AMENDED AND RESTATED ASSET PURCHASE AGREEMENT DATED AS OF FEBRUARY 14, 2007 BETWEEN MASTEC NORTH AMERICA, INC. AND ATLAS TRAFFIC MANAGEMENT SYSTEMS LLC*
Exhibit 10.2
AMENDED AND RESTATED
DATED AS OF FEBRUARY 14, 0000
XXXXXXX
XXXXXX XXXXX XXXXXXX, INC.
AND
ATLAS TRAFFIC MANAGEMENT SYSTEMS LLC*
| * | As amended and restated by the Buyer and Seller on January 24, 2008. |
AMENDED AND RESTATED ASSET PURCHASE AGREEMENT
This AMENDED AND RESTATED ASSET PURCHASE AGREEMENT (as amended and restated herein, the
“Agreement”) is hereby made and entered into as of the 14th day of February, 2007, by and
between ATLAS Traffic Management Systems LLC, a Delaware limited liability company formerly known
as LM-ITS Acquisition Company LLC (“Buyer”), and MasTec North America, Inc., a Florida
corporation (“Seller”).
WHEREAS, the parties have previously entered into that certain Asset Purchase Agreement (the
“Original Agreement”) dated as of November 9, 2006 (the “Original Agreement Date”);
and
WHEREAS, the parties wish to modify certain agreements and understandings set forth in such
Original Agreement by entering into this Amended and Restated Asset Purchase Agreement which amends
and restates such Original Agreement in full.
a. Recitals. The recitals contained herein are true and correct and by this reference
are incorporated herein and made a part of this Agreement.
b. Definitions. Capitalized terms not otherwise defined herein shall have the
respective meanings set forth on Exhibit A.
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a. all accounts receivable (whether current or noncurrent) of the Business, other than the
Excluded Receivables, and all causes of action specifically pertaining to the collection of the
foregoing (collectively, the “Acquired Receivables”);
b. all Inventory of the Business (collectively, the “Acquired Inventory”);
c. all of the Intellectual Property set forth on Schedule 2(c) (the “Acquired
Intellectual Property”);
d. all rights and interest of the Seller under the Contracts, including the Contracts set
forth on Schedule 2(d) (the “Acquired Contracts”);
e. all tangible personal property of the Business, including the machinery, equipment, tools,
supplies, construction in progress, furniture and computer hardware, whether owned, leased or
licensed set forth on Schedule 2(e) (the “Acquired Personal Property”);
f. all projects of the Business set forth on Schedule 2(f), other than projects
completed prior to the Closing Date, and other projects of the Business entered into after the date
of this Agreement in accordance with this Agreement (the “Current Projects”);
g. all other current assets, retainages and other long term assets of the Business as of the
Closing Date, including those set forth on Schedule 2(g);
h. except to the extent set forth in Section 3(h), the originals and/or copies (if
originals are unavailable, including without limitation, copies of the records described in Section
3(h)(i)) of all information and records relating primarily to the Assets or the Business, including
books, records, databases, ledgers, files, documents, correspondence, lists, plats, plans and
designs of fixtures and equipment, specifications, technical information, creative materials,
advertising and promotional materials, studies, reports, sales records, service records, supplier
lists, customer lists, sales order files, engineering data files, purchase order files, supplier
files, other supplier information, customer files, other customer information, environmental
control, monitoring and test records and all other printed or written materials, whether or not
confidential or proprietary;
i. all software, programs and source code, program documentation, manuals, forms, guides, and
other materials with respect thereto, to the extent transferable to Buyer without cost to Seller,
including without limitation Microsoft Office applications, including Microsoft Windows (the
“Transferable Software”), provided that the Oracle software shall not be transferred even
if permitted pursuant to Seller’s license from Oracle;
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j. all expenses that have been prepaid by Seller relating primarily to the operation of the
Business, including but not limited to ad valorem taxes, lease and rental payments;
k. all rights, claims, credits, causes of action or rights of set-off or recoupment against
Persons other than Seller and its Affiliates relating primarily to the Business or the Assets,
including, without limitation, unliquidated rights under manufacturers’ and vendors’ warranties and
rights to insurance proceeds as to the Assets;
l. all Permits used in the Business, to the extent the transfer thereof is permitted by
Applicable Law, including those set forth on Schedule 2(l) (collectively, the “Acquired
Permits”);
m. $2,500,000 of cash (the “Minimum Cash”); and
n. the right to use the letters “ITS” to the extent Seller has any right to use such letters
(for purposes of clarity and notwithstanding anything to the contrary set forth herein, MasTec
makes no representation or warranty as to ownership or the right to use such letters), but without
any reference to MasTec.
a. all cash and cash equivalents (including, without limitation, checking account balances,
certificates of deposit and other time deposits and xxxxx cash) other than the Minimum Cash;
b. all accounts receivable of Seller not related to the Business;
c. accounts receivable of the Business to be designated by Seller prior to Closing on
Schedule 3(c) in the aggregate amount of no more than $2,500,000 (the “Excluded
Receivables”);
d. all Inventory of Seller other than the Acquired Inventory;
e. all rights and interest of Seller under all Contracts other than the Acquired Contracts;
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f. all tangible personal property, including machinery, equipment, tools, supplies,
construction in progress, furniture and fixtures, leasehold improvements and computer hardware,
whether owned, leased or licensed other than the Acquired Personal Property;
g. all projects of Seller other than the Current Projects (for purposes of clarity, the
Current Projects include all Bonded Obligations);
h. (i) all original confidential personnel records of Seller and its Affiliates pertaining to
employees of Seller and/or its Affiliates prior to Closing, including the original records of all
employees of the Business who were employees of Seller and its Affiliates prior to Closing; (ii)
all corporate minute books, charter documents, corporate stock record books and such other books
and records as pertain to the organization, existence or share capitalization of Seller; (iii) all
documents relating to proposals to acquire the Assets by Persons other than Buyer; and (iv) all
accounting and other books and records that do not relate to the Assets;
i. all insurance policies and agreements;
j. all refunds, prepayments, rights of recoupment, and other rights with respect to any Taxes
relating to periods prior to and including the Closing;
k. all intercompany accounts receivable, loans and advances;
l. all of Seller’s assets which are not primarily used in connection with the Business;
m. the name “MasTec” and all other Intellectual Property of the Seller and its Affiliates
other than the Acquired Intellectual Property;
n. all assets related to Excluded Liabilities;
o. all software, programs and source code, program documentation, manuals, forms, guides, and
other materials with respect thereto, other than the Transferable Software;
p. all Permits other than the Acquired Permits;
q. all of Seller’s rights hereunder; and
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r. Notwithstanding anything in this Agreement to the contrary, this Agreement shall not
constitute an assignment of any Contract or Permit if an attempted assignment thereof, without the
consent of a third party thereto, would constitute a breach thereof or would be legally
ineffective. If any such consent is not obtained prior to Closing, including, but not limited to,
consents from customers of those Current Projects set forth on Schedule 3(r), or does not
remain in full force and effect at Closing or if any attempt at an assignment thereof would be
ineffective or would affect the rights of Seller thereunder so that Buyer would not in fact receive
all such rights following the Closing, (i) Buyer and Seller shall use commercially reasonable
efforts, following the Closing, to obtain any consents or approvals not obtained prior to Closing,
and (ii) Buyer and Seller shall use reasonable efforts to enter into a mutually agreeable,
reasonable and lawful arrangement under which Buyer obtains the benefits and assumes the
obligations in respect of such Contract or Permit from and after the Closing, including
subcontracting, sublicensing or subleasing to Buyer, and under which Seller would enforce for the
benefit of Buyer, with Buyer assuming the obligations, any and all rights of Seller against a third
Person party thereto.
a. Subject to the terms and conditions set forth in this Agreement and except for the Excluded
Liabilities, Buyer shall assume all of the Assumed Liabilities. “Assumed Liabilities”
means:
i) all Liabilities of the Business, including all Liabilities pursuant to the Acquired
Contracts (including for liquidated damages) and Acquired Permits and all Liabilities related to
the Assets in all cases other than the Excluded Liabilities;
ii) all accounts payable related to the Business;
iii) all Liabilities in respect of Transferred Employees, and beneficiaries of employees of
the Business, including under or relating to WARN or any similar state or local law;
iv) all Liabilities relating to claims of manufacturing or design defects with respect to any
product sold or service provided by the Business, including Liabilities in respect of
investigations regarding product safety, product recall and related matters;
v) all liabilities and obligations relating to warranty obligations or services with respect
to any product sold or service provided by the Business prior to, on or after the Closing Date;
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vi) all Liabilities relating to the ITS Leases;
vii) all Liabilities relating to the Occupational Safety and Health Act of 1970, as amended,
and any regulations, decisions or orders promulgated thereunder, together with any state or local
law, regulation or ordinance pertaining to worker, employee or occupational safety or health in
effect as the same may be amended, supplemented or superseded, relating to or arising out of the
operation, affairs and conduct of the Business;
viii) all Proceedings (including all Liabilities arising from or related thereto) arising
from, related to or in connection with the Business, including those Proceedings set forth on
Schedule 4(a)(viii), but excluding the Excluded Proceedings (the “Assumed Proceedings”);
ix) a pro rata portion of all ad valorem real property taxes for the portion of the taxable
year ending after the Closing Date;
x) all Environmental Liabilities relating to or arising out of the operation, affairs and
conduct of the Business; and
xi) all Defective Installation Losses.
b. The assumption by Buyer of the Assumed Liabilities, the transfer thereof by Seller, and the
limitations of such transfer shall in no way expand the rights or remedies of any third party
against Buyer or Seller or its Affiliates as compared to the rights and remedies which such third
party would have had against Seller or its Affiliates had Buyer not assumed such liabilities.
