Exhibit 10.36
PURCHASE AGREEMENT
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PURCHASE AGREEMENT dated as of February 11, 2005 by and among WDF Holding
Corp., a Florida corporation ("Buyer"), WDF, Inc., a New York corporation (the
"Acquired Company") and KeySpan Business Solutions, LLC, a Delaware limited
liability company ("Seller").
WHEREAS, Seller is the owner of all of the issued and outstanding shares of
capital stock (the "Shares") of the Acquired Company;
WHEREAS, Seller desires to sell to Buyer and Buyer desires to purchase from
Seller all of the Shares;
NOW, THEREFORE, in consideration of the mutual promises herein set forth
and subject to the terms and conditions hereof, the parties agree as follows:
ARTICLE I. DEFINED TERMS
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1.01 Definitions. As used in this Agreement, terms defined in the preamble
and recitals of this Agreement shall have the meanings set forth therein and the
following terms shall have the meanings set forth below:
"Affiliate" shall mean with respect to any Person, the subsidiaries,
officers, directors, members, shareholders and partners of such Person and any
other Person which directly or indirectly controls, is controlled by or is under
common control with such Person. For purposes of this definition, "control" and
derivations thereof shall mean the power to vote ten percent or more of the
voting securities or equity interests in any Person.
"Agreement" shall mean this Purchase Agreement and all Schedules and
Exhibits hereto, as the same may from time to time be amended.
"Acquired Company" shall mean WDF, Inc., a New York corporation, but shall
not include any of the Subsidiaries of the Acquired Company.
"Acquired Company Liabilities" shall mean all debts, liabilities,
Contracts, commitments, taxes (except as otherwise provided in Section 5.06
hereof) and other obligations of every kind and character of the Acquired
Company (whether accrued, absolute, contingent or otherwise and whether due or
to become due), including, but not limited to, any and all unfunded pension
liabilities or pension withdrawal liabilities, but shall not include those
liabilities of the Acquired Company which are released pursuant to Section
4.01(g) hereof.
"Assumed Agreements" shall mean the following Contracts pursuant to which
Seller or one of its Affiliates (other than the Acquired Company) has (or may
have) an obligation to any of the current or former employees, officers or
directors of the Acquired Company: (a) that certain Employment Agreement, by and
among the Acquired Company, KeySpan Services, Inc. ("KSI"), and Xxxxxx Xxxxxxxx,
dated as of February 9, 2004, (b) that certain Settlement Agreement, Release of
Rights and Claims, Consulting and Non-Competition Agreement, executed on or
about December 23, 2003, by and between the Acquired Company, KSI and Xxxxxxx
Xxxxxxxxx, (c) that certain letter agreement between the Acquired Company and
Xxxxx Xxxxxxxx, dated July 9, 2004; (d) that certain Amended and Restated
Employment Agreement, dated in or about January 2000, by and between the
Acquired Company and Roman, as the same may have been amended or modified from
time to time, and (e) that certain Employment Agreement, dated February 16,
2000, by and between the Acquired Company (as successor by merger to Fourth
Avenue Enterprise Piping Corporation) and English, as the same may have been
amended or modified from time to time.
"Assumed Liabilities" shall have the meaning set forth in Section 2.03
hereof.
"Bonds" shall mean those certain surety, performance and payment bonds
issued for the benefit of the Acquired Company for which KeySpan Corporation or
one of its Affiliates is responsible as a guarantor/indemnitor, including those
listed on Schedule 1.01 hereof.
"Bonded Backlog Report" shall have the meaning set forth in Section 7.07
hereof.
"Cash Requirement" shall have the meaning set forth in Section 2.04 hereto.
"Closing" shall mean the single closing of the purchase and sale of the
Shares contemplated by this Agreement on the Closing Date.
"Closing Date" shall mean the date on which the Closing occurs as agreed by
the parties to this Agreement pursuant to Section 2.05 of this Agreement.
"Confidentiality Agreement" shall mean that certain Confidentiality
Agreement, dated September 21, 2004, by and between KSI and Stelar Mechanical
Corp.
"Consent" shall mean any consent, approval, authorization of, notice to, or
designation, registration, declaration or filing with, any Person.
"Contract" shall mean any contract, lease, agreement or license, to which
Buyer, Seller or the Acquired Company is a party or by which it or any of its
properties or assets may be bound or affected.
"Effective Time" shall mean 5:00 p.m. on February 11, 2005.
"Employee Benefits" shall mean all employee benefit plans, contracts,
agreements, incentives, salary, wages or other compensation plans or
arrangements (whether written or oral) including but not limited to all pension
and profit sharing plans, savings plans, retiree benefits and agreements,
severance agreements and the like covering employees and former employees of the
Acquired Company, for which the Acquired Company may be responsible or with
respect to which it may have any liability.
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"English" shall mean Xxxxxx English, an individual residing at
000 Xxxxxx Xxxxxx, Xxxxxxxx, XX 00000.
"Excluded Liabilities" shall mean those liabilities listed on Exhibit A
hereto.
"Environmental Law" means any Law relating to (a) the protection,
preservation or restoration of the environment (including air, water vapor,
surface water, groundwater, drinking water supply, surface land, subsurface
land, plant and animal life or any other natural resource) or to human health or
safety or (b) the exposure to, or the use, storage, recycling treatment,
generation, transportation, processing, handling, labeling, production, release
or disposal of Hazardous Substances. Environmental Laws include (i) the Federal
Comprehensive Environmental Response Compensation and Liability Act of 1980, the
Superfund Amendments and Reauthorization Act, the Federal Water Pollution
Control Act of 1972, the Federal Clean Air Act, the Federal Clean Water Act, the
Federal Resource Conservation and Recovery Act of 1976 (including the Hazardous
and Solid Waste Amendments thereto), The Federal Solid Waste Disposal and the
Federal Toxic Substances Control Act, the Federal Insecticide, Fungicide and
Rodenticide Act, the Federal Occupational Safety and Health Act of 1970, each as
amended, and (ii) any common law or equitable doctrine (including injunctive
relief and tort doctrines such as negligence, nuisance, trespass and strict
liability) that may impose liability or obligations for injuries or damages due
to, or threatened as a result of, the presence of, effects of or exposure to any
Hazardous Substance.
"Financial Reports" shall have the meaning set forth in Section 7.07
hereof.
"Governmental Authority" shall mean any court or any Federal, state,
municipal or other government department, commission, board, bureau, agency or
instrumentality.
"Hazardous Substance" means any substance presently or hereafter listed,
defined, designated or classified as hazardous, toxic, radioactive, or
dangerous, or otherwise regulated, under any Environmental Law. Hazardous
Substance includes any substance to which exposure is regulated by any
governmental authority or any Environmental Law including, without limitation,
any toxic waste, pollutant, contaminant, hazardous substance, toxic substance,
hazardous waste, special waste, industrial substance or petroleum or any
derivative or by-product thereof, radon, radioactive material, asbestos or
asbestos-containing material, urea formaldehyde foam insulation, lead or
polychlorinated biphenyls.
"Instrument" shall mean any written Contract, deed, assignment, document of
title, note, power of attorney, or obligation.
