as well as the portion
that each job is expected to contribute to the expected total), as shown on
the
Companyβs work-in-process schedule as of September 30, 2006. The Seller Entities
covenant and agree that the Buyerβs actual total gross margin (the βRealized
Gross Marginβ)
to be
derived from the completion of the Stop-Loss Jobs as a whole shall not be less
than the Expected Gross Margin minus the sum of $100,000.00. Accordingly, upon
completion of all of the Stop-Loss Jobs, the Buyer shall provide the Seller
Entities with the customary documentation of all costs to complete the Stop-Loss
Jobs, as well as a calculation of the Realized Gross Margin, and, within fifteen
days following the Seller Entitiesβ examination of such documentation and
verification that the Realized Gross Margin was less than the Expected Gross
Margin, then the Seller Entities shall pay to the Buyer the positive amount,
if
any, that is equal to the Expected Gross Margin minus the sum of
$100,000.00.
Β
30
9.Β Β TAX
MATTERS.
The
following provisions shall govern the allocation of responsibility as between
the Buyer and the Seller Entities for certain tax matters following the Closing
Date:
Β
(a)Β Β Consolidated
Return.
The
Seller Entities shall cause the
Company
to be included in the consolidated Income Tax Returns of the Seller Entities
for
all periods ending on or prior to the Closing Date for which the
Company
is required to be so included and the Seller Entities shall cause to be prepared
and timely filed any other federal, state, foreign or local Income Tax Return
required or permitted to be filed by the
Company
for all periods ending on or prior to the Closing Date. Copies of all such
Income Tax Returns shall be delivered to the Buyer concurrently with their
filing. There shall also be delivered to the Buyer, within three (3) days
following written request, copies of all supporting materials which evidence
that the Seller Entities have reported items of income and expense for the
Company on the Income Tax Returns in a manner consistent with the agreements
set
forth herein. Any such Income Tax Returns that include periods ending on or
before the Closing Date shall, insofar as they relate to the
Company,
be on a basis consistent with the last previous such Tax Returns filed with
respect to the
Company,
unless the Buyer or the Seller Entities conclude that there is no reasonable
basis for such position under applicable law. Neither the Seller Entities nor
the
Company
(prior to the Closing Date) shall file or cause to be filed any amended Tax
Return or claims for refund with respect to the
Company
without the prior written consent of the Buyer, which consent shall not be
unreasonably withheld, conditioned or delayed. Neither the Buyer nor
the
Company
(after the Closing Date) shall file or cause to be filed any amended Tax Return
or claims for refund with respect to any period ending on or before the Closing
Date without the prior written consent of the Seller Entities, which consent
shall not be unreasonably withheld, conditioned or delayed.
Β
(b)Β Β Tax
Periods Ending on or Before the Closing Date.
The
Buyer shall prepare or cause to be prepared and file or cause to be filed all
Tax Returns for the
Company
other than Income Tax Returns for all periods ending on or prior to the Closing
Date which are required to be filed after the Closing Date. The Buyer shall
provide the Seller Entities with a draft of each such Tax Return described
in
the preceding sentence at least thirty (30) days prior to the due date for
filing such Tax Return. At least fifteen (15) days prior to the due date for
the
filing of such Tax Return, the Seller Entities shall notify the Buyer of the
existence of any reasonable objection the Seller Entities may have to any items
set forth on such draft Tax Return. If after consulting in good faith the Seller
Entities and the Buyer are unable to resolve such objections, such objections
shall be resolved by treating items on such returns in a manner consistent
with
the past practices of the Company with respect to such items unless otherwise
required by law. The Seller Entities shall reimburse the Buyer for Taxes of
the
Company
with respect to such periods within fifteen (15) days after payment by the
Buyer
or the
Company
of such Taxes to the extent such Taxes are not reserved on the Preliminary
Balance Sheet.
Β
(c)Β Β Tax
Periods Beginning Before and Ending After the Closing
Date.