Without limiting the generality of the preceding sentence, the assumption by Buyer of the Assumed
Liabilities shall not create any third party beneficiary rights which are not presently granted to
any party under the terms of any Contract which is expressly assumed by Buyer under the terms of
this Agreement.
a. any liability or obligation of the Seller arising under this Agreement;
b. except to the extent provided in Section 12(f), any liability or obligation of the
Seller or its Affiliates with respect to, or arising out of, any employee benefit plan, executive
deferred compensation plan or any other plans or arrangements for the benefit of any employees
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of the Seller or any such Affiliate, including the Transferred Employees (for periods prior to the
Closing in the case of the Transferred Employees);
c. any liability or obligation of the Seller to its shareholders as such or to any Person,
related solely to a claim by such Person, if any, to have a right to acquire any ownership
interests or other securities convertible into or exchangeable for any ownership interests of the
Seller;
d. [Intentionally omitted];
e. any Taxes required to be paid as a result of the transaction contemplated by this
Agreement;
f. any liability of Seller for Taxes (with respect to the Business or otherwise) for periods
prior to the Closing;
g. those Proceedings (including all Liabilities arising from or related thereto) set forth on
Schedule 5(g)(the “Excluded Proceedings”);
h. [Intentionally omitted];
i. [Intentionally omitted]; and
j. all equipment lease payments owing for the month of February 2007 on the leased vehicles
and equipment of the Business in the approximate amount of $170,000.
a. The purchase price for the Assets shall be:
i) $1,000,000 payable in cash to the Seller at Closing (the “Base Purchase Price”) by
wire transfer of immediately available funds to such account or accounts as Seller shall have
designated prior to the Closing Date; plus
ii) additional earn-out consideration (the “Earn-Out”) up to a maximum amount of
$12,000,000 (the “Earn-Out Amount”) which shall be paid as follows:
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b. Earn-Out. In addition to the Base Purchase Price, Seller shall be entitled, to the
extent not prohibited by the terms of any credit facilities in favor of Buyer with lenders (to the
extent any such restrictions exist, all payments which would be payable under this section absent
such restriction shall be deferred until such time as the payment thereof is not prohibited
by the terms of any such credit facilities (including upon a Change of Control upon which all
such deferred accrued amounts shall be paid in accordance with Section 6(b)(iv) below) and Buyer
shall use commercially reasonable best efforts to remove or exclude all such restrictions from the
terms of such credit facilities), to the Earn-Out Amount as provided in this Section 6(b).
i) With respect to the calendar year ending December 31, 2009 and each calendar year
thereafter until December 31, 2013 (the “Earn-Out Period”), Buyer shall pay to Seller an
amount (each such amount, an “Earn-Out Payment”), equal to 25% of the sum of (a) the EBITDA
of the Business during such calendar year (the “Determination Year”), and (b) the EBITDA
Loss Accrual, if any. An “EBITDA Loss Accrual”, which shall only exist if aggregate EBITDA during
the Calculation Period (as defined below) is less than zero, means with respect to any
Determination Year, the aggregate EBITDA of the Business during the Calculation Period.
1) The “Calculation Period” with respect to any Determination Year shall be from
January 1st of the first year of the Earn-Out Period during which EBITDA was less than zero (or, if
an Earn-Out Payment was paid or accrued in a prior Determination Year (a “Payout Year”),
January 1st of the first year of the Earn-Out Period during which EBITDA was less than zero
following the most recent Payout Year) through December 31st of the calendar year immediately
preceding the Determination Year.
2) For purposes of clarity, any portion of the $12,000,000 maximum Earn-Out Amount that has
not (i) accrued in accordance with Section 6(b)(i) or (ii) become payable from Buyer to Seller
following a Change of Control of Buyer as of the time when the final calculation of Cumulative
EBITDA for the calendar year ending December 31, 2013 has been agreed upon by the Buyer and Seller
shall expire and be of no further force or effect.
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exceeds $300,000 per annum, (d) no deduction shall be made
for any legal, accounting or other diligence fees or expenses arising out of this Agreement, the
Original Agreement or the settlement agreement between Buyer and Seller dated January 24, 2008 (the
“Settlement Agreement”) or the transactions contemplated hereby or thereby, (e) EBITDA will exclude
any impact from the “cumulative effect of a change in accounting principles” as that term is
defined pursuant to US GAAP, (f) EBITDA will exclude any non-cash impairment charges, and (g) the
purchase and sales prices of goods and services sold by the Business to Buyer or any of its
Affiliates or purchased by the Business from Buyer or any of its Affiliates shall be adjusted to
reflect the amounts that the Business would have realized or paid if dealing with an independent
party in an arm’s-length commercial transaction. Buyer shall calculate EBITDA based upon the
year-end audited financial statements of the Business and pay the Earn-out Payment, if any, to
Seller no later than the 150th day of each calendar year by wire transfer of same day funds to an
account designated by Seller.
iii) [Intentionally omitted].
1) first, Buyer and/or its equity holders shall retain an amount equal to all Invested
Capital;
2) second, Buyer and/or its equity holders shall retain an amount equal to the Minimum Return;
3) third, Buyer and/or its equity holders shall pay Seller all Earn-Out Payments which were
otherwise accrued and payable pursuant to Section 6(b)(i), but were deferred pursuant to such
section;
4) fourth, Buyer and/or its equity holders shall retain 50% of the remaining proceeds and pay
Seller an amount equal to 50% of the remaining proceeds until Seller has been paid $12,000,000
under this Section 6(b); and
5) finally, 100% of the remaining proceeds shall be retained by Buyer.
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v) For purposes of this Section 6(b), the following terms have the respective meanings below:
1) “Invested Capital” means the aggregate amount of equity contributed to Buyer less the
aggregate amount of equity distributed from Buyer to its equity holders, excluding all management
fees.
2) “Minimum Return” means, a 20% per annum compounded return, on all Invested Capital and for
purposes of clarity, includes all distributions made from Buyer to its equity holders following the
date hereof other than a return of equity as set forth in Section 6(b)(v)(1).
3) “Change of Control” means the occurrence after the date hereof of any of (i) an acquisition
after the date hereof by an individual or legal entity or “group” (as described in Rule 13d 5(b)(1)
promulgated under the Exchange Act of 1934, as amended) of effective control (whether through legal
or beneficial ownership of equity interests of the Buyer, by contract or otherwise) of in excess of
50% of the voting securities, limited partnership interests, general partnership interests or any
other equity interests of the Buyer, (ii) the Buyer merges into or consolidates with any other
Person, or any Person merges into or consolidates with the Buyer and, after giving effect to such
transaction, the equity holders of the Buyer immediately prior to such transaction own less than
50% of the equity interests of the Buyer or the successor entity of such transaction, (iii) the
Buyer sells, transfers, liquidates, leases or licenses its assets, as an entirety or substantially
as an entirety, to another Person and the equity holders of the Buyer immediately prior to such
transaction own less than 50% of the equity interests of such Person, or (iv) the execution by the
Buyer of an agreement to which the Buyer is a party or by which it is bound, providing for any of
the events set forth above in (i) through (iii).
1) the Business shall be managed and operated as a separate, stand alone entity;
2) without the prior written consent of Seller, which consent shall not be unreasonably
withheld, there shall be no expenses imposed upon the Business by any Affiliate of Buyer, including
without limitation, any corporate overhead charges, management fees, general and administrative
expense allocation or charges or expenses relating to accounting, human resources, legal and
compliance and information technology nor will any services or products be provided to the Business
by an Affiliate of Buyer, except at rates that are at least as
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favorable as the Business could obtain from third parties; provided that Buyer shall be
permitted to pay a management fee of no more than $25,000 per month to an Affiliate of Buyer;
3) Buyer shall not (A) declare or pay any dividends, (B) make any distributions or payments to
its members or to any Affiliate of Buyer or any Affiliate of a member of Buyer (including without
limitation repayment of loans), (C) purchase, redeem, retire, defease or otherwise acquire for
value any of its equity interests now or hereafter outstanding, (D) return any capital to its
members (or the equivalent Persons thereof) as such, or (E) permit any of its subsidiaries to do
any action set forth in (A), (B), (C), or (D) other than making distributions solely to Buyer;
provided that Buyer may (1) pay management fees to an Affiliate of Buyer in the aggregate maximum
amount of $25,000 during any month, and (2) make distributions to its members in an amount not to
exceed the federal income tax liability of such members as a result of Buyer’s income, including
late penalties, if any, actually incurred by such members as a result of the timing of Buyer’s tax
distribution payments; and
4) Buyer shall not enter into any credit facility or other arrangement of any kind whatsoever
which (A) restricts the payment of the amounts set forth in Section 6(b)(iv) following a Change of
Control and payment in full of all amounts due under such credit facility or arrangement, (B)
restricts the payment of the amounts set forth in Section 6(b)(iv)(3) and/or (4) in a different
manner than the payment of the amounts set forth in Section 6(b)(iv)(1) and/or (2) following a
Change of Control and payment in full of all amounts due under such credit facility or arrangement,
or (C) permits Buyer to take any action prohibited by Section 6(b)(vi)(3), unless such credit
facility or arrangement concurrently permits payment of all amounts accrued under Section 6(b).
c. Allocation of Purchase Price. The Base Purchase Price and the Earn-Out shall be
referred to collectively as the “Purchase Price”. Prior to Closing, the Seller shall
provide to Buyer a proposed allocation of the Purchase Price plus liabilities deemed assumed (the
“Tax Purchase Price”) for the sale of the Assets. The Tax Purchase Price shall be
allocated using principles that are consistent with the Internal Revenue Code of 1986, as amended.