"KeySpan Representative" shall mean Xxxxxxx X. Xxxxxx, Xxxxxxx Xxxxxx and
Xxxxxx Xxxxxx.
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"Knowledge" (or any variations thereof, including the terms "know" or
"known") means, with respect to Seller, the actual knowledge of Xxxxxxx X.
Xxxxxx, Xxxxxxx Xxxxxx or Xxxxxx Xxxxxx, in each case without independent
inquiry or investigation.
"Xxxxxxxx" shall mean Xxxxxx Xxxxxxxx, an individual residing at 000 Xxxxx
Xxxxx Xxxx., Xxxxxx Xxxxx, Xxxxxxx 00000.
"Laws" shall mean (i) all Federal, state, local or foreign laws, rules and
regulations; (ii) all Orders; (iii) all Permits; and (iv) all Regulatory
Agreements.
"Lien" shall mean any mortgage, option, escrow, pledge, hypothecation,
lien, security interest, financing statement, lease, charge or encumbrance,
easement, conditional sale or other title retention or security agreement or any
other similar restriction, claim or right of others, whether arising by
Contract, operation of Law or otherwise.
"Limited Personal Guarantees" shall mean those certain limited guarantees,
each in a form attached hereto as Exhibits X-0, X-0 and B-3, pursuant to which
each of Roman, English and Xxxxxxxx shall have guaranteed the obligations of
Buyer and the Acquired Company with respect to the obligations of Buyer and the
Acquired Company under Section 9.01(iv) hereof.
"Order" shall mean any judgment, award, order, writ, injunction or decree
issued by any Federal, state, local or foreign authority, court, tribunal,
agency, or other Governmental Authority, or by any arbitrator, to which the
Acquired Company is subject, or to which the Buyer is subject, as the case may
be.
"Ordinary Course of Business" shall mean actions that are consistent with
the past practices of the Acquired Company and are taken in the ordinary course
of the normal day-to-day operations of the Acquired Company.
"Permits" shall mean all permits, licenses, approvals, franchises, notices
and authorizations, Federal, state, local or foreign, necessary to carry on the
business by, or on behalf of, or for the benefit of, the Acquired Company as
currently conducted by, or on behalf of, or for the benefit of, the Acquired
Company, or to own, operate or lease the properties and assets owned, operated
or leased by, or on behalf of, or for the benefit of, the Acquired Company, or
to consummate the transactions contemplated by this Agreement.
"Person" shall mean any individual, a partnership, joint venture,
corporation, trust, limited liability company, unincorporated organization,
Government Authority or other entity.
"Regulatory Agreements" shall mean all Contracts with Federal, state, local
or foreign regulatory authorities to which the Acquired Company or the Buyer, as
the case may be, are parties or which are otherwise binding upon any such Person
or its assets.
"Roman" shall mean Xxxxxxxx Xxxxx, an individual residing at 000 Xxxxxxx
Xxxxx, Xxxxxx, Xxx Xxxx 00000.
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"Subsidiaries" shall have the meaning set forth in Section 5.05 hereof.
"Tax" shall mean any tax or assessment of any federal, state, local, or
foreign jurisdiction, whether imposed by Law or assumed by contract, including
any interest, penalty, or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement filed with or submitted to, or required to be
filed with or submitted to, any Governmental Authority in connection with the
determination, assessment, collection, or payment of any Tax.
"Transitional Services Agreement" shall mean that certain Transitional
Services Agreement between Seller and the Acquired Company, substantially in the
form attached hereto as Exhibit C.
"Zurich" shall mean Zurich American Insurance Company, its subsidiaries and
Affiliates.
1.02 Rules of Construction. Unless the context otherwise
requires: (1) a capitalized term has the meaning assigned to it; (2) an
accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP in effect on the date hereof, and any other reference in
this Agreement to "generally accepted accounting principles" refers to generally
accepted accounting principles on the date hereof; (3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the plural include
the singular; (5) provisions apply to successive events and transactions; (6)
"herein", "hereof", "hereto" and other words of similar import refer to this
Agreement as a whole and not to any particular Article, Section or other
subdivision; and (7) any gender used in this Agreement shall be deemed to
include the neuter, masculine and feminine genders.
ARTICLE II. PURCHASE AND SALE OF THE SHARES
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2.01 Sale of the Shares. At the Closing, Seller will sell, transfer,
assign, convey and deliver to Buyer, and Buyer will purchase, accept and acquire
from Seller the Shares.
2.02. Consideration for the Shares. The consideration to be given by Buyer
for the transfer and sale of the Shares shall be Buyer's agreement to assume the
Assumed Liabilities as set forth in Section 2.03 hereof.
2.03 Assumption of the Assumed Liabilities. In consideration for the
transfer and sale of the Shares to Buyer, on the Closing Date, Buyer shall and
hereby agrees to assume and discharge the following liabilities (collectively,
the "Assumed Liabilities"): (a) the Acquired Company Liabilities; and (b) any
and all liabilities and obligations of Seller and its Affiliates with respect to
the Assumed Agreements. Without limiting the generality of the foregoing, on and
after the Closing Date, Buyer shall observe and perform, and cause to be
observed and performed, all of the obligations, and shall pay and discharge, or
caused to be paid and discharged, all liabilities, which constitute the Assumed
Liabilities; provided, however, that Buyer shall have no responsibility or
obligations with respect to the Excluded Liabilities.
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2.04 Cash Requirement. As of the Effective Time, the Acquired Company shall
have cash in immediately available funds in the account(s) of the Acquired
Company in the aggregate amount of Twenty-Seven Million Ninety-Three Thousand
Nine Hundred Forty-Five Dollars ($27,093,945) (the "Cash Requirement"), of which
Twenty-Five Million Five Hundred Thousand Dollars ($25,500,000) shall have been
paid to the Acquired Company pursuant to that certain Agreement, dated as of
February 11, 2005, by and between the Acquired Company and KeySpan Corporation,
and the remaining amount of One Million Five Hundred Ninety-Three Thousand Nine
Hundred Forty-Five Dollars ($1,593,945) shall have been made by capital infusion
into the Acquired Company by Seller. The funds representing the Cash Requirement
will be used by the Acquired Company only for the purposes described in Section
7.08 hereof. In addition, on the Closing Date, Seller will cause the invoice
submitted by Allied North American Insurance Brokerage Corp. of NY, in the
amount of $906,055, in connection with the Jamaica 2G Bond, to be paid on behalf
of the Acquired Company.
2.05 Closing Date. The Closing Date shall be the date that is three (3)
business days following the date when each of the conditions specified in
Article 3 of this Agreement have been satisfied (or waived in writing by the
party entitled to waive such condition) or at such other time as the parties may
agree (the "Closing Date"). The Closing shall be at the offices of Cullen and
Xxxxxx LLP, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such other place or
places as Buyer and Seller may agree.