The
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 (the βOverlap
Periodβ),
and
the Buyer shall timely pay, or cause to be paid, all Taxes shown as due on
any
such Tax Returns. The Buyer shall provide the Seller Entities with a draft
of
each such Overlap Period Tax Return at least thirty (30) days prior to the
due
date for filing such Tax Return. At least fifteen (15) days prior to the due
date for the filing of such Tax Return, the Seller Entities shall notify the
Buyer of the existence of any reasonable objection the Seller Entities may
have
to any items set forth on such draft Tax Return. If after consulting in good
faith the Seller Entities and the Buyer are unable to resolve such objections,
such objections shall be resolved by treating items on such returns in a manner
consistent with the past practices of the Company with respect to such items
unless otherwise required by law. The Seller Entities shall pay to the Buyer
within thirty (30) 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
Β
31
ending
on
the Closing Date to the extent such Taxes are not reserved on the Preliminary
Balance Sheet. For purposes of this Section 9, in the case of any Taxes that
are
imposed on a periodic basis and are payable for an Overlap Period, the portion
of such Tax which relates to the portion of such taxable period ending on the
Closing Date shall (i) in the case of any Taxes other than Income Taxes or
sales
and use 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 (ii) in the case of any
Tax
based upon or related to Income Tax or sales and use Tax, be deemed equal to
the
amount which would be payable if the relevant taxable period ended on the
Closing Date. Any credits 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.
Β
(d)Β Β Refunds
and Tax Benefits.
Any Tax
refunds that are received by the Buyer or the
Company,
and any amounts credited against Tax to which the Buyer or the
Company
become entitled, that relate to Tax periods or portions thereof ending on or
before the Closing Date shall be for the account of the Seller Entities, and
the
Buyer shall pay over to the Seller Entities any such refund or the amount of
any
such credit within thirty (30) days after receipt or entitlement thereto. In
addition, to the extent that a claim for refund or a proceeding results in
a
payment or credit against Tax by a Taxing Authority to the Buyer or the
Company
of any amount accrued on the Closing Balance Sheet, the Buyer shall pay such
amount to the Seller Entities within thirty (30) days after receipt or
entitlement thereto.
Β
(e)Β Β Cooperation
on Tax Matters.
Β
(i)Β The
Buyer
and the Seller Entities shall cooperate fully, as and to the extent reasonably
requested by the other Parties, in connection with the filing of Tax Returns
pursuant to this Section 9 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 Buyer and
the Seller Entities 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 the Buyer or the Seller Entities, any extensions
thereof) of the respective taxable periods, and to abide by all record retention
agreements entered into with any Taxing Authority, and (B) to give the other
Parties reasonable written notice prior to transferring, destroying or
discarding any such books and records and, if another Party so requests, the
Buyer or the Seller Entities, as the case may be, shall allow the other party
to
take possession of such books and records.
Β
(ii)Β The
Buyer
and the Seller Entities further agree, upon request, to use commercially
reasonable efforts to obtain any certificate or other document from any Taxing
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).
Β
(iii)Β The
Buyer
and the Seller Entities 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.
Β
32
(iv)Β Notwithstanding
anything to the contrary set forth in this Agreement, the Seller Entities and
the Buyer will use their best efforts to concur with both Tax and GAAP
percentage of completion calculations and accrual method time and material
calculations as of the Closing Date, and will concur on a consistent treatment
as to Tax treatment under the βmid-contractβ provisions of the Code, including,
to achieve such consistency, an appropriate Tax look back
calculation.
Β
(f)Β Β 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.
Β
(g)Β Β Transfer
Taxes.
All
transfer, documentary, sales, use, stamp, registration and other such Taxes
and
fees (including any penalties and interest) incurred in connection with the
consummation of the transactions contemplated by this Agreement (including
any
state gains tax, transfer tax and any similar tax imposed in any state or
subdivision), shall be paid by the Buyer when due, and the Buyer will, at its
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, the Buyer will, and will
cause its Affiliates to, join in the execution of any such Tax Returns and
other
documentation.
Β
(h)Β Β Representation.
Β
(i)Β The
Seller Entities shall have the right to represent the interests of the
Company
in any Tax audit or administrative or court proceeding relating to Tax Returns
for any periods or portions thereof ending on or prior to the Closing Date.
Following the Closing, in the event of an audit of any Tax Return of the Seller
Entities or with respect to which either of the Seller Entities has any
liability, the Buyer shall promptly notify the Seller Entities of such audit
and
the Buyer shall execute, or cause the Company to execute, powers of attorney
under applicable laws authorizing the designated representative of the Seller
Entities to represent the
Company
with respect thereto. The Buyer shall make available or shall cause the
Company
to make available to the Seller Entities, at the expense of the Seller Entities,
any and all books and records of the
Company
and other documents requested by the Seller Entities and shall make available
employees of the
Company
reasonably necessary to enable the Seller Entities to defend any audit or other
proceeding with respect to any such Tax Returns.