Prior to Closing, the Buyer and Seller shall mutually agree on a final allocation (the “Final
Allocation”) of the Tax Purchase Price, which Final Allocation will be attached hereto as
Schedule 6(c). After the Closing and in respect of periods prior to January 24, 2008, the
parties shall make consistent use of the allocation, fair market value and useful lives specified
on Schedule 6(c) for all tax purposes and in all filings, declarations and reports with the
Internal Revenue Service (“IRS”) and similar reports for state, local, or foreign purposes
in respect thereof, including the reports required to be filed under Section 1060 of the Internal
Revenue Code of 1986, as amended. In connection with the amendments to this Agreement made as of
January 24, 2008 and the Settlement Agreement, Buyer and Seller have mutually agreed on an amended
final allocation (the “Amended Final Allocation”), which is attached hereto as Schedule
6(c)(1). No later than March 15, 2008, Buyer shall prepare and deliver IRS Forms 8594 to Seller to
be filed with the IRS in accordance with Schedule (6)(c) and Schedule 6(c)(1),
respectively. In any proceeding related to the determination of any tax, neither Buyer nor Seller
shall contend or
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represent that such Final Allocation or Amended Final Allocation, as the case may be, is not a
correct allocation for the applicable tax period.
7. [Intentionally omitted].
a. Status and Authority. Seller is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Florida and has the corporate power to execute and
deliver this Agreement and the Settlement Agreement. The execution and delivery of this Agreement
and the Settlement Agreement and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action. This Agreement and the
Settlement Agreement have been duly and validly executed and delivered by Seller and constitute
valid and binding obligations of Seller, enforceable against it in accordance with their terms.
i) THE SELLER DISCLAIMS ALL LIABILITY AND RESPONSIBILITY FOR ANY REPRESENTATION, WARRANTY,
STATEMENT MADE OR INFORMATION COMMUNICATED (WHETHER ORALLY OR IN WRITING) TO THE BUYER (INCLUDING
ANY OPINION, INFORMATION OR ADVICE WHICH MAY HAVE BEEN PROVIDED TO BUYER OR ANY OF ITS AFFILIATES
BY ANY SHAREHOLDER, PARTNER, DIRECTOR, OFFICER, EMPLOYEE, ACCOUNTING FIRM, LEGAL COUNSEL, OR OTHER
AGENT, CONSULTANT, OR REPRESENTATIVE OF SELLER), INCLUDING THOSE REPRESENTATIONS AND WARRANTIES
INCLUDED IN SECTION 8 OF THE ORIGINAL AGREEMENT AND THIS AGREEMENT PRIOR TO THE AMENDMENTS MADE ON
JANUARY 24, 2008.
ii) THE SELLER MAKES NO REPRESENTATIONS OR WARRANTIES TO THE BUYER REGARDING THE BUSINESS AND
THE ASSETS AND ANY AND ALL STATEMENTS MADE OR INFORMATION COMMUNICATED BY SELLER OR ITS
REPRESENTATIVES OUTSIDE OF THIS AGREEMENT (INCLUDING BY WAY OF THE DOCUMENTS CONTAINED IN THE DATA
ROOM), WHETHER VERBALLY OR IN WRITING, ARE DEEMED TO HAVE BEEN SUPERSEDED BY THIS AGREEMENT, IT
BEING INTENDED THAT NO SUCH PRIOR STATEMENTS OR COMMUNICATIONS SHALL SURVIVE THE EXECUTION AND
DELIVERY OF THIS AGREEMENT.
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a. Status and Authority. Buyer is, and at the Closing will be, a limited liability company,
duly organized, validly existing, and in good standing under the laws of the State of Delaware with
full limited liability company power and authority to conduct business as contemplated to be
conducted. The execution and delivery of this Agreement and the Settlement Agreement and the
consummation of the transactions contemplated hereby and thereby have been validly authorized by
all appropriate limited liability company action. This Agreement and the Settlement Agreement have
been duly and validly executed and delivered by Buyer and constitute valid and binding obligations
of Buyer, enforceable against it in accordance with their terms.
b. Litigation. There are no suits, actions, claims, arbitrations, administrative, or other
proceedings or governmental investigations pending or threatened against or affecting Buyer in any
court or before or by any federal, state, local, or other governmental department or agency that
seek to restrain or prohibit the consummation, legality or validity of this Agreement, the
Settlement Agreement or the transactions contemplated hereby or thereby or which would materially
impair the ability of the Buyer to consummate such transactions.
c. Agreement Not in Breach of Other Instruments. The execution and delivery of this Agreement
and the Settlement Agreement by Buyer, the consummation by Buyer of the transactions contemplated
hereby and thereby, and the fulfillment by Buyer of the terms hereof and thereof, will not violate
any provision of the formation or operating documents of Buyer nor will they result in the breach
of any term or provision of, or constitute a default under, or conflict with, or cause the
acceleration of any obligation under, any loan agreement, note, debenture, indenture, mortgage,
deed of trust, lease, contract, agreement, or other obligation of any description to which Buyer is
a party or by which it is bound, or constitute a violation of Applicable Law.
d. Investment Intent. The Buyer has sufficient knowledge and experience in financial and
business matters so as to be capable of evaluating the merits and risks of its purchase of the
Assets, and the Buyer is capable of bearing the economic risks of such investment, including a
complete loss of its investment. In evaluating the suitability of the investment, the Buyer has
not relied upon any representations or other information (whether oral or written and including any
projections or supplemental data) made or supplied by or on behalf of the Seller or any Affiliate,
employee, agent or other representative of the Seller.
e. [Intentionally omitted].
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f. Solvency. Upon and immediately after the consummation of the transactions contemplated by
this Agreement and the Settlement Agreement and the incurrence of any indebtedness for borrowed
money used to finance such transactions, the assets of the Buyer will exceed the liabilities of the
Buyer on a US GAAP basis. In connection with the consummation of the transactions contemplated by
this Agreement and the Settlement Agreement and the incurrence of any indebtedness for borrowed
money used to finance such transactions, to the best knowledge after reasonable inquiry of Buyer’s
management as of the date of the Settlement Agreement, Buyer (i) has not incurred debts that are
beyond its ability to pay as such debts mature and (ii) has sufficient cash flows to perform all of
its obligations under this Agreement, the Settlement Agreement and the General Agreement of
Indemnity.
g. Inspections. Buyer acknowledges that Seller has made no representation or warranty as to
the prospects, financial or otherwise, of the Business. Buyer agrees that it shall accept the
Assets and the Assumed Liabilities as they exist on the Closing Date based on Buyer’s inspection,
examination, determination with respect thereto as to all matters, and without reliance upon any
express or implied representations or warranties of any nature, whether in writing, orally or
otherwise, made by or on behalf of or imputed to Seller.
h. As Is Where Is. BUYER ACKNOWLEDGES AND AGREES THAT SELLER IS TRANSFERRING THE ASSETS TO
BUYER AS IS AND WHERE IS, IN THEIR EXISTING STATE AND PHYSICAL CONDITION AND LOCATION WITH ALL
FAULTS. BUYER ACKNOWLEDGES AND AGREES THAT SELLER EXPRESSLY DISCLAIMS, ALL REPRESENTATIONS AND
WARRANTIES, EITHER EXPRESS OR IMPLIED, AS TO ANY MATTER RELATING TO THE ASSETS INCLUDING, WITHOUT
LIMITATION: (A) THE CONDITION OF THE ASSETS, (B) THE MERCHANTABILITY, SUITABILITY OR THE FITNESS
FOR ANY PARTICULAR PURPOSE, (C) THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE ASSETS, (D) THE
CONFORMITY TO SPECIFICATIONS, (E) THE OPERATION, PERFORMANCE OR MAINTENANCE OF THE ASSETS, AND (F)
THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE. BUYER AGREES THAT ALL SUCH
RISKS, OBLIGATIONS AND LIABILITIES AS AMONG BUYER AND SELLER ARE TO BE BORNE BY BUYER. THE
PROVISIONS OF THIS SECTION HAVE BEEN NEGOTIATED BY THE PARTIES AND SUCH PROVISIONS ARE INTENDED TO
BE A COMPLETE EXCLUSION AND NEGATION OF REPRESENTATIONS AND WARRANTIES BY SELLER, EXPRESS OR
IMPLIED, WITH RESPECT TO THE ASSETS, WHETHER PURSUANT TO ANY LAW NOW OR HEREAFTER IN EFFECT, IN
EQUITY OR OTHERWISE.