2.06 Closing Deliveries.
(a) Seller's Deliveries. At the Closing, Seller shall deliver to Buyer:
(i) Certificates representing the Shares, duly indorsed in blank or
with appropriate stock powers indorsed in blank;
(ii) All stock certificates and stock registration books of the
Acquired Company;
(iii) All minute books of the Acquired Company;
(iv) A closing certificate, duly executed by an officer of Seller,
dated the Closing Date, in form and substance satisfactory to the Buyer,
certifying as to the fulfillment of the closing conditions set forth in
Section 3.02(a) and (b) hereof;
(v) The resignation of all directors of the Acquired Company other
than Roman;
(vi) A certificate of good standing from the New York State Secretary
of State (long form) and Secretary's certificate for the Acquired Company,
certifying, inter alia , to the capacity and authority of the Person
executing this Agreement, as well as the documents enumerated above, on
behalf of the Seller, together with a copy of the authorizing resolutions
for this Agreement;
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(vii) Executed counterpart signature pages of the Transitional
Services Agreement;
(viii) a release, in form and substance acceptable to Buyer, pursuant
to which KSI shall release Roman from his non-compete covenant set forth in
that certain Stock Purchase Agreement, dated as of January 1, 2000, by and
between KSI, Roman and the other parties named therein; and
(ix) a release, in form and substance acceptable to Buyer, pursuant to
which KSI shall release English from his non-compete covenant set forth in
that certain Stock Purchase Agreement, dated as of January 1, 2000, by and
between KSI, English and the other parties named therein.
(b) Buyer Deliveries. At the Closing, Buyer shall deliver to Seller:
(i) A closing certificate, duly executed by Buyer, dated the Closing
Date, in form and substance satisfactory to Seller, certifying as to the
fulfillment of the closing conditions set forth in Section 3.01(a) and (b)
hereof;
(ii) A certificate of good standing from the Florida Secretary of
State (long form), a certificate of authorization to conduct business in
the State of New York and Secretary's certificate for the Buyer,
certifying, inter alia , to the capacity and authority of the party
executing this Agreement, as well as the documents enumerated above, on
behalf of the Seller, together with a copy of the authorizing resolutions
for this Agreement;
(iii) Evidence, reasonably acceptable to the Seller, that as of the
Closing Date the Acquired Company will have obtained appropriate insurance
coverage and each such policy shall have named Seller and its Affiliates as
an additional insured;
(iv) A release, in form and substance reasonably acceptable to Seller,
pursuant to which Roman shall have released Seller and its Affiliates from
any and all obligations of Seller and its Affiliates under and pursuant to
that certain Amended and Restated Employment Agreement, dated on or about
January, 2000, by and between the Acquired Company and Roman, as the same
may have been amended or modified from time to time;
(v) The Bond provided by Chubb Group of Companies for the Jamaica 2G
job (as further described on Schedule 1.01, the "Jamaica 2G Bond") which is
supported by the indemnity of KeySpan Corporation will be replaced by a
bond issued by Zurich, in the same form as the Jamaica 2G Bond, and in a
form and substance acceptable to Seller and the New York City Department of
Environmental Protection ("DEP"), and, to the extent applicable, any other
Governmental Authority, and such replacement bond shall be without recourse
to KeySpan (as defined below). In addition, DEP shall have surrendered the
Jamaica 2G Bond and returned same to Allied.
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(vi) On or before the Closing Date, Zurich shall issue its
unconditional bond, in the form attached as Schedule 2.06 (b)(vi), for an
amount at least equal to $80,000,000 (the "Bond Sum"). Such bond will be
issued for the benefit of KeySpan Corporation, its subsidiaries and their
Affiliates ("KeySpan"), and shall provide that Zurich shall, upon written
notice from KeySpan of any demand made by the Chubb Group of Companies for
performance or payment under the KeySpan General Agreement of Indemnity for
obligations relating to the Bonds set forth on Schedule 1.01 hereof,
promptly satisfy such payment and performance obligations of KeySpan
(without recourse to KeySpan) up to an amount equal to the Bond Sum. Any
premium payable for such bond shall be paid by Buyer on or before Closing;
(vii) A spreadsheet (Excel based), certified by the chief financial
office of the Acquired Company, listing the name, social security number
and date of hire of all 401(K) eligible active employees of the Acquired
Company as of the date of Closing;
(viii) Executed counterpart signature pages of the Transitional
Services Agreement;
(ix) Executed Limited Personal Guarantees;
(x) A release, in form and substance reasonably acceptable to Seller,
pursuant to which Roman shall have released KSI from any and all
obligations of KSI under and pursuant to that certain Stock Purchase
Agreement, dated as of January 1, 2000, by and between KSI, Roman and the
other parties named therein; and
(xi) A release, in form and substance reasonably acceptable to Seller,
pursuant to which English shall have released KSI from any and all
obligations of KSI under and pursuant to that certain Stock Purchase
Agreement, dated as of January 1, 2000, by and between KSI, English and the
other parties named therein.
ARTICLE III. CLOSING CONDITIONS
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3.01. Conditions Precedent to the Obligations of Seller. All obligations of
Seller under this Agreement are subject to the fulfillment, at the option of
Seller, at or prior to the Closing Date, of each of the following conditions:
(a) Buyer's Representations and Warranties. The representations and
warranties of Buyer herein contained shall be true in all material respects on
and as of the Closing Date, except as affected by transactions contemplated or
permitted by this Agreement.
(b) Buyer's Covenants. Buyer shall have performed, in all material
respects, all its obligations and agreements and complied with all its covenants
contained in this Agreement to be performed and complied with by Buyer prior to
the Closing Date.
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(c) No Litigation. No action, suit or proceeding before any Governmental
Authority shall have been commenced and still be pending, no investigation by
any Governmental Authority shall have been commenced and still be pending, and
no action, suit or proceeding by any Governmental Authority shall have been
threatened against Seller or its Affiliates, the Acquired Company, or Buyer
seeking to restrain, prevent or change the transactions contemplated hereby or
questioning the validity or legality of any of such transactions.
(d) Documentation. All matters and proceedings taken in connection with the
sale of the Shares as herein contemplated, including forms of Instruments and
matters of title, shall be reasonably satisfactory to Seller and its counsel.
(e) Consents. Seller shall have received, in form and substance reasonably
acceptable to Seller, any and all Consents necessary or reasonably required for
the consummation of the transactions, including, but not limited to, appropriate
board approvals and Consents from any and all Governmental Authorities.
(f) Other Agreements. On or before the Closing Date, the Limited Personal
Guarantees shall have been duly executed and delivered by all the parties
thereto.
3.02. Conditions Precedent to the Obligations of Buyer. All obligations of
Buyer under this Agreement are subject to the fulfillment, at the option of
Buyer, at or prior to the Closing Date, of each of the following conditions:
(a) Seller's Representations and Warranties. The representations and
warranties of Seller herein contained shall be true in all material respects on
and as of the Closing Date, except as affected by transactions contemplated or
permitted by this Agreement.
(b) Seller's Covenants. Seller shall have performed, in all material
respects, all of its obligations and agreements and complied with all its
covenants contained in this Agreement to be performed and complied with by it
prior to the Closing Date.
(c) No Litigation. No action, suit or proceeding before any Governmental
Authority shall have been commenced and still be pending, no investigation by
any Governmental Authority shall have been commenced and still be pending, and
no action, suit or proceeding by any Governmental Authority shall have been
threatened against Seller or its Affiliates, the Acquired Company, or Buyer
seeking to restrain, prevent or change the transactions contemplated hereby or
questioning the validity or legality of any of such transactions.