Β
(ii)Β The
Seller Entities shall not enter into any settlement of or otherwise compromise
any Tax matter that materially affects or may materially affect the Tax
liability of the Buyer or the
Company
for any period ending after the Closing Date, including the portion of the
Overlap Period that is after the Closing Date, without the prior written consent
of the Buyer, which consent shall not be unreasonably withheld, conditioned
or
delayed. The Seller Entities shall use commercially reasonable efforts to keep
the Buyer fully and timely informed with respect to the commencement, status
and
nature of any Tax matter. The Seller Entities shall allow the Buyer, at its
sole
expense, to make comments to the representative of the Seller Entities,
regarding the conduct of or positions taken in any such proceeding, and consider
such comments in good faith.
Β
(iii)Β Except
as
otherwise provided above, the Buyer shall have the sole right to control any
audit or examination by any Taxing Authority, initiate any claim for refund
or
amend any Tax Return, and contest, resolve and defend against any assessment
for
additional Taxes, notice of Tax deficiency or other adjustment of Taxes of,
or
relating to, the income, assets or operations of the
Company
for all taxable periods ending after the Closing Date; provided,
however,
that
the Buyer shall not, and shall cause its Affiliates (including the Company)
not
to, enter into any settlement of any contest or otherwise compromise any issue
with respect to the
Β
33
portion
of the Overlap Period ending on or prior to the Closing Date and shall not
amend
any Tax Return with respect to any period ending on or prior to the Closing
Date
without the prior written consent of the Seller Entities, which consent shall
not be unreasonably withheld, conditioned or delayed.
Β
(i)Β Β Confidentiality.
Any
information obtained under this Section 9 shall be kept confidential in
accordance with Section 6(f), except as may be otherwise necessary in connection
with filing any Tax Return (or amended Tax Return) or refund claim, determining
any Tax liability or right to a refund, conducting or defending any audit or
other proceeding with respect to Taxes or otherwise effectuating the terms
of
this Agreement.
Β
(j)Β Β SectionΒ 338Β Election.Β
Β
(i)
At
the sole election of the Buyer, to be exercised within ninety (90) days after
the Closing Date, the Seller Entities and Buyer will jointly complete and make
an election under Section 338(h)(10) of the Code (with respect to the Company)
on Form 8023 or in such other manner as may be required by rule or regulation
of
the Internal Revenue Service, and will jointly make an election in the manner
required under any analogous provisions of state or local law as the Buyer
will
designate or as will be required, concerning the transactions contemplated
by
this Agreement (collectively and specifically, the βSection
338(h)(10) Electionβ).
The
Buyer will, with the assistance and cooperation of the Seller Entities, prepare
all such Section 338(h)(10) forms required as attachments to Form 8023 (and
all
forms under analogous provisions of state or local law) in accordance with
applicable Tax laws, and Buyer will deliver such forms and related documents
to
the Seller Entities at least sixty (60) days prior to the due date of filing.
The Seller Entities will deliver to the Buyer at least forty five (45) days
prior to the due date of filing copies of such completed and fully executed
forms as are required to be filed under Section 338(h)(10) of the Code (and
analogous provisions of state and local law). The Buyer will timely file such
forms with the appropriate Tax authorities. The Buyer and Seller Entities will
use commercially reasonable efforts to agree, as soon as practicable after
Closing but in no event later than one hundred twenty (120) days following
the
Closing Date (subject to the dispute resolution mechanism described in clause
(ii) below), on the computation of the modified aggregate deemed sale price
(βMADSPβ)
(as
defined under U.S. Department of Treasury Regulations).
Β
(ii)
If
the Buyer elects to make a βSection 338(h)(10) Election, then the Seller
Entities and the Buyer agree that the Buyer will perform or cause to be
performed an initial valuation of assets and allocation of the Purchase Price
for purposes of Section 338 of the Code at the sole cost and expense of the
Buyer. The Buyer will provide the Seller Entities with drafts of such valuation
of assets and allocation of MADSP (which will be prepared on a basis consistent
with this Section 9(j)) within seventy-five (75) days after the Closing Date.
The Seller Entities will have forty five (45) days to provide the Buyer with
any
objections to such drafts. If the Seller Entities object to the computation
or
allocation by the Buyer of such amounts, and the Buyer and Seller Entities
are
unable to reach agreement on the computation or allocation within thirty (30)
business days after notification by the Seller Entities of its objection, the
Buyer and the Seller Entities will jointly engage an Independent Accountant
to
resolve the disagreement (such resolution to be final and binding upon the
Parties) within ten (10) days thereafter. Any fee payable to the Independent
Accountant in connection with this Section 9(j) will be shared equally by the
Seller Entities and the Buyer. The valuation and allocations determined pursuant
to this Section 9(j) will be used for purposes of all relevant Tax Returns,
reports and filings.