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a. [Intentionally omitted].
b. [Intentionally omitted].
c. [Intentionally omitted].
i) Seller covenants and agrees, as an inducement to Buyer to enter into this Agreement and to
consummate the transactions contemplated hereby, that Seller will not, directly or indirectly, for
the four-year period immediately following the Closing in the United States or any territories of
the United States carry on or participate in the ownership, management or control of a Competing
Business; provided that Seller and its Affiliates shall not be prohibited from continuing to
provide to customers of the Business or any other Persons the services Seller and its Affiliates
provide as of the Closing Date (excluding the services provided by the Business and not otherwise
provided by Seller or its Affiliates). In addition, neither Seller nor its Affiliates shall be
prohibited from providing or participating in the ownership, management or control of a business
which provides duct, duct bank, conduit and Lighting Work (build, engineer, install, maintain) or
communications, satellite, energy and broadband services (including municipal WIFI, WIMAX and other
wireline or wireless broadband technologies). Furthermore, Seller and its Affiliates shall not be
prohibited from providing or participating in the ownership, management or control of a business
which provides (i) any services outside the United States and its territories, or (ii) services to
the Department of Transportation of the State of Texas which Seller and its Affiliates provide as
of the Closing Date (excluding the services provided by the Business and not otherwise provided by
Seller or its Affiliates). Notwithstanding the foregoing, the restrictions set forth in the
preceding sentence shall not prohibit the Seller and its Affiliates from providing or participating
in the ownership, management or control of a business which provides any services within the States
of Arizona, Nevada, Colorado, Oklahoma, New Mexico, Missouri or Minnesota. “Lighting Work”
includes lighting structures or installing/maintaining/supporting other equipment or lighting
structures.
ii) Nothing contained in this Section 11(d) shall limit or restrict the right of Seller to
hold and make investments in securities of any Person that has securities listed on a national
securities exchange or admitted to trading privileges thereon or actively traded in a generally
recognized over-the-counter market, provided that the aggregate equity interest therein of Seller
does not exceed (5%) of the outstanding shares or interests in such Person at the time of Seller’s
investment therein provided that Seller does not take any active management role. Notwithstanding
any provisions of this Section 11(d) to the contrary, if Seller acquires securities of any
Person that is engaged in a Competing Business, Seller shall not be deemed to be in violation of
this Section 11(d), provided that at the time of acquisition the Competing Business
16
represents less than 25% of the gross revenues of the acquired Person for the acquired
Person’s most recently completed fiscal year.
iii) From and after the date of this Agreement until the fifth anniversary of the Closing
Date, Seller shall not, without the prior written approval of Buyer, directly or indirectly solicit
any individual who was a non-exempt (within the meaning of the Fair Labor Standards Act)
Transferred Employee to terminate his or her employment relationship with Buyer; provided, however,
that the foregoing shall not apply to individuals hired as a result of the use of an independent
employment agency (so long as the agency was not directed to solicit a particular individual or a
class of individuals that could only be satisfied by employees of Buyer) or as a result of the use
of a general solicitation (such as an advertisement) not specifically directed to employees of
Buyer. From and after the date of this Agreement until the fourth anniversary of the Closing Date,
Seller will not induce or seek to induce any contractor, supplier, client or customer of Buyer to
terminate its relationship with Buyer in respect of the Business.
iv) Seller recognizes and agrees that a breach by Seller of any of the covenants and
agreements in this Section 11(d) could cause irreparable harm to Buyer, that Buyer’s
remedies at law in the event of such breach would be inadequate, and that, accordingly, in the
event of such breach a restraining order or injunction or both may be issued against Seller, in
addition to any other rights and remedies that may be available to Buyer under Applicable Law. If
this Section 11(d) is more restrictive than permitted by the Applicable Laws of the
jurisdiction in which Buyer seeks enforcement hereof, this Section 11(d) shall be limited
to the extent required to permit enforcement under such Applicable Laws.
x. Xxxxx on Current Projects. From and after the date of this Agreement, Seller shall
maintain and continue at its sole expense all performance and completion bonds, and all collateral
currently securing such bonds, relating to the Current Projects and use commercially reasonable
efforts to obtain the consent of the issuer of each such bond to the continuation of such bond
after the Closing.
f. [Intentionally omitted].
g. [Intentionally omitted].
a. Confidentiality. Buyer acknowledges and agrees that the Confidentiality Agreement dated
August 21, 2006 (the “NDA”) executed by Buyer remains in full force and effect, and Buyer’s
obligations thereunder remain unaffected by the execution and delivery of this Agreement; provided,
however, that Seller acknowledges and agrees that Buyer has directly
17
or indirectly contacted and communicated with executives or other employees of the Seller and
that such contacts and communications shall not constitute a breach by Buyer of the NDA.
b. Nonsolicitation of Employees, etc. From and after the Original Agreement Date until the
fifth anniversary of the Closing Date, Buyer shall not, without the prior written approval of
Seller, directly or indirectly solicit any individual who is a non-exempt (within the meaning of
the Fair Labor Standards Act) employee of Seller or its Affiliates to terminate his or her
employment relationship with Seller or any such Affiliate; provided, however, that the foregoing
shall not apply to Transferred Employees, employees of the Business as of the date hereof who are
not Transferred Employees or individuals hired as a result of the use of an independent employment
agency (so long as the agency was not directed to solicit a particular individual or a class of
individuals that could only be satisfied by employees of Seller or its Affiliates) or as a result
of the use of a general solicitation (such as an advertisement) not specifically directed to
employees of Seller or its Affiliates. Buyer recognizes and agrees that a breach by Buyer of any
of the covenants and agreements in this Section 12(b) could cause irreparable harm to
Seller, that Seller’s remedies at law in the event of such breach would be inadequate, and that,
accordingly, in the event of such breach a restraining order or injunction or both may be issued
against Buyer, in addition to any other rights and remedies that may be available to Seller under
Applicable Law. If this Section 12(b) is more restrictive than permitted by Applicable
Laws of the jurisdiction in which Seller seeks enforcement hereof, this Section 12(b) shall
be limited to the extent required to permit enforcement under such Applicable Laws.
i) The Buyer acknowledges and agrees that the Seller has not made any representations or
warranties regarding the Seller, the Business, the Assets or the operations of the Business or
otherwise in connection with the transactions contemplated hereby. Without limiting the generality
of the foregoing, the Buyer acknowledges and agrees that no statements or information contained in
the Data Room or any presentation regarding the Business (including any management presentation or
facility tour), including but not limited to any projections, forecasts and predictions, and any
other estimates, data, financial information, documents, reports, statements (oral or written),
summaries, abstracts, descriptions, presentations (including any management presentation or
facility tour), memoranda or offering materials, is or shall be deemed to be a representation or
warranty by the Seller to the Buyer, and that Buyer has not relied thereon in determining to
execute this Agreement and proceed with the transactions contemplated hereby. Buyer further
acknowledges and agrees that materials it has received from Seller include projections, forecasts
and predictions relating to the Business; that there are uncertainties inherent in attempting to
make such projections, forecasts and predictions; that Buyer is familiar with such uncertainties
and is taking full responsibility for making its own evaluation of the adequacy and accuracy of all
projections, forecasts, predictions and information so furnished; that Buyer shall not have any
claims against Seller or its officers, directors or Affiliates with respect thereto; and that Buyer
has not relied thereon. The Buyer acknowledges that no Person has been authorized by the Seller to
make any representation or warranty regarding the Seller, the Business, the assets or operations of
the Business or otherwise in
18
connection with the transactions contemplated hereby and, if made, such representation or
warranty may not be relied upon as having been authorized by the Seller.
ii) The Buyer acknowledges and agrees that it (i) has made its own inquiry and investigation
into, and, based thereon, has formed an independent judgment concerning, the Seller and the
Business, and (ii) has conducted such investigations of the Seller and the Business as the Buyer
deems necessary to satisfy itself as to the operations and conditions thereof, and will rely solely
on such investigations and inquiries. The Buyer further acknowledges and agrees that it will not
at any time assert any claim against the Seller or any of its present and former directors,
officers, managers, partners, shareholders, employees, agents, Affiliates, consultants, investment
bankers, attorneys, advisors or representatives, or attempt to hold the Seller or any of such
Persons liable, for any inaccuracies, misstatements or omissions with respect to the information
furnished by Seller or such Persons concerning the Seller or the Business.
iii) Buyer acknowledges that the Purchase Price has been negotiated based upon Buyer’s express
agreement that Buyer will acquire the Business, the Assets and Assumed Liabilities in “as is”
condition and on a “where is” basis, without any representation or warranty of any kind, express or
implied. Further, without limiting any representation, warranty or covenant of Seller expressly
set forth herein, Buyer acknowledges that it has waived and hereby waives as a condition to Closing
any further due diligence reviews, inspections or examinations with respect to the Business,
including without limitation with respect to engineering, environmental, title, survey, financial,
operational, regulatory and legal compliance matters.
d. Leased Assets. At the Closing, the Buyer, at its sole option and expense, shall have the
option to (i) pay off, refinance or take an assignment of the leases (as legally permitted) on the
vehicles and equipment of the Business, and in connection therewith shall obtain the release of the
Seller for all liability under such leases or (ii) execute a sublease with the Seller on all of the
leases on the vehicles and equipment of the Business consistent with the terms of Seller’s lease.