(d) Documentation. All matters and proceedings taken in connection with the
sale of the Shares as herein contemplated, including forms of Instruments and
matters of title, shall be reasonably satisfactory to Buyer and to its counsel.
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(e) Other Agreements. On the Closing Date, the Transitional Services
Agreement shall have been duly executed and delivered by Seller.
ARTICLE IV. PRECLOSING COVENANTS
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4.01 Covenants of Seller. Seller agrees that prior to the Closing:
(a) Cooperation. It will use commercially reasonable efforts to cause the
sale contemplated by this Agreement to be consummated, and, without limiting the
generality of the foregoing, to obtain the Consents which may be necessary or
reasonably required in order for Seller to effect the transactions contemplated
hereby.
(b) Transactions Out of Ordinary Course of Business. Except with the prior
written consent of Buyer, which shall not be unreasonably withheld or delayed,
Seller will not permit the Acquired Company to enter into any transaction out of
the Ordinary Course of Business.
(c) Maintenance of Properties, etc. Seller will use commercially reasonable
efforts to cause the Acquired Company to maintain all of its properties in
customary repair, order and condition (taking into consideration the age and
condition thereof), reasonable wear and tear excepted.
(d) Maintenance of Books and Records. Seller will use commercially
reasonable efforts to cause the Acquired Company to maintain its books, accounts
and records in the usual manner on a basis consistent with prior years.
(e) Access to Properties, etc. Seller will use commercially reasonable
efforts to cause the Acquired Company to furnish to Buyer all such documents and
information with respect to the affairs of the Acquired Company as Buyer may
from time to time reasonably request.
(f) Certain Prohibited Transactions. Except with the prior written consent
of the Buyer, Seller will not permit the Acquired Company to (i) enter into any
contract to merge or consolidate with any Person, (ii) change the character of
its business, or sell, transfer or otherwise dispose of any material assets
other than in the Ordinary Course of Business (iii) or purchase any assets or
securities of any Person.
(g) Assumption and Release of Intercompany Liabilities. On or prior to the
Closing Date, (i) Seller will, and Seller will cause its Affiliates to, assume
all intercompany obligations of the Acquired Company and release the Acquired
Company from any and all such debts, liabilities, and obligations of the
Acquired Company to Seller and its Affiliates existing as of the Closing Date,
and (ii) Seller will cause the Acquired Company to distribute all its rights and
interests in any intercompany receivables to Seller. Acquired Company will
release Seller and its Affiliates from any and all debts, liabilities, and
obligations of Seller and its Affiliates to the Acquired Company existing as of
the Closing Date, except for those debts, liabilities, and obligations set forth
on Schedule 4.01(g) hereto and except for the debts, liabilities, and
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obligations specifically contemplated by this Agreement. Buyer hereby consents
and agrees to the assumptions, distributions, and releases described in this
Section 4.01(g). In addition, set forth on Schedule 4.01(g) hereto is a
description of the understanding and agreement of the parties as to the
compromise and treatment of intercompany liabilities and balances prior to the
Closing Date.
(h) Cash Requirement. On or before the Closing Date, the Cash Requirement
shall have occurred.
4.02 Covenants of Buyer. Buyer agrees that prior to the Closing:
(a) Cooperation. Buyer will use its best efforts to cause the sale
contemplated by this Agreement to be consummated, and, without limiting the
generality of the foregoing, to obtain the Consents and Permits which may be
necessary or reasonably required in order for Buyer to effect the transactions
contemplated hereby.
(b) Confidentiality. Buyer will observe all of the obligations of Stelar
Mechanical Corp. under the Confidentiality Agreement.
(c) Bond Matters. Buyer will use its best efforts to cause the delivery of
the items described in Section 2.06(b)(v) and Section 2.06(b)(vi). In connection
with the foregoing, Buyer agrees to pay any and all costs associated with the
procurement of the aforementioned bonds.
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF SELLER
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Seller represents and warrants to Buyer as follows:
5.01 Ownership of the Shares. Seller owns beneficially and of record 79.385
shares of capital stock of the Acquired Company, representing all of the
Acquired Company's issued and outstanding capital stock. All of the Shares are
owned by Seller are validly issued, fully paid and non-assessable and are owned
free and clear of any Liens. Upon the transfer of the certificate or
certificates evidencing the Shares to Buyer, Seller will have transferred good
and valid title to such Shares to Buyer, free and clear of all Liens. There are
no adverse claims (as such term is defined in Section 8-302 of the New York
Uniform Commercial Code) with respect to any of the Shares. There are no
outstanding rights of subscriptions, warrants, calls, options, Contracts or
other agreements of any kind, issued or granted (i) to Seller by the Acquired
Company to purchase or otherwise acquire any securities of the Acquired Company
or (ii) by Seller with respect to the Shares owned by Seller.
5.02 Authorization. Subject to obtaining the Consents listed on Schedule
5.02 hereof, Seller has all requisite legal right, power, authority and capacity
to enter into this Agreement and to perform all of its obligations hereunder.
Except as set forth on Schedule 5.02 hereof, Seller has taken all necessary
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action to authorize the sale hereunder on the terms and conditions of this
Agreement and to authorize the execution, delivery and performance of this
Agreement. Subject to obtaining the Consents listed on Schedule 5.02 hereof,
this Agreement has been duly executed by Seller and constitutes a legal, valid
and binding obligation of Seller enforceable against Seller in accordance with
its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, or other similar laws from time to time in effect, which
affect the enforcement of creditors' rights in general and by general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law). To the Knowledge of Seller, the Acquired
Company has not been known by any other name during the past five years other
than: "WDF/Xxxxxx," "Xxxxxx Mechanical," Fourth Avenue Enterprise Piping Corp.,
KeySpan Business Solutions and derivations of the foregoing.
5.03 Organization; Good Standing. The Acquired Company is a corporation
validly existing and in good standing under the laws of the State of New York.
The Acquired Company has all requisite corporate power and authority to own,
operate and lease its properties and assets and to carry on its business as now
being conducted. The jurisdictions in which the Acquired Company is qualified to
do business is set forth in Schedule 5.03 hereto.
5.04 Capitalization. The authorized capital stock, the par value per share,
the number of issued and outstanding shares and treasury shares of the Acquired
Company is set forth on Schedule 5.04 hereto. Except for the Shares, there are
(i) no shares of capital stock or other equity securities convertible into
equity securities of the Acquired Company outstanding; and (ii) no outstanding
rights of subscriptions, warrants, calls, options, contracts or other agreements
of any kind, issued or granted to any Person by the Acquired Company, or by the
Seller or its Affiliates, to purchase or otherwise acquire any equity securities
or securities convertible into equity securities of the Acquired Company.
5.05 Subsidiaries. Except for the companies identified on Schedule 5.05
hereto (the "Subsidiaries"), the Acquired Company does not own, directly or
indirectly, any capital stock or equity securities of any Person or have any
direct or indirect equity or ownership interest in any business other than the
business conducted by the Acquired Company.