Β
(iii)
In
the event the Buyer decides to make a Section 338(h)(10) Election with respect
to the purchase of the Company Shares, then the Buyer hereby agrees to indemnify
and hold the Seller harmless from any incremental tax liability imposed upon
the
Seller as a result of such election. The amount of the indemnity (the
β338
Indemnity Amountβ)
shall
be equal to the
Β
34
amount
that the Purchase Price must be increased to result in the Seller receiving
the
same after-Tax cash benefit (prior to any reduction for a consolidated return
net operating loss) as would result if the Section 338(h)(10) Election was
not
made. Buyer shall pay the 338 Indemnity Amount within thirty (30) days of
receipt of notice by Seller of the calculation of the 338 Indemnity
Amount.
Β
10.Β Β TERMINATION.
Β
(a)Β Β Termination
of Agreement.
Certain
of the Parties may terminate this Agreement as provided below:
Β
(i)Β the
Buyer
on the one hand and the Seller Entities on the other may terminate this
Agreement by mutual written consent at any time prior to the
Closing;
Β
(ii)Β the
Buyer
may terminate this Agreement by giving written notice to the Seller Entities
at
any time prior to the Closing: (A) in the event a Seller Entity has breached
any
representation, warranty or covenant contained in this Agreement if such breach
would reasonably be expected to have a Material Adverse Effect, the Buyer has
notified the Seller Entities of the breach, and the breach has continued without
cure for a period of ten (10) days after the notice of breach; (B) if the
Closing shall not have occurred on or before the date that is sixty (60) days
following the date hereof; or (C) by reason of the failure of any condition
precedent under Section 7(a) hereof (unless the failure results from the Buyer
itself breaching any material representation, warranty or covenant contained
in
this Agreement); provided,
however,
that
notwithstanding any language to the contrary contained in this Agreement, if
any
such breach described above by a Seller Entity of any representation, warranty
or covenant can be cured by the payment of money, any Seller Entity shall have
the option, but not the obligation, to cure such breach by making payment to
the
Person entitled to payment (e.g., a governmental authority). Upon any election
by a Seller Entity in accordance with the foregoing sentence, the Buyer shall
not be entitled to terminate this Agreement on account of the applicable breach;
providedΒ further,
that in
no event shall any of the Seller Entities be required to expend any monies
in
connection with the Buyerβs breach of any material representation, warranty or
covenant under this Agreement or with respect to the Buyerβs compliance or
noncompliance with any applicable law (including rules, regulations, codes,
plans, injunctions, judgments, orders, decrees, rulings, and charges thereunder)
of federal, state and local governments (and all agencies thereof) whether
arising before or after the Closing;
and
Β
(iii)Β the
Seller Entities may terminate this Agreement by giving written notice to the
Buyer at any time prior to the Closing (A) in the event the Buyer has breached
any material representation, warranty or covenant contained in this Agreement
in
any material respect, a Seller Entity has notified the Buyer of the breach,
and
the breach has continued without cure for a period of ten (10) days after the
notice of breach; (B) if the Closing shall not have occurred on or before the
date that is sixty (60) days following the date hereof; or (C) by reason of
the
failure of any condition precedent under Section 7(b) hereof (unless the failure
results from a Seller Entity itself breaching any material representation,
warranty, or covenant contained in this Agreement).
Β
(b)Β Β Effect
of Termination.
If any
Party terminates this Agreement pursuant to Section 10(a) above, all rights
and
obligations of the Parties hereunder shall terminate without any liability
of
any Party to any other Party (except for any liability of any Party then in
breach); provided,
however,
that
the Confidentiality Agreement shall remain in full force and effect in
accordance with its terms.
Β
35
11.Β Β MISCELLANEOUS.
Β
(a)Β Β 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 the Buyer and the Seller Entities; 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
commercially reasonable efforts to advise the other Parties prior to making
the
disclosure).
Β
(b)Β Β No
Third-Party Beneficiaries.
Except
as provided by Sections 8(b) and 8(c), this Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
Β
(c)Β Β Entire
Agreement.
This
Agreement (including the documents referred to herein), together with the
Confidentiality Agreement which shall remain in full force and effect in
accordance with its terms until the Closing, 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.
Β
(d)Β Β Succession
and Assignment.
This
Agreement 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 the Buyer and the
Seller Entities.
Β
(e)Β Β Counterparts.
This
Agreement may be executed and delivered (including by electronic mail or
facsimile transmission) 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.