As soon as practicable (but in any event within sixty (60) days) after the Closing Date, the Buyer,
at its sole option and expense, shall (i) pay off, refinance or take an assignment of the leases on
the other leased assets of the Business, and in connection therewith shall obtain the release of
the Seller for all liability under such leases or (ii) execute a sublease with the Seller on all of
the other leased assets of the Business consistent with the terms of Seller’s lease.
i) On and after the Closing Date, the Buyer shall preserve all books and records of the
Business for a period of ten years commencing on the Closing Date, and thereafter, shall not
destroy or dispose of such records without giving notice to the Seller of such
19
pending disposal and offering the Seller such records. In the event that the Seller has not
requested such materials within ninety (90) days following the receipt of notice from the Buyer,
the Buyer may proceed to destroy or dispose of any books and records of the Business.
ii) From and after the Closing Date, the Buyer shall (a) afford the Seller and its
representatives reasonable access upon reasonable prior notice during normal business hours, to all
employees, officers, properties, agreements, records, books and affairs of the Buyer relating to
the Business, including, without limitation, the engineering documentation library, and provide
copies at Seller’s cost of such information concerning the Business as the Seller may reasonably
request in connection with the preparation of any Tax Returns, any judicial, quasi-judicial,
administrative, tax, audit or arbitration proceeding, the preparation of any financial statements
or reports required in accordance with Applicable Law, in connection with the defense of any third
party claims or in connection with the computation of the Earn-Out and (b) cooperate fully with the
Seller for any proper purpose.
f. Employment Matters. At Closing, MasTec Services, Inc. will terminate the employment of the
employees listed on Schedule 12(f) (the “Transferred Employees”) and the Buyer
shall immediately hire the Transferred Employees and establish and make available a group medical
plan for all Transferred Employees and their dependants that is substantially similar to the group
medical plan available to the Transferred Employees immediately prior to the Closing under Seller’s
plan. Seller’s plan will terminate as to the Transferred Employees at the Closing. The Buyer
shall credit the Transferred Employees with all service of the Transferred Employees recognized
under any Employee Benefit Plan or Benefit Arrangements as service with the Buyer for purposes of
eligibility to participate, vesting and levels of benefits available, under all Buyer Plans (as
defined below). The Buyer shall waive any coverage waiting period, pre-existing condition and
actively-at-work requirements under the Buyer’s employee benefit plans, policies, programs, or
arrangements (the “Buyer Plans”) and shall provide that any expenses incurred before the
Closing Date by a Transferred Employee (and his or her dependents) during the calendar year of the
Closing shall be taken into account for purposes of satisfying the applicable deductible,
coinsurance and maximum out-of-pocket provisions, and applicable annual and/or lifetime maximum
benefit limitations of the Buyer Plans. The Buyer Plans shall not require contributions by
Transferred Employees at a rate that exceeds the rate in effect for other similarly situated
employees of the Buyer. Seller shall use commercially reasonable efforts to assist Buyer in its
effort to hire Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxxx Xxxxx and the other Transferred Employees following
the Closing. Notwithstanding anything to the contrary set forth herein, under no circumstances
shall Seller’s obligation pursuant to the immediately preceding sentence require Seller to expend
any funds or take any actions that would otherwise disrupt the operations of Seller’s business.
g. Project Completion. Seller is currently obligated to complete the Current Projects,
including for purposes of clarity all Bonded Obligations. Following the Closing, Buyer shall
complete each of the Current Projects, including for purposes of clarity all Bonded Obligations, as
expeditiously as possible in accordance with the terms of such projects and will use best efforts
to collect all payments due and payable thereunder as soon as practicable
20
following the Closing Date. Upon completion of each Current Project, including for purposes
of clarity all Bonded Obligations, Buyer shall pay in full all vendors and contractors on a timely
basis and shall use best efforts to have all surety and other bonds and liens removed in connection
with such projects. Buyer shall provide evidence of compliance with this Section 12(g),
including copies of all payment documentation, upon the reasonable request of Seller. For purposes
of clarity, all references in this Agreement to completion of Current Projects by Buyer shall mean
completion to the satisfaction and written acknowledgement of the third party or parties for whom
the Current Project is performed.
h. Seller’s Intellectual Property. Following the Closing, Buyer shall not, and shall cause
all of its Affiliates not to, use the Intellectual Property of the Seller other than the Acquired
Intellectual Property, including without limitation: (i) ceasing and desisting from all use of the
XxxXxx Xxxxx and all variations thereof in any form as previously registered, licensed or used by
the Seller or the Business in connection with any goods or services, or used as business names,
trade names, fictitious names and any other uses, as well as all use of any of the other
Intellectual Property of the Seller and its Affiliates; and (ii) removing, destroying, erasing or
otherwise eliminating all references to any of the foregoing Intellectual Property from any signage
and any other tangible matter, electronic displays or other depictions of any kind which are of a
permanent nature and from all clothing, signs, materials, vehicles and any other tangible matter or
electronic systems or media in any form owned, controlled, leased, licensed, operated, possessed or
otherwise used by Buyer or any of its Affiliates.
i. No Dividends, Distributions or Payments. Following the Closing and until such time as all
Current Projects, including for purposes of clarity, all Bonded Obligations (as defined in
Section 19(f)) are fully completed, Buyer shall not (A) declare or pay any dividends, (B)
make any distributions or payments to its members or to any Affiliate of Buyer or any Affiliate of
a member of Buyer (including without limitation repayment of loans), (C) purchase, redeem, retire,
defease or otherwise acquire for value any of its equity interests now or hereafter outstanding,
(D) return any capital to its members (or the equivalent Persons thereof) as such, or (E) permit
any of its subsidiaries to do any action set forth in (A), (B), (C), or (D) other than making
distributions solely to Buyer; provided that Buyer may (1) pay management fees to an Affiliate of
Buyer in the aggregate maximum amount of $25,000 during any month, and (2) make distributions to
its members in an amount not to exceed the federal income tax liability of such members as a result
of Buyer’s income, including late penalties, if any, actually incurred by such members as a result
of the timing of Buyer’s tax distribution payments.
a. [Intentionally omitted].
b. [Intentionally omitted].
21
c. [Intentionally omitted].
d. [Intentionally omitted].
i) Following the Closing, with the assistance of one or more representatives of Seller, Buyer
shall use commercially reasonable efforts to collect the Excluded Receivables on behalf of Seller
and pay vendors or contractors to obtain required lien releases. Buyer shall afford Seller and its
representatives reasonable access upon reasonable prior notice during normal business hours, to all
employees, officers, properties, agreements, records, books and affairs of Business relating to the
Excluded Receivables. From and after the Closing, upon Buyer’s receipt of Excluded Receivables,
Buyer shall be deemed to have received such payment in trust for the benefit of Seller, and Buyer
shall turn over to Seller any payments so received in the form received (subject to any necessary
endorsement) no later than five (5) Business Days following such receipt.
ii) If and to the extent that Seller shall, from and after the Closing, receive payment of any
Acquired Receivables, Seller shall be deemed to have received such payment in trust for the benefit
of Buyer, and Seller shall turn over to Buyer any payments so received in the form received
(subject to any necessary endorsement) no later than five (5) Business Days following such receipt.
14. [Intentionally omitted].
15. [Intentionally omitted].
16. [Intentionally omitted].
a. The consummation of the purchase and sale transaction contemplated under this Agreement
(the “Closing”) shall take place at the offices of Xxxxxxxxx Xxxxxxx, P.A., at 0000
Xxxxxxxx Xxxxxx, Xxxxx, XX 00000, or at such other date, time and place as may be agreed upon by
Buyer and Seller, on February 14, 2007 (the “Closing Date”).
b. Notwithstanding the execution and delivery of this Agreement on February 14, 2007, for all
purposes hereunder, including, but not limited to accounting, payroll,
employee benefits and system transition, the Closing shall be deemed to have occurred and
22
become effective as of 12:01 a.m. EST on February 1, 2007 (the “Effective Time”). Notwithstanding
any assignment instrument which purports to assign from Seller to Buyer any subcontract or lease or
the performance of such subcontract or lease made in connection with the Current Projects,
including for purposes of clarity, all Bonded Obligations, prior to the Effective Time, Buyer and
Seller acknowledge and agree that such assignments shall be deemed to occur and become effective as
of the Effective Time. For the avoidance of doubt, the Buyer is purchasing all the Assets as of the
Effective Time and through and including the Closing Date.
c. In furtherance of preceding paragraph (b), as soon as practicable following the Closing
Date, but in no event later than five (5) Business Days from the Closing Date, the parties shall
mutually calculate all cash inflows and outflows on a cash book basis (including, but not limited
to, all payments, receipts, accrued liabilities and benefits accrued on direct payroll incurred in
the Ordinary Course of Business) of the Business between the Effective Time and the Closing Date.
To the extent the cash inflows of the Business exceeded the cash outflows of the Business, Seller
shall pay such excess to Buyer. To the extent the cash outflows of the Business exceeded the cash
inflows of the Business, Buyer shall pay such excess to Seller. All payments due pursuant to this
Section 17(c) shall be paid within 2 days following the requisite determination. For the avoidance
of doubt, Buyer and Seller mutually acknowledge and agree that all obligations under this Section
17(c) have been fully satisfied in accordance with the terms hereof.
18. [Intentionally omitted].
a. [Intentionally omitted].
b. Indemnification by Buyer. Buyer shall indemnify Seller and each of its officers,
directors, employees, Affiliates, successors and assigns (collectively, the “Seller Parties”)
against and hold them harmless from any Losses suffered or incurred by any such Indemnified Party
to the extent arising from
i) any breach of any representation or warranty of Buyer contained in this Agreement;
ii) any breach of any covenant or agreement of Buyer contained in this Agreement;
iii) any Assumed Liabilities;
23
iv) any Contracts retained by Seller but performed by Buyer pursuant to Section 3(r);
v) all termination and severance benefits, costs, charges and liabilities of any nature
incurred with respect to the termination of any Transferred Employee on or after the Closing Date,
including any claims arising out of WARN or otherwise relating to any plant closing, mass layoff or
similar event under any Applicable Law or contract occurring on or after the Closing Date; or
vi) any other liabilities of the Business arising out of or relating to the ownership or
operation of the Business after the Closing Date.
i) For all purposes of this Agreement, “Losses” shall be net of (x) any insurance
payable to the Indemnified Party from its own insurance policies (including title insurance
policies) in connection with the facts giving rise to the right of indemnification, or any
insurance that would have been payable to the Indemnified Party if the policies of insurance
effected by or for the benefit of the Seller or the Business had been maintained after Closing on
no less favorable terms than those existing at the date of this Agreement, and (y) the estimated
present value of any tax benefits received by or accruing to the Indemnified Party, using a
discount rate equal to the midterm applicable federal rate in effect on the date of the claim for
indemnity and assuming a Tax rate equal to the maximum applicable combined statutory federal and
applicable state and local income or corporation tax rate applicable to the Seller for the year in
which the claim is made.