5.06 Taxes, Tax Returns and Payments. Except as set forth on Schedule 5.06,
to the knowledge of Seller, the Acquired Company has duly and timely filed all
Federal, state, local and foreign, income, excise, sales, franchise, use,
withholding, unemployment and other Tax Returns and reports required to be filed
and has duly paid or established adequate reserves for the proper payment of all
Taxes and other governmental charges upon it or its properties, assets, income,
franchises, licenses or sales. To the knowledge of Seller, all such returns and
reports are true, correct and complete in all material respects. To the
knowledge of Seller, there is no material unpaid assessment or proposal by any
Governmental Authority for additional Taxes for which the Acquired Company does
not have adequate reserves for any such fiscal year and no taxing authority has
asserted any such deficiency. To the knowledge of Seller, all monies required to
be withheld by the Acquired Company from employees for income taxes, Social
Security and unemployment insurance taxes have been collected or withheld, and
either paid to the respective governmental authorities or set aside in accounts
for such purpose, or accrued, reserved against, and entered upon the books of
the Acquired Company.
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5.07 Real Property Leased; Title to Assets. Neither Seller, nor any of its
Affiliates (other than the Acquired Company), nor any KeySpan Representative has
entered into, on behalf of and binding upon the Acquired Company, any real
property lease which in not known to the Acquired Company, except for those
listed on Schedule 5.07 hereto.
5.08 Grandfathered Plumbing Status. Neither Seller, nor any of its
Affiliates (except for the Acquired Company), nor any KeySpan Representative has
taken any affirmative act with the New York City Department of Building to
terminate the Acquired Company's status as a "grandfathered plumbing company."
5.09 Insurance. Schedule 5.09 sets forth a list of all insurance policies
carried by or for the benefit of the Acquired Company as of the date hereof,
indicating in each case whether such policy is on an "occurrence" or "claims
made" form. All of the insurance policies listed on Schedule 5.09 are currently
in full force and effect and shall remain in full force and effect through the
Closing Date and there has not been any lapse in any of the material aspects of
the coverage described in such Schedule during the past four years.
5.10 Contracts. Except as set forth on Schedule 5.10 hereto, neither
Seller, nor its Affiliates (except for the Acquired Company), nor any KeySpan
Representative has entered into any agreement which will be binding upon the
Acquired Company from and after the Closing Date.
5.11 Environmental Matters. Except as set forth on Schedule 5.11 hereof,
none of the KeySpan Representatives has received written notice of any claim
against the Acquired Company relating to a violation of any Environmental Law.
5.12 Software Licenses. Schedule 5.12 hereto is a complete and accurate
list of all material software products used in the operation of the Acquired
Company.
5.13 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on by Seller without the
intervention of any other Person in such manner as to give rise to any valid
claim for a finder's fee, brokerage commission or other like payment, except for
Xxxxxx, Del Genio & Xxxxx & Co., LLC ("CDG"). The fees and costs for the
services of CDG shall be paid for by Seller pursuant to Section 7.02 hereof.
5.14 No Implied Representation. Notwithstanding anything contained in this
Article V or any other provision of this Agreement, it is the express intent of
each party hereto that Seller is not making, nor shall Seller be deemed to have
made, any representation or warranty whatsoever, express or implied, beyond
those expressly given in this Agreement, including but not limited to any
implied warranty or representation as to condition, merchantability or
suitability as to any of the properties or assets of the Acquired Company. It is
13
understood that any cost estimates, projections or other predictions contained
or referred to in the Exhibits hereto or otherwise furnished to Buyer are not
and shall not be deemed to be representations or warranties of Seller. In
addition, Buyer each acknowledges and agrees that for purposes of the Schedules
attached hereto, any information, item or other disclosure set forth in any
portion of such Schedules shall be deemed to have been set forth in all other
applicable portions of the Schedules.
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------------------
Buyer represents and warrants to Seller as follows:
6.01 Organization. Buyer is a corporation validly existing under the laws
of the State of Florida and in good standing under the laws of the State of
Florida and New York and has all requisite power and authority and legal right
to own, operate and lease its properties and assets and to carry on its business
as now being conducted.
6.02 Authority. Buyer has full power, authority and legal right to execute
and deliver, and to perform its obligations under this Agreement and to
consummate the transactions contemplated hereunder, and has taken all necessary
action to authorize the purchase hereunder on the terms and conditions of this
Agreement and to authorize the execution, delivery and performance of this
Agreement. This Agreement has been duly executed by Buyer and constitutes a
legal, valid and binding obligation of Buyer enforceable against Buyer in
accordance with its terms except as such enforceability may be limited by
applicable bankruptcy, insolvency, or other similar Laws from time to time in
effect, which affect the enforcement of creditors' rights in general and by
general principles of equity regardless of whether such enforceability is
considered in a proceeding in equity or at law.
6.03 Compliance with Instruments, Consents, Adverse Agreements. Neither the
execution and the delivery of this Agreement by Buyer nor the consummation of
the transactions contemplated hereby will conflict with or result in any
violation of or constitute a default under any term of the certificate of
formation/incorporation or the operating or by-laws of Buyer, or conflict with
or result in any violation of or constitute a default under any Law or Contract
by which Buyer is, or its properties or assets are, bound. Buyer is not a party
to or subject to any Contract, or subject to any charter or other restriction or
any Law which materially and adversely affects the business, operations,
prospects, properties, assets or condition, financial or otherwise, of the
Buyer.
6.04 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on by Buyer without the
intervention of any other Person in such manner as to give rise to any valid
claim for a finder's fee, brokerage commission or other like payment.
6.05 Financing. Buyer has all monies or appropriate binding commitments
from responsible financial institutions (evidence of which has been delivered to
Seller) to provide Buyer with funds sufficient to satisfy the obligations of
Buyer under this Agreement and capital sufficient (taking into account the Cash
Requirement) to conduct the business of the Acquired Company to be acquired
pursuant to this Agreement. All such financing commitments remain in full force
and effect.
14
6.06 Investment Only. Buyer has such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks of
its purchase of the Shares. Buyer confirms that Seller has made available to it
the opportunity to ask questions of the officers and employees of Seller and the
Acquired Company and to acquire such additional information as it desired to
obtain about the business and financial condition of the Acquired Company. Buyer
is acquiring the Shares for its own account for investment purposes only and not
with a view to the distribution or resale thereof. Buyer will not sell or
transfer any of the Shares (or any securities issued in substitution,
reclassification or recapitalization) in violation of applicable Federal, state
or foreign securities Laws.
6.07 Officer Matters. Except for those claims which have been asserted
against the Bonds, neither Roman, nor to the knowledge of Roman, any other
officer or employee of the Acquired Company, has performed any act or taken any
action which could result in liability for KeySpan Corporation.
ARTICLE VII. POST CLOSING COVENANTS
-----------------------------------
7.01 Further Assurances. Following the Closing, at the request of Buyer,
Seller shall execute and deliver to the Buyer such further documents and take
such reasonable action as may be necessary or appropriate to vest in Buyer all
of Seller's right, title and interest in and to the Shares.
7.02 Broker's Fee. Seller shall pay and fully discharge any liability
Seller or the Acquired Company may have on account of any commissions or fees
owed to CDG in connection with the transactions contemplated by this Agreement.