Β
(f)Β Β 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.
Β
(g)Β Β Notices.
All
notices, requests, demands, claims, and other communications hereunder will
be
in writing. Any notices or payments required to be delivered to the Seller
Entities after the Closing shall be delivered to the Parent and any consent
or
approval required to be sought of the Seller Entities after the Closing shall
be
sought of and given by the Parent. 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:
Β
If
to the Parent or the Seller:
|
Copy
to
(which shall not constitute notice):
|
Β
|
Β
|
UIL
Holdings Corporation
|
Xxxxxx
and Xxxx LLP
|
000
Xxxxxx Xxxxxx
|
000
Xxxxxxxx Xxxxxx
|
Xxx
Xxxxx, XX 00000
|
Xxxxxxxx,
XX 00000
|
Attn:
Chief Financial Officer
|
Attn:
Xxxxxxx X. Xxxxxxx, Esq.
|
Β
|
Β
|
36
Β
If to the Buyer:
|
Copy to (which
shall not constitute notice):
|
Β | Β |
ODEC
Holding Corp.
Β
000
X. Xxxxxx Xxxxxx
Β
Xxxxxxxxx,
XX 00000
Β
|
Noonan
& Xxxxxx
Β
000
Xxxxxx Xxxxxx
Β
Xxxxxxxxx,
XX 00000-0000
Β
Attn:
Xxxxxxx 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.
Β
(h)Β Β Governing
Law.
This
Agreement shall be governed by and construed in accordance with the domestic
laws of the State of Pennsylvania without giving effect to any choice or
conflict of law provision or rule (whether of the State of Pennsylvania or
any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Pennsylvania.
Β
(i)Β Β Venue.
EACH OF
THE PARTIES HERETO (A) CONSENTS TO SUBMIT ITSELF TO THE EXCLUSIVE PERSONAL
JURISDICTION OF ANY FEDERAL OR STATE COURT LOCATED IN AND FOR ALLENTOWN,
PENNSYLVANIA IN THE EVENT ANY DISPUTE ARISES OUT OF THIS AGREEMENT, (B) AGREES
THAT IT SHALL NOT ATTEMPT TO DENY OR DEFEAT SUCH PERSONAL JURISDICTION BY MOTION
OR OTHER REQUEST FOR LEAVE FROM ANY SUCH COURT AND (C) AGREES THAT IT SHALL
NOT
BRING ANY ACTION RELATING TO THIS AGREEMENT IN ANY COURT OTHER THAN A FEDERAL
OR
STATE COURT SITTING IN AND FOR ALLENTOWN, PENNSYLVANIA.
Β
(j)Β Β Waiver
of Jury Trial.
EACH
PARTY TO THIS AGREEMENT WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT
OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
Β
(k)Β Β Amendments
and Waivers.
No
amendment of any provision of this Agreement shall be valid unless the same
shall be in writing and signed by the Buyer and the Seller Entities. 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.
Β
(l)Β Β 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.
Β
37
(m)Β Β 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.
Β
(n)Β Β Construction.
The
Parties have participated jointly in the negotiation and drafting 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 βincludingβ shall mean βincluding
without limitationβ.
Β
(o)Β Β Incorporation
of Exhibits and Schedules.
The
Exhibits, Annexes, and Schedules identified in this Agreement are incorporated
herein by reference and made a part hereof.
Β
Β
[Signature
page follows.]
Β
38
Β
IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement on the date
first above written.
Β
Β |
ODEC
HOLDINGS CORP.
|
Β |
By:Β Β /s/Β Β
Xxxxx XxxxxxxΒ Β Β
|
Β |
Name:Β
Xxxxx
XxxxxxxΒ Β Β
|
Β |
Title:Β
PresidentΒ Β Β Β
|
Β
Β |
UIL
HOLDINGS CORPORATION
|
Β |
By:
Β /s/
Xxxxxxx X. XxxxxxxxΒ Β
|
Β |
Name:Β
Xxxxxxx X. XxxxxxxxΒ Β
|
Β |
Title:Β Executive
VP & CFOΒ Β
|
Β |
XCELECOM,
INC.
|
Β |
By:
Β /s/
Xxxx X. XxxxxxΒ Β Β
|
Β |
Name:Β
Xxxx X. XxxxxxΒ Β Β
|
Β |
Title:Β
PresidentΒ Β Β Β
|
Β
\14446\26\122205.1
39
Annex
A
Buyer
Disclosure Letter
{See
attached}
40
Annex
B
Disclosure
Schedule
{See
attached}
Β
41