ii) No Person shall be entitled to recover under this Section 19 with respect to, and the term
“Losses” shall not include, consequential damages of any kind, damages consisting of
business interruption or lost profits (regardless of the characterization thereof), damages for
diminution in value of the Business, damages computed on a multiple of earnings or similar basis,
and indirect, special, exemplary and punitive damages.
iii) [Intentionally omitted]
iv) [Intentionally omitted]
v) [Intentionally omitted]
vi) [Intentionally omitted]
24
vii) [Intentionally omitted]
viii) [Intentionally omitted]
ix) [Intentionally omitted]
x) [Intentionally omitted]
xi) Notwithstanding anything to the contrary set forth herein, no party shall be entitled to
indemnification or reimbursement under any provision of this Agreement for any amount to the extent
that such party has been indemnified or reimbursed for such amount pursuant to this Section 19.
d. Termination of Indemnification. The obligations to indemnify and hold harmless a party
hereto pursuant to this Section 19, shall terminate at the time the applicable
representation, warranty, covenant or agreement terminates pursuant to Section 10.
e. Procedures.
i) If the Seller Parties shall seek indemnification pursuant to Section 19(b), the
Indemnified Party shall give written notice to the Indemnifying Party promptly (and in any event
within thirty (30) days) after the Indemnified Party (or, if the Indemnified Party is a
corporation, any officer or employee of the Indemnified Party) becomes aware of the facts giving
rise to such claim for indemnification (an “Indemnified Claim”) specifying in reasonable
detail the factual basis of the Indemnified Claim, stating the amount of the Losses, if known, the
method of computation thereof, containing a reference to the provision of the Agreement in respect
of which such Indemnified Claim arises and demanding indemnification therefor. Notwithstanding any
other provision to the contrary, the Indemnifying Party shall not be required to indemnify, defend
or hold harmless any Indemnified Party against or reimburse any Indemnified Party for any Losses
unless the Indemnified Party has notified the Indemnifying Party in writing in accordance with this
Section 19(e) of a pending or threatened claim with respect to such matters within thirty
(30) days of the Indemnifying Party becoming aware of such pending or threatened claim and within
the applicable survival period set forth in Section 10. If the Indemnified Claim arises
from the assertion of any claim, or the commencement of any suit, action, proceeding or Remedial
Action brought by a Person that is not a party hereto (a “Third Party Claim”), any such
notice to the Indemnifying Party shall be accompanied by a copy of any papers theretofore served on
or delivered to the Indemnified Parry in connection with such Third Party Claim. With respect to
any Third Party Claim asserted or brought prior to the Closing Date, notice of such Third Party
Claim shall be deemed to have been delivered on the Closing Date.
25
ii) Upon receipt of notice of a Third Party Claim from an Indemnified Party pursuant to this
Section 19(e) the Indemnifying Party will be entitled to assume the defense and control of such
Third Party Claim subject to the provisions of this Section 19(e). After written notice by
the Indemnifying Party to the Indemnified Party of its election to assume the defense and control
of a Third Party Claim, the Indemnifying Party shall not be liable to such Indemnified Party for
any legal fees or expenses subsequently incurred by such Indemnified Party in connection therewith.
Notwithstanding anything in this Section 19(e) to the contrary, if the Indemnifying Party
does not assume defense and control of a Third Party Claim as provided in this Section
19(e), the Indemnified Party shall have the right to defend such Third Party Claim, subject to
the limitations set forth in this Section 19(e), in such manner as it may deem appropriate.
Whether the Indemnifying Parry or the Indemnified Party is defending and controlling any such
Third Party Claim, it shall select counsel, contractors, experts and consultants of reasonable
recognized standing and competence, shall take all steps necessary in the investigation, defense or
settlement thereof, and shall at all times diligently and promptly pursue the resolution thereof.
The party conducting the defense thereof shall at all times act as if all Losses relating to the
Third Party Claim were for its own account and shall act in good faith and with reasonable prudence
to minimize Losses therefrom. The Indemnified Party shall, and shall cause each of its Affiliates,
directors, officers, employees, and agents to, cooperate fully with the Indemnifying Party in
connection with any Third Party Claim.
iii) Subject to the provisions of Sections 19(e)(ii) and 19(e)(iv) the
Indemnifying Party shall be authorized to consent to a settlement of, or the entry of any judgment
arising from, any Third Party Claims, and the Indemnified Party shall consent to a settlement of,
or the entry of any judgment arising from, such Third Party Claims; provided, that the Indemnifying
Party shall (a) pay or cause to be paid all amounts arising out of such settlement judgment
concurrently with the effectiveness thereof; (b) shall not encumber any of the assets of any
Indemnified Party or agree to any restriction or condition that would apply to such Indemnified
Party or to the conduct of that party’s business; and (c) shall obtain, as a condition of any
settlement or other resolution, a complete release of each Indemnified Party against any and all
damages resulting from, arising out of or incurred with respect to such settlement or other
resolution. Except for the foregoing, no settlement or entry of judgment in respect of any Third
Party Claim shall be consented to by any Indemnifying Party or Indemnified Party without the
express written consent of the other party.
iv) In the case of the indemnification contemplated by Section 19(e)(ii), in the event
that the Indemnifying Party desires to settle the matters referenced therein or consent to the
entry of any judgment arising thereunder and the Indemnified Party does not wish to consent to such
settlement or entry of judgment, the Indemnified Party shall have no obligation to consent to the
settlement or entry of judgment provided that it agrees in writing to pay and be responsible for
100% of any Losses; provided that the Indemnified Party shall not be required to consent to any
settlement or agree to be responsible for the payment of Losses thereafter incurred with respect to
any matter the settlement or entry of judgment of which would require the consent of such
Indemnified Party pursuant to Section 19(e)(iii). Notwithstanding the foregoing, an
Indemnifying Party may, at its option and expense, participate in the defense of any Indemnified
Claim.
26
v) If the Indemnifying Party and the Indemnified Party are unable to agree with respect to a
procedural matter arising under this Section 19(e) the Indemnifying Party and the
Indemnified Party shall, within ten (10) days after notice of disagreement given by either party,
agree upon a third-party referee (“Referee”), who shall be an attorney and who shall have
the authority to review and resolve the disputed matter. The parties shall present their
differences in writing (each party simultaneously providing to the other a copy of all documents
submitted) to the Referee and shall cause the Referee promptly to review any facts, law or
arguments either the Indemnifying Party or the Indemnified Party may present. The Referee shall be
retained to resolve specific differences between the parties within the range of such differences.
Either party may request that all discussions with the Referee by either party be in each other’s
presence. The decision of the Referee shall be final and binding unless both the Indemnifying
Party and the Indemnified Party agree. The parties shall share equally all costs and fees of the
Referee.
vi) If an Indemnifying Party makes any payment on an Indemnified Claim, the Indemnifying Party
shall be subrogated, to the extent of such payment, to all rights and remedies of the Indemnified
Party to any insurance benefits or other claims of the Indemnified Party with respect to such
claim.
i) As a material inducement for Seller to enter into this Agreement, and not in any way
limiting Buyer’s obligations to indemnify Seller for a breach of any covenant contained herein, at
the Closing Buyer is executing and delivering to Seller, the General Agreement of Indemnity in the
form agreed upon between Buyer and Seller (the “General Agreement of Indemnity”), pursuant
to which Buyer will indemnify Seller and its Affiliates with respect to the performance and
completion of the bonded obligations as set forth therein (the “Bonded Obligations”).
ii) Following the Closing Date, Buyer and Seller shall communicate with respect to the
performance and completion of the Bonded Obligations and Buyer shall afford Seller the opportunity
to remedy any actual or reasonably anticipated non-performance or non-completion of any Bonded
Obligation. In connection with the Bonded Obligations, Buyer shall promptly provide Seller with
any information relating thereto as Seller may reasonably request including without limitation
status reports pertaining to Buyer’s performance and completion thereof. For purposes of clarity,
under no circumstances shall Seller have any obligation to complete any Bonded Obligation.
iii) Until such time as all Bonded Obligations are fully completed in accordance with Section
12(g) hereof, Buyer shall provide Seller with a Chief Financial Officer’s certificate on a monthly
basis, certifying that to such officer’s best knowledge after reasonable inquiry (A) Buyer’s
management-prepared monthly cash flow statements, including cash
27
reconciliations, which shall be attached as an exhibit to such certificate, are true and
correct in all material respects subject to year-end adjustments in accordance with US GAAP, and
(B) Buyer has fully complied with all provisions of Sections 6(b)(vi)(3) and 12(i) hereof.
a. Notices. All notices, requests, demands and other communications required or
permitted under this Agreement shall be in writing and shall be deemed to have been duly given,
made and received when delivered against receipt or upon actual receipt of registered or certified
mail, postage prepaid, return receipt requested, addressed as set forth below:
If to Buyer:
LEÓN, MAYER & Co.
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx / Xxxxx Xxxxxxx-Xxxx
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx / Xxxxx Xxxxxxx-Xxxx
with a copy, given in the manner
prescribed above to:
prescribed above to:
XxXxxxxx & English, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
If to Seller:
MasTec North America, Inc.
000 X. Xxxxxxx Xx.
00xx Xxxxx
Xxxxx Xxxxxx, XX 00000
Attention: C. Xxxxxx Xxxxxxxx
000 X. Xxxxxxx Xx.
00xx Xxxxx
Xxxxx Xxxxxx, XX 00000
Attention: C. Xxxxxx Xxxxxxxx
28
with a copy, given in the manner
prescribed above to:
prescribed above to:
MasTec North America, Inc.