Buyer shall indemnify and hold harmless Seller from any claim or demand for
commission or other compensation by any broker, finder, agent or similar
intermediary (other than CDG) claiming to have been employed by or on behalf of
Buyer and to bear the cost of legal expenses incurred in defending against any
such claim.
7.03 Liability Relating to Employee Benefits. In the event Buyer or the
Acquired Company, as the case maybe, fails to continue to provide all employees
of the Acquired Company with Employee Benefits that are comparable in value in
the aggregate to the Employee Benefits in effect as of the Closing Date, Buyer
and the Acquired Company shall jointly and severally indemnify Seller and its
Affiliates from and against any liability (and related expenses including
without limitation attorneys' fees) resulting from a claim made against Seller
or its Affiliates that such Employee Benefits must be continued.
7.04 No Use of KeySpan Name. From and after the Closing Date, neither Buyer
nor the Acquired Company shall have the right to use the name "KeySpan" or any
derivations thereof in any form whatsoever. Buyer covenants and agrees to
15
promptly remove the name KeySpan any and derivations thereof from any and all
property of the Acquired Company including, but not limited to, letterhead,
promotional material, advertising material, and all service vehicles and to file
a termination of the Acquired Company's d/b/a certificate for use of the assumed
named KeySpan Business Solutions.
7.05 Access to Books and Records; Maintenance. (a) From and after the
Closing Date, Buyer shall, and shall cause the Acquired Company to, permit
Seller and its accountants and employees access during normal business hours
(upon reasonable prior notice) to review and copy, at Seller's expense, all of
the books and records of the Acquired Company, and will cause the Acquired
Company to furnish to Seller all such documents and information with respect to
the affairs of the Acquired Company as well as access to personnel of the
Acquired Company as Seller may from time to time reasonably request in order to
prepare financial statements and Tax Returns of Seller and its Affiliates (or as
otherwise required to comply with audits or inquiries from Governmental
Authorities), to comply with Law and (for so long as their obligations under
Section 7.07 are outstanding) to otherwise verify Buyer and the Acquired
Company's performance of their obligations hereunder. In addition, Buyer shall
cause the Acquired Company to, and the Acquired Company shall, make the Chief
Financial Officer of the Acquired Company available to meet with a
representative of Seller no less frequently than once each calendar month to
discuss matters and answer questions concerning the financial status and
operations of the Acquired Company. Buyer and the Acquired Company agree that a
representative of Seller shall be invited to attend any and all meeting that the
Acquired Company or Buyer have with any Person which has issued surety bonds for
or on behalf of the Acquired Company. Buyer and the Acquired Company agree to
send reasonable advance notice of any such meeting to Seller.
(b) Buyer will cause the Acquired Company to, and the Acquired Company
shall, continue to maintain its books, accounts and records in accordance with
GAAP on a basis consistent with prior years for a period of at least seven (7)
years after the Closing Date and the Acquired Company shall not, during such
seven-year period, discard or destroy any of the books, accounts or records of
the Acquired Company which relate to the period January 2000 to the Closing Date
and thereafter.
7.06 Tax Matters. (a) Seller shall prepare or cause to be prepared and
shall timely file or cause to be timely filed all Tax Returns that are required
to be filed for or with respect to the Acquired Company for all Tax periods
which end on or before the Closing Date, and shall pay all Taxes due with
respect to such Tax Returns. Such Tax Returns shall be prepared in a manner
consistent with prior practice except to the extent required by Law. Seller
agrees to file a stub return for Taxes for the period commencing on January 1,
2005 and ending on the Closing Date, or, in the alternative, to reimburse Buyer
for that portion of Taxes imposed upon the Acquired Company that would be due
for the period commencing January 1, 2005 and ending on the Closing Date.
(b) Buyer shall prepare or cause to be prepared and shall file or cause to
be filed any Tax Returns for or with respect to the Acquired Company that are
required to be filed for periods ending after the Closing Date and shall pay all
16
Taxes due with respect to such Tax Returns. Such Tax Returns shall be prepared
in a manner consistent with prior tax accounting practices and methods of the
Acquired Company except to the extent required by Law.
(c) All transfer, documentary, sales, use, registration and other such
Taxes (including all applicable real estate transfer or gains Taxes) and related
fees (including any penalties, interest and additions to Tax) incurred in
connection with this Agreement and the transactions contemplated hereunder,
except for Seller's federal and state capital gains Taxes, if any, shall be paid
by Buyer, and the Seller and the Buyer shall cooperate in timely making all
filings, returns, reports and forms as may be required to comply with Law.
(d) Each party hereto shall take all commercially reasonable efforts to
terminate and remove the Acquired Company from the Seller's unemployment
insurance tax pool as promptly as possible. In addition, each party hereto
shall, and shall cause its subsidiaries and Affiliates, if any, to, provide to
each of the other parties hereto such cooperation and information as any of them
reasonably may request in filing any Tax Returns, amended Tax Returns or claims
for refund, determining liability for Taxes or a right to refund of Taxes or in
conducting any audit or other proceeding in respect of Taxes.
7.07 Post Closing Completion/Reporting Requirements. (a) From and after the
Closing Date, Buyer shall use commercially reasonable efforts to cause the
Acquired Company to, and the Acquired Company shall, (i) discharge any and all
obligations of the Acquired Company under those Contracts for jobs for which
Bonds have been issued, (ii) complete all those jobs for which a Bond has been
issued in accordance with the terms and conditions of the applicable Contract
and with a level of skill and care required by such applicable Contract, and
(iii) promptly complete any and all warranty work required under such Contracts.
(b) For so long as there is any outstanding obligations, including, but not
limited to completion or warranty obligations, with respect to jobs for which
Bonds have been issued and provided that Seller or its Affiliates are still
obligated as an indemnitor or guarantor with respect to such Bonds, then Buyer
will cause the Acquired Company to, and the Acquired Company shall, prepare and
send to Seller the following: (A) within 30 days after the end of each calendar
quarter (i) a work in progress schedule (for both bonded and non-bonded jobs),
balance sheet, income statement and statement of cash flows for the Acquired
Company, each prepared in a manner consistent with practices of the Acquired
Company in effect as of the Closing Date, (ii) a bonded backlog report ("Bonded
Backlog Report") for the jobs of the Acquired Company which shall include (x) a
projection of costs to be incurred through job completion substantially in the
form shown on Schedule 7.07(b)(A)(ii)(x), (y) a job cash flow summary detailing
the estimated cash flows for each job through completion in a form substantially
in the form of Schedule 7.07(b)(A)(ii)(y), and (z) summary cost to complete
information for each Bonded job in the form attached hereto as Schedule
7.07(b)(A)(ii)(z), (B) within sixty (60) days after June 30 of each year,
financial statements (balance sheet, income statement and statement of cash
flows) for the Acquired Company, reviewed by the Acquired Company's independent
accountants, and (C) within 75 days after the end of any calendar year, audited
financial statements (balance sheet, income statement and statement of cash
flows) for the Acquired Company, certified by the Acquired Company's independent
17
certified public accountants (collectively with (A) and (B), the "Financial
Reports"). Such reports shall be accompanied by a written statement that the
information contained therein has been reviewed by the President and Chief
Financial Officer (or equivalent) of the Acquired Company. If requested by
KeySpan or its Affiliates on or before November 15 of any calendar year, Buyer
and the Acquired Company shall furnish the information required to be provided
under clause (C) above within forty-five (45) days after the end of any calendar
year if KeySpan or its Affiliates require such information within such shorter
time period in connection with the preparation of their financial reports.