000 X. Xxxxxxx Xx.
00xx Xxxxx
Xxxxx Xxxxxx, XX 00000
Attention: Xxxxxxx xx Xxxxxxxx, Esq.
000 X. Xxxxxxx Xx.
00xx Xxxxx
Xxxxx Xxxxxx, XX 00000
Attention: Xxxxxxx xx Xxxxxxxx, Esq.
Any party may alter the address or addresses to which communications or copies are to be sent
by giving notice of such change of address in conformity with the provisions of this paragraph for
the giving of notice.
b. Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of Florida without regard to the conflicts-of-laws rules thereof.
c. Binding Nature of Agreement; Assignment. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, personal representatives, successors,
and assigns, except that no party may assign or transfer its rights or obligations under this
Agreement without the prior written consent of the other parties hereto.
d. Entire Agreement. This Agreement, the Settlement Agreement, the Preserved Agreements, the
NDA and the schedules, exhibits, certificates and other agreements to be delivered pursuant hereto
constitute the entire agreement and understanding among the parties hereto with respect to the
subject matter hereof and supersede all prior and contemporaneous agreements, understandings,
inducements, and conditions, express or implied, oral or written, of any nature whatsoever with
respect to the subject matter hereof. This Agreement may not be modified or amended other than by
an agreement in writing executed by the parties. Should there be any conflict between the terms of
this Agreement and the terms of the Settlement Agreement, the terms of the Settlement Agreement
shall prevail.
e. Dispute Resolution. This Agreement shall be governed by and construed in accordance with
the Laws of the State of Florida applicable to contracts made and to be performed therein. Any
controversy or claim arising out of or relating to this Agreement or any related agreement or any
of the contemplated transactions will be settled in the following manner: (i) senior executives
representing each of Seller and Buyer will meet to discuss and attempt to resolve the controversy
or claim, (ii) if the controversy or claim is not resolved as contemplated by clause (i), Seller
and Buyer will, by mutual consent, select an independent third party to mediate such controversy or
claim, provided that such mediation will not be binding upon the parties; and (iii) if such
controversy or claim is not resolved as contemplated by clauses (i) and (ii), the parties will
refer any dispute hereunder (to the exclusion of a court of law) to final and binding arbitration
in Miami, Florida in accordance with the then existing rules for
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expedited arbitration (the “Rules”) of the American Arbitration Association (“AAA”),
and judgment upon the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof. The law applicable to any controversy shall be the law of the State of
Florida, regardless of principles of conflicts of laws. In any arbitration pursuant to this
Agreement involving a dispute in excess of $500,000, the award or decision shall be rendered by a
majority of the members of a Board of Arbitration consisting of three members, one of whom shall be
appointed by each of the respective parties and the third of whom shall be the chairman of the
panel and be appointed by mutual agreement of said two party-appointed arbitrators. In the event
of failure of said two arbitrators to agree within twenty (20) days after the commencement of the
arbitration proceeding upon the appointment of the third arbitrator, the third arbitrator shall be
appointed by the AAA in accordance with the Rules. In the event of a dispute involving a sum equal
to or less than $500,000, a single arbitrator shall be appointed by the AAA in accordance with the
Rules. In the event that either party shall fail to appoint an arbitrator within ten (10) days
after the commencement of the arbitration proceedings, such arbitrator and the third arbitrator
shall be appointed by the AAA in accordance with the Rules. Nothing set forth above shall be
interpreted to prevent the parties from agreeing in writing to submit any dispute to a single
arbitrator in lieu of a three member Board of Arbitration. Upon the completion of the selection of
the Board of Arbitration (or if the parties agree otherwise in writing, a single arbitrator), an
award or decision shall be rendered in writing within no more than thirty (30) days. The award
rendered by arbitration shall be final and binding upon the parties, and judgment upon the award
may be entered in any court of competent jurisdiction in the United States. Notwithstanding the
foregoing, the request by either party for preliminary or permanent injunctive relief, whether
prohibitive or mandatory, shall not be subject to arbitration and shall be adjudicated only by the
courts of the State of Florida located in Miami-Dade County or the U.S. District Court for the
Southern District of Florida. Each of the parties to this Agreement irrevocably consents to the
service of process in any action or proceeding hereunder by the mailing of copies of the notice,
summons and/or complaint by registered or certified airmail, postage prepaid, to the address
specified in Section 21(a). The foregoing shall not limit the rights of any party to this
Agreement to serve process in any other manner permitted by Applicable Law or to obtain execution
of judgment in any other jurisdiction. An arbitrator(s) or court reviewing any dispute related to
this Agreement pursuant to this Section 21(e) may award reasonable costs for legal
representation to a successful party and may apportion the costs of the arbitration or court costs
between the parties if the arbitrator or court determines that such apportionment is reasonable,
taking into account the circumstances of the case.
f. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
g. Enforcement of Agreement. The parties acknowledge and agree that in the event of a breach
of this Agreement, the non-breaching party would be irreparably damaged and could not be adequately
compensated in all cases by monetary damages alone. Accordingly,
30
in addition to any other right or remedy to which the non-breaching party may be entitled, at
law or in equity, it shall be entitled to enforce any provision of this Agreement by a decree of
specific performance and to temporary, preliminary and permanent injunctive relief to prevent
breaches or threatened breaches of any of the provisions of this Agreement, without posting any
bond or other undertaking.
h. Provisions Separable. The provisions of this Agreement are independent of and separable
from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue
of the fact that for any reason any other or others of them may be invalid or unenforceable in
whole or in part.
i. Indulgences Not Waivers. Neither the failure nor any delay on the part of either party to
exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power, or privilege
preclude any other or further exercise of the same or of any other right, remedy, power, or
privilege, nor shall any waiver of any right, remedy, power, or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power, or privilege with respect to any
other occurrence. No waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted such waiver.
j. Costs and Expenses. Each party hereto shall bear its own costs, including counsel fees and
accounting fees, incurred in connection with the negotiation, preparation of and the Closing under
this Agreement, and all matters incident thereto.
k. Titles Not to Affect Interpretation. The titles of paragraphs and subparagraphs contained
in this Agreement are for convenience of reference only, and they neither form a part of this
Agreement nor are they to be used in the construction or interpretation hereof.
l. Execution in Counterparts; Facsimile Signatures. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original as against any party whose
signature appears thereon, and all of which shall together constitute one and the same instrument.
This Agreement shall become effective when one or more such counterparts have been signed by each
of the parties and delivered to the other party. A facsimile signature will have the same force
and effect as an original signature.
m. Gender. Words used herein, regardless of the gender specifically used, shall be deemed and
construed to include any other gender, masculine, feminine, or neuter, as the context requires.
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n. Number of Days. In computing the number of days for purposes of this Agreement, all days
shall be counted, including Saturdays, Sundays, and holidays celebrated in the United States;
provided, however, that if the final day of any period falls on a Saturday, Sunday, or holiday
celebrated in the United States, then the final day shall be deemed to be the next day which is not
a Saturday, Sunday, or holiday celebrated in the United States.
o. Transfer Taxes. Any sales, use or other transfer taxes arising out of or incurred in
connection with the transactions contemplated by this Agreement shall be paid by Seller; provided
that Buyer shall deliver to Seller any resale certificate for inventory or clearance certificate,
receipts or similar documents that may be required.
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| MASTEC NORTH AMERICA, INC. | ||||
By:
|
/s/ C. Xxxxxx Xxxxxxxx | |||
| Chief Financial Officer & | ||||
| Executive Vice President | ||||
| ATLAS TRAFFIC MANAGEMENT SYSTEMS LLC | ||||
By:
|
/s/ Xxxxx Xxxxxxx-Xxxx | |||
| Founding Director | ||||
By:
|
/s/ Xxxxxxxx X. Xxxxx | |||
| Founding Director | ||||
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Exhibit A
Definitions
“Affiliate” means, with respect to any Person, any Person directly or indirectly
controlling, controlled by, or under common control with such other Person. For purposes of
determining whether a Person is an Affiliate, the term “control” shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through ownership of securities, contract or otherwise.
“Applicable Law” means, with respect to any Person, any domestic or foreign, federal,
state or local statute, law, ordinance, rule, administrative interpretation, regulation, Order,
writ, injunction, decree or other requirement of any Governmental Authority (including any
Environmental Law) applicable to such Person or any of their respective properties, assets,
officers, directors, employees, consultants or agents (in connection with such officer’s,
director’s, employee’s, consultant’s or agent’s activities on behalf of such Person).
“Benefit Arrangement(s)” means all life and health insurance, hospitalization,
retirement, bonus, deferred compensation, incentive compensation, severance pay, disability and
fringe benefit plans, holiday or vacation pay, profit sharing, seniority, and other policies,
practices, agreements or statements of terms and conditions providing employee or executive
compensation or benefits to Transferred Employees or any of their dependents, maintained by Seller,
other than an Employee Plan.
“Business Day” means any day that is not a Saturday, Sunday, or other day on which
banks are required or authorized by Applicable Law to be closed in New York, New York.
“Competing Business” means any business operating within the United States or its
territories which provides directly, or indirectly through other contractors, the highway and
roadway services currently provided by the Business, including structures, signals, electronics and
toll booths.
“Contract” means all contracts, agreements, leases (including leases of real
property), licenses, commitments, sales and purchase orders and other undertakings of any kind,
whether written or oral, relating exclusively to the Business.
“Current Projects” shall have the meaning set forth in Section 2(f) of this
Agreement.
“Data Room” means the electronic data room hosted on Xxxxx Deal Room Express relating
to the Business comprising the correspondence, Contracts, agreements, licenses, documents and other
information made available to the Buyer and its advisors.