7.08 Use of the Cash Requirement. From and after the Closing Date, Buyer
agrees to cause the Acquired Company to, and the Acquired Company agrees that it
will, use the funds representing the Cash Requirement only to pay for valid and
legitimate operating expenses (including payroll expenses and payments for trade
consultants) of the Acquired Company or to discharge debts and payables incurred
by the Acquired Company in the Ordinary Course of Business.
7.09 Bond Related Matters. (a) Promptly after the Closing Date, Buyer
shall, at Seller's request, use commercially reasonable efforts to cooperate
with and assist Seller and its Affiliates in their efforts to cause the sureties
which have issued the Bonds to release Seller and its Affiliates from any and
all indemnity and/or guarantee obligations with respect to the Bonds; provided,
however, that Seller or its Affiliates shall be responsible for any additional
costs charged by such sureties or any replacement sureties in connection with
obtaining such release. Notwithstanding the foregoing, Seller and its Affiliates
shall have the right at any time to elect not to be released from the Bonds and
not to incur any additional costs in connection therewith.
(b) In addition to the obligations of Buyer set forth in Section 7.09(a)
hereof, Buyer agrees to use commercially reasonable efforts, after the
completion of any job for which a Bond has been issued, to cooperate with and
assist Seller and its Affiliates in their efforts to cause the sureties which
have issued such Bond to release Seller and its Affiliates from any and all
indemnity and/or guarantee obligations with respect to such Bond.
(c) Except to the extent required pursuant to the terms of the applicable
Contract, without first obtaining Seller's prior written consent, such consent
not to be unreasonably withheld, Buyer shall not permit the Acquired Company to,
and the Acquired Company shall not, enter into any change orders, amendments or
modifications to any Contract relating to a job for which a Bond has been issued
which either increases the scope of work or costs for such job or delays the
completion date thereof.
7.10 Agreement Concerning Certain Jobs. The parties agree that their
understanding with respect to the treatment of payables, receivables and other
financial items for each of the Ravenswood, Basic Science and Esplanade jobs is
set forth on Schedule 7.10 hereto.
18
7.11 Assignment of Software Licenses. Seller agrees that on or before the
expiration of the Transitional Services Agreement, it shall assign to the
Acquired Company all of the licenses for the software products described on
Schedule 5.12 .
7.12 WDF/Xxxxxx Name. Seller acknowledges and agrees that pursuant to the
transactions contemplated by this Agreement, Seller is transferring to Buyer all
right, title and interest, if any, of Seller and its Affiliates in and to the
name WDF/Xxxxxx, Fourth Avenue Enterprise Piping Corporation and Xxxxxx
Mechanical.
7.13 Post-Closing Prohibited Transactions. Buyer and the Acquired Company
agree that for the period commencing on the Closing Date and ending Sixty (60)
days thereafter, the Acquired Company shall not declare or pay any dividend or
other distribution in respect of shares of capital stock. From and after the
conclusion of such sixty-day period, for so long as there is any outstanding
obligations, including, but not limited to completion or warranty obligations,
with respect to jobs for which Bonds have been issued and provided that Seller
or its Affiliates are still obligated as an indemnitor or guarantor with such
Bonds, the Acquired Company shall be permitted to declare and pay a dividend or
otherwise make a distribution only to the extent that after giving effect to the
payment of such dividend or distribution (A) the tangible net worth of the
Acquired Company exceeds the total aggregate cost to complete all of the jobs
for which a Bond has been issued as set forth on the then current WIP Schedule,
and (B) the sum of Acquired Company's cash on hand and the amount then available
to be drawn under the Line of Credit equals or exceeds Twenty Million Dollars
($20,000,000). At such time as the total aggregate cost to complete all of the
jobs for which a Bond has been issued as set forth on the then current WIP
Schedule is equal to or less than Ten Million Dollars ($10,000,000), Seller will
in good faith consider any reasonable request by Buyer and the Acquired Company
to lower the requirements described in clause (B) above.
7.14 Insurance Matters. Buyer shall maintain insurance policies naming the
Acquired Company as an insured, and naming the Seller and its Affiliates as an
additional insured with respect to periods after the Closing, for a period of
five years after the Closing, with coverage, terms and conditions that are, to
the extent practicable, substantially similar to those in effect for the
Acquired Company on the Closing Date (as procured by Buyer). Within 30 days
after the end of each policy period, if requested, Buyer shall provide evidence
to Seller that such policies are (i) in full force and effect and that (ii)
Seller and its Affiliates have been named as additional insureds for the
subsequent period.
ARTICLE VIII. TERMINATION
-------------------------
8.01 Termination. Anything herein to the contrary notwithstanding, this
Agreement may be terminated and the transactions contemplated hereby abandoned
at any time prior to the Closing Date: (i) by mutual consent of Seller and
Buyer, or (ii) by any party, if the Closing does not occur on or before March
31, 2005 for any reason other than a breach by the Person desiring to terminate
of any material representation, warranty or covenant hereunder.
19
8.02 Effects of Termination. If this Agreement is terminated and the
transactions contemplated hereby are not consummated as described above, Buyer
will observe all of the obligations of Stelar Mechanical Corp. under the
Confidentiality Agreement and this Agreement shall become void and of no further
force and effect, except for the provisions of Sections 10.05 and 10.06 herein.
Nothing herein shall affect any liability any party may have for any breach of
any representation, warranty or covenants prior to such termination.
ARTICLE IX. INDEMNIFICATION
---------------------------
9.01 Obligation of Buyer and Acquired Company to Indemnify. Buyer and the
Acquired Company hereby agree jointly and severally to indemnify, defend, save
and hold Seller (and its Affiliates and their directors, officers, employees and
agents) harmless from and against any and all damage, liability, loss, expense,
assessment, judgment or deficiency of any nature whatsoever (including, without
limitation, reasonable attorneys' fees and other costs and expenses incident to
any suit, action or proceeding) (together "Losses") incurred or sustained by
Seller (and its Affiliates and their directors, officers, employees and agents)
which arises out of or results from (i) the breach of any representation or
warranty made by Buyer herein, (ii) the breach of or failure to perform any
covenant of Buyer set forth in this Agreement, (iii) any and all Assumed
Liabilities, and (iv) any and all Losses relating to the Bonds.
9.02 Obligation of Seller to Indemnify. Seller hereby agrees to indemnify,
defend, save and hold Buyer and the Acquired Company (and its directors,
officers, employees, shareholders and agents) harmless from and against any and
all Losses incurred or sustained by Buyer which arises out of or results from
(i) the breach of any representation or warranty of Seller set forth Article V
above, (ii) the breach of or failure to perform any covenant of Seller set forth
in this Agreement, and (iii) any and all Excluded Liabilities.