“Defective Installation Losses” means Losses incurred by Buyer as a result of
defective installation of products or the purchase or use of non-conforming goods or materials by
the Business prior to the Closing Date, including but not limited to liabilities for latent defects
and other obligations to third parties.
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“Disclosure Schedules” means the Disclosure Schedules dated the date of this Agreement
relating to this Agreement.
“Employee Plans” means each “employee benefit plan” as defined in Section 3(3) of
ERISA, maintained or contributed to by Seller which provides benefits to employees of the Business
or their dependents.
“Encumbrances” means any mortgage, lien (except for any lien for taxes not yet due and
payable), charge, restriction, pledge, security interest, option, lease or sublease, claim, right
of any third party, easement, encroachment or encumbrance.
“Environmental Conditions” shall mean any environmental contamination or pollution of,
or the Release or Threat of Release of Hazardous Materials into, the surface water, groundwater,
surface or subsurface strata, other geologic media, air and land.
“Environmental Laws” shall mean all federal, regional, state, county or local laws,
statutes, ordinances, decisional law (including common law), rules, regulations, codes, Orders,
decrees, directives and judgments relating to health or safety, pollution, damage to or protection
of the environment, Environmental Permits, Environmental Conditions, Releases or Threatened
Releases of Hazardous Materials into the environment or the use, manufacture, processing,
distribution, treatment, storage, generation, disposal, transport or handling of Hazardous
Materials, whether existing in the past or present or hereafter enacted, rendered, adopted or
promulgated. Environmental Laws shall include, but are not limited to, the following laws, and the
regulations promulgated thereunder, as the same may be amended from time to time: the Comprehensive
Environmental Response Compensation and Liability Act (42 U.S.C. 9601 et seq.) (“CERCLA”);
the Resource Conservation and Recovery Act (42 U.S.C. 6901 et seq.) (“RCRA”); the Clean Air
Act (42 U.S.C. 9401 et seq.); and the Clean Water Act (33 U.S.C. 1251 et seq.); and the comparable
laws and regulations of the State of Florida.
“Environmental Liabilities” means all liabilities to the extent arising in connection
with or in any way relating to the Business or Seller’s use or ownership thereof, whether vested or
unvested, contingent or fixed, actual or potential, which arise under or relate to Environmental
Laws including, without limitation, (i) Remedial Actions, (ii) personal injury, wrongful death,
economic loss or property damage claims, (iii) claims for natural resource damages, (iv) violations
of Applicable Law or (v) any Losses with respect thereto.
“Environmental Permits” shall mean all permits, authorizations, registrations,
certificates, licenses, approvals or consents required under or issued pursuant to Environmental
Laws.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“Governmental Authority” means any federal, state, local, foreign, international, or
multinational entity or authority exercising executive, legislative, judicial, regulatory,
administrative or taxing functions of or pertaining to government.
“Hazardous Materials” shall mean any toxic or hazardous substance, material or waste
and any pollutant or contaminant, or infectious or radioactive substance or material, or any
35
substances, materials and wastes defined or deemed to be hazardous or regulated under any
Environmental Laws, including without limitation, organic compounds, petroleum (and derivatives
thereof), polychlorinated byphenyls, asbestos and urea formaldehyde.
“Indemnified Party” means a Person that may be entitled to be indemnified pursuant to
Section 19.
“Indemnifying Party” means a Person that may be entitled to be indemnified pursuant to
Section 19.
“Intellectual Property” means (i) patents, patent applications and patent disclosures,
together with all reissuances, continuations, continuations-in-part, revisions, extensions and
reexaminations thereof; (ii) trademarks, service marks, trade dress, logos, slogans and trade
names, together with all goodwill associated therewith, and applications, registrations and
renewals in connection therewith; (iii) copyrights, mask works and copyrightable works, and
applications, registrations and renewals in connection therewith; and (iv) trade secrets and
confidential business information (including ideas, research and development, know-how, inventions,
formulas, compositions, manufacturing and production processes and techniques, designs, drawings
and specifications).
“ITS Leases” means the real property leases listed on Schedule 2(d) relating to the
facilities used exclusively for the Business, and any other real property leases entered into after
the date of this Agreement and on or prior to the Closing Date with the consent of Buyer,
exclusively for the benefit of the Business, as the same may be amended and supplemented from time
to time, including the interests of Seller in any related fixtures, improvement and personal
property located therein.
“Inventory” means all inventories of finished goods, stores, replacement and spare
parts, packaging, labeling and other operating supplies ordered, purchased and/or on hand that are
solely used or held for use solely in connection with the Business.
“Leases” means all leases, subleases, licenses, concessions and other agreements
(written or oral), including all amendments, extensions, renewals, guaranties and other agreements
with respect thereto, pursuant to which Seller holds any Leased Real Property for use solely by or
in connection with the Business.
“Leased Real Property” means all leasehold or subleasehold estates and other rights to
use or occupy any land, buildings, structures, improvements, fixtures or other interest in real
property which is used by Seller solely in connection with the Business.
“Liabilities” means all liabilities and obligations of any kind, character or
description, whether liquidated or unliquidated, known or unknown, fixed or contingent, xxxxxx or
inchoate, accrued or unaccrued, absolute, determined, determinable or indeterminable or otherwise,
whether presently in existence or arising hereafter.
“Losses” means any losses, damages, costs, expenses, liabilities, obligations and
claims of any kind.
36
“XxxXxx Xxxxx” means the name “MasTec” and all related and associated logos, design
elements, variations, trade names, trademarks, service marks and all other marks, domain names, and
rights of every kind pertaining thereto, together with the goodwill associated therewith, and shall
include all confusingly similar names, marks and logos and derivations thereof, to the maximum
extent permitted by law.
“NDA” shall have the meaning set forth in Section 12(a) of this Agreement.
“Order” means any order, injunction, judgment, decree, ruling, assessment or
arbitration award of any Governmental Authority or arbitrator.
“Ordinary Course of Business” means the ordinary course of business consistent with
past custom and practices (including with respect to quantity and frequency).
“Permit” means any authorization, license, consent, Order, certificate, variance,
permit, certification, approval or other action of, or any filing, registration or qualification
with, any Governmental Authority (or any department, agency or political subdivision thereof) or
any other regional or local public authority (or any department, agency or political subdivision
thereof), and any applications for the foregoing.
“Permitted Encumbrances” means (i) any Encumbrances on the Assets arising from the
lease of any personal property pursuant to Contracts included in the Assets, (ii) any Encumbrance
which will be released at Closing, (iii) any Encumbrance that does not adversely affect the full
use and enjoyment of the Asset for the purpose for which it is currently used, (iv) statutory liens
for current taxes, special assessments or other governmental charges not yet due and payable or the
amount or validity of which is being contested in good faith by appropriate proceedings, (v)
mechanics’, materialmen’s, carriers’, workers’, repairers’ and similar statutory liens arising or
incurred in the Ordinary Course of Business, (vi) zoning, entitlement, building and other land use
regulations imposed by governmental agencies having jurisdiction over any real property, (vii)
deposits or pledges made in connection with, or to secure payment of, worker’s compensation,
unemployment insurance, old age pension programs mandated under applicable legal requirements or
other social security, and (viii) covenants, conditions, restrictions, easements, encumbrances and
other similar matters of record affecting title to but not adversely affecting current occupancy or
use of the real property in any material respect.
“Person(s)” means an individual, a corporation, a general partnership, a limited
partnership, a limited liability company, limited liability partnership, an association, a trust or
any other entity or organization, including a government or political subdivision or agency of
instrumentality thereof.
“Preserved Agreements” shall have the meaning set forth in Section 7(a) of the
Settlement Agreement.
“Proceeding” means any action, arbitration, audit, hearing, investigation, litigation
or suit (whether civil, criminal, administrative, judicial or investigative, whether formal or
informal, whether public or private) commenced, brought, conducted or heard by or before, or
otherwise involving, any Governmental Authority or arbitrator, whether arising before or after the
Closing.
37
“Release” means any intentional or unintentional release, discharge, spill, leaking,
pumping, pouring, emitting, emptying, injection, deposit, disposal, dispersal, dumping, leaching or
migration on or into the environment or into or out of any property.
“Remedial Action(s)” means the investigation, clean-up or remediation of environmental
contamination or damage caused by, related to or arising from the generation, use, handling,
treatment, storage, transportation, disposal, discharge, release, or emission of hazardous
substances, including, without limitation, investigations, response, removal and remedial actions
under The Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended,
corrective action under The Resource Conservation and Recovery Act of 1976, as amended, and
clean-up requirements under similar state Environmental Laws.
“Settlement Agreement” shall have the meaning set forth in Section 6(b)(ii) of
this Agreement.
“Tax” or Taxes” means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation, premium,
unemployment, real property, personal property, sale, use, transfer, value added, alternative,
estimated, or other tax of any kind whatsoever, whether computed on a separate or consolidated,
unitary or combined basis or in any other manner, including any interest, penalty, or addition
thereto, whether disputed or not and including any obligation to indemnify or otherwise assume or
succeed to the Tax liability of any person.
“Tax Return” means any return, declaration, report, claim for refund, or information
return or statement relating to Taxes, including any schedule or attachment thereto, and including
any amendment thereof.
“Threat of Release” shall mean a reasonable likelihood of a Release that may require
action in order to prevent or mitigate damage to the environment that may result from such Release.
“US GAAP” means generally accepted accounting principles and practices, as in effect
from time to time in the United States of America, consistently applied.
“WARN” means the Worker Adjustment Retraining and Notification Act of 1988, as
amended.
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