The remedy provided in this Section 9.02 is the exclusive remedy of Buyer
for any breach of this Agreement by Seller and is in lieu of any and all any
other remedies that may be available to Buyer hereunder or at law or in equity.
In addition, Seller shall have no liability under: (A) Sections 9.02(i) and
9.02(ii) if, prior to Closing, Roman had (or with the exercise of reasonable
inquiry would have had) knowledge of the matter giving rise to the
indemnification obligation (except that the foregoing reasonable inquiry
requirement shall not apply with respect to the payment of federal and New York
and New Jersey State Taxes, or the preparation or filing of federal and New York
or New Jersey State Tax Returns), (B) Sections 9.02(i) and 9.02(ii) if, prior to
Closing, any other officer of the Acquired Company (other than those officers
which were, as of the date immediately prior to Closing, otherwise employed by
Seller or its Affiliates (other than the Acquired Company)) had knowledge of the
matter giving rise to the indemnification obligation, and (C) Sections 9.02(i),
9.02(ii) and 9.02(iii) if the matter arose or relates to an event that occurred
on or prior to January 31, 2000. With respect to the representation and warranty
set forth in Section 5.11 hereof, Seller shall have no liability for a breach
thereof if the Acquired Company caused, in whole or in part, the matter giving
rise to the claim which should have been disclosed on Schedule 5.11. Seller
shall have no liability under this Section 9.02 until the aggregate amount of
20
Losses exceeds Two Hundred Thousand Dollars ($200,000) Dollars and then only for
the amount of Losses in excess of that amount. The maximum aggregate liability
of Seller for claims of indemnification pursuant to this Section 9.02 shall not
exceed Three Million Dollars ($3,000,000) in the aggregate. The limitations on
liability set forth in the preceding two sentences shall not apply to a claim
for indemnification (C) for a breach of any of the representation and warranties
set forth in Sections 5.01, 5.02, 5.03, 5.04, 5.05, 5.06, or (D) with respect to
the Excluded Liabilities.
9.03 Time Limitation. If the Closing occurs, all representations and
warranties made in this Agreement shall survive the Closing hereunder and
thereafter representations and warranties (but not covenants) shall expire on
the date which is the one year anniversary of the Closing Date, except for (a)
the representations and warranties set forth in Section 5.10, which shall
continue and survive for a period of eighteen months after the Closing Date, and
(b) representations and warranties set forth in Sections 5.01, 5.02, 5.03, 5.04,
5.05 and 5.06, which shall continue until the expiration of the applicable
statute of limitations period.
ARTICLE X. MISCELLANEOUS
------------------------
10.01 Severability. If any provision of this Agreement or the application
of any such provision to any party or circumstances shall be determined by any
court of competent jurisdiction to be invalid and unenforceable to any extent,
the remainder of this Agreement or the application of such provision to such
person or circumstances other than those to which it is so determined to be
invalid and unenforceable, shall not be affected thereby, and each provision
hereof shall be validated and shall be enforced to the fullest extent permitted
by law.
10.02 Waivers. Any failure by any party to this Agreement to comply with
any of its obligations, agreements or covenants hereunder may be waived by
Seller in the case of a default by the Buyer and by Buyer in the case of a
default by the Seller. A party will not be deemed as a consequence of any act,
delay, failure, omission, forbearance or other indulgences granted from time to
time by such party: (1) to have waived, or to be estopped from exercising, any
of its rights or remedies under this Agreement, or (2) to have modified,
changed, amended, terminated, rescinded, or superseded any of the terms of this
Agreement, unless such waiver, modification, amendment, change, termination,
rescission, or supersession is express, in writing and signed by such party. No
single or partial exercise by any party of any right or remedy will preclude
other or further exercise thereof or preclude the exercise of any other right or
remedy, and a waiver expressly made in writing on one occasion will be effective
only in that specific instance and only for the precise purpose for which given,
and will not be construed as a consent to or a waiver of any right or remedy on
any future occasion or a waiver of any right or remedy against any other Person.
10.03 Notices. All notices, consents, demands, requests, approvals and
other communications which are required or may be given hereunder shall be in
writing and shall be deemed to have been duly given if personally delivered
(including overnight courier service) or mailed certified first class mail,
postage prepaid:
21
(a) If to Seller: KeySpan Business Solutions, LLC
00X Xxxxxxxx Xxxx. Xxx.
X.X. Xxx 0000
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Chief Operating Officer
with copies to:
Xxxx Xxxxxx, Esq.
General Counsel
KeySpan Corporation
Xxx XxxxxXxxx Xxxxxx
Xxxxxxxx, XX 00000
And
Xxxxxxx X. Xxxxxx, Esq.
Cullen and Xxxxxx LLP
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
(b) If to Buyer: WDF, Inc. 00
Xxxxx XxxXxxxxxxx Xxxxxxx
Xxxxx Xxxxxx, Xxx Xxxx
and
WDF Holding Corp.
000 Xxxxx Xxxxx Xxxx.
Xxxxxx Xxxxx, XX 00000
with a copy to: Toscano and Associates
000 Xxx Xxxxxxx Xxxx
Xxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
or to such other person or persons at such address or addresses as may be
designated by written notice to the other parties hereunder. Notice shall be
deemed delivered at the time received for personal delivery, or when mailed at a
United States Post Office box or branch office.
22
10.04 Applicable Law. This Agreement shall be governed and construed and
interpreted in accordance with the laws of the State of New York.
10.05 Publicity. The parties agree that no publicity release or
announcement concerning the transactions contemplated hereby shall be issued by
any party without the advance written consent of the other, except as such
release or announcement may be required by Law, in which case the party making
the release or announcement shall show such release or announcement in advance
to the other party.
10.06 Expenses of Sale. Except as otherwise specifically provided herein,
Seller, on the one hand, and Buyer, on the other hand, shall bear their own
direct and indirect expenses incurred in connection with the negotiation and
preparation of this Agreement and the consummation and performance of the
transactions contemplated thereby, including, without limitation, all legal fees
and fees of any brokers, finders or similar agents.
10.07 Binding Effect, Benefits. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and
assigns; provided, however, that nothing in this Agreement shall be construed to
confer any rights, remedies, obligations or liabilities on any person other than
the parties hereto or their respective successors and assigns.
10.08 Entire Agreement; Amendment. This Agreement and the other Instruments
delivered in connection herewith, embodies the entire agreement and
understanding of the parties hereto and supersedes any prior agreement or
understanding between the parties with respect to the subject matter of this
Agreement. This Agreement cannot be amended or terminated orally, but only by a
writing duly executed by the parties.
10.09 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same document.
10.10 Headings. Headings of the sections in this Agreement are for
reference purposes only and shall not be deemed to have any substantive effect.
10.11 Assignment. This Agreement may not be assigned by either party
without the prior written consent of the other.
[SIGNATURES APPEAR ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
BUYER
WDF HOLDING CORP.
By: /s/Xxxxxxxx Xxxxx
-----------------
Name:
Title:
SELLER
KEYSPAN BUSINESS SOLUTIONS, LLC
By:/s/Xxxxxxx Xxxxxx
-----------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President and Chief
Operating Officer
WDF, INC.
By:/s/Xxxxxxxx Xxxxx
-----------------
Name:
Title:
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