EXHIBIT 10.2
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "AGREEMENT") is made and entered into
as of December 9, 2004 by and among INTEGRATED ELECTRICAL SERVICES, INC., a
Delaware corporation (the "PARENT"), X. XXXX ELECTRIC LP, and XXXXXXX SYSTEMS
LP, both Texas limited partnerships (together, the "COMPANY"), XXXXX XXXX
CONSTRUCTION COMPANY, LP, a Texas limited partnership (the "BUYER") and XXXXX X.
XXXX, an individual and resident of the State of Texas ( "GUARANTOR").
WITNESSETH:
WHEREAS, the Parent owns, either directly or indirectly, all of the issued
and outstanding partnership interest of the Company, which is engaged in the
electrical construction and services business (the "BUSINESS");
WHEREAS, the Parent and the Company desire to sell to the Buyer
substantially all of the Company's assets, which are more fully described in
Section 1.1 hereof, and the Buyer desires to acquire such assets in
consideration of the payment by the Buyer of the purchase price and the
assumption by the Buyer of the liabilities provided for herein, all upon the
terms and subject to the conditions hereinafter set forth;
NOW, THEREFORE, for and in consideration of the premises and of the
respective representations, warranties, covenants, agreements and conditions of
the parties contained herein, it is hereby agreed as follows:
1. PURCHASE AND SALE OF ASSETS.
1.1 Transfer of Assets. On the terms and subject to the conditions set
forth in this Agreement, on the Closing Date (as defined in Section 2.1 hereof),
the Company shall sell, convey, assign, transfer and deliver to the Buyer, and
the Buyer shall purchase and acquire from the Company (except as provided in
Section 1.2 hereof) all of the assets, rights and properties of the Parent or
the Company set forth on Schedule 1.1. The assets described in this Section 1.1
as being sold, conveyed, assigned, transferred and delivered to the Buyer
hereunder are sometimes hereinafter referred to collectively as the "ASSETS".
1.2 Excluded Assets. It is expressly understood and agreed that the Assets
shall not include the following (such assets are hereinafter referred to
collectively as the "EXCLUDED ASSETS"):
(a) Cash and cash equivalents or similar type investments, such as
certificates of deposit, Treasury bills and other marketable securities;
(b) Claims for refunds of taxes and other governmental charges to
the extent such refunds relate to periods ending on or prior to the
Closing Date;
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(c) Any asset, tangible or intangible, which is not freely
transferable without the consent of a third party, upon the failure to
obtain such consent;
(d) The original corporate minute books, stock books, financial
records, tax returns, personnel and payroll records and corporate policies
and procedures manuals of the Company and other records required by
applicable laws to be retained; provided, however, that the Buyer shall
retain in its possession the documents and files set forth on Schedule 1.2
(which shall continue to be owned by the Company), and make them
immediately available to Parent and/or the Company on request, and further
provided that Buyer shall not destroy any such records without the prior
written consent of the Parent.
(e) Any contract or agreement, whether written or oral, between the
Company and IES Contractors, Inc.; and
(f) Any asset not set forth on Schedule 1.1.
1.3 Instruments of Conveyance and Transfer.
(a) At the Closing, the Buyer, the Company and the Parent shall
enter into a Xxxx of Sale, Assignment and Assumption Agreement in the form
attached hereto as Exhibit A, transferring to the Buyer good and
indefeasible title to all of the tangible personal property included in
the Assets, subject only to Permitted Encumbrances.
(b) At the Closing, the Buyer and the Parent shall deliver such
other instruments of transfer and assignment in respect of the Assets as
the Buyer shall reasonably require and as shall be consistent with the
terms and provisions of this Agreement.
(c) At the Closing, the Buyer shall, and shall cause the Transferred
Employees (as hereinafter defined) to, resign as officers and directors of
the Company and any other affiliates of the Parent.
1.4 Further Assurances. From time to time after the Closing, the Parent
and the Company will execute and deliver, or cause to be executed and delivered,
without further consideration, such other instruments of conveyance, assignment,
transfer and delivery and will take such other actions as the Buyer may
reasonably request in order to more effectively transfer, convey, assign and
deliver to the Buyer, and to place the Buyer in possession and control of any of
the Assets or to enable the Buyer to exercise and enjoy all rights and benefits
of the Company with respect thereto.
1.5 Liabilities. On the Closing Date, the Buyer will assume and agree to
pay and discharge all liabilities of the Company, known or unknown, absolute or
contingent (the "ASSUMED LIABILITIES") other than the liabilities set forth on
Schedule 1.5 (the "RETAINED LIABILITIES"), which shall be retained by the Parent
or the Company, respectively.
1.6 Expenses: Consents and Taxes. The Buyer shall pay, or cause to be paid
(i) all costs and expenses of obtaining all consents of third parties for the
assignment of any of the Assets,
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and (ii) all transfer, stamp, sales, use or other similar taxes or duties
payable in connection with the sale and transfer of the Assets to the Buyer.
2. CLOSING; PURCHASE PRICE.
2.1 Closing Date. The consummation of the transactions contemplated in
this Agreement (the "CLOSING") shall take place at the offices of Gardere Xxxxx
Xxxxxx LLP, 0000 Xxxxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx at 10:00 a.m., Central
time, December 9, 2004 (the "CLOSING DATE") contemporaneously with the execution
of this Agreement or at such other place and time as the parties hereto may
mutually agree.
2.2 Purchase Price. The aggregate purchase price for the Assets shall be
$6,629,000 (the "PURCHASE PRICE"), subject to adjustment pursuant to Section 2.3
below, plus the Buyer's assumption of the Assumed Liabilities pursuant to
Section 1.5 above. The Purchase Price shall be payable by the Buyer at the
Closing to the Company in immediately available funds by confirmed wire transfer
to a bank account to be designated by the Company.
2.3 Cash Reconciliation. Within 30 days following the Closing Date, the
Company shall prepare and deliver to the Buyer a schedule setting forth, for the
period commencing on October 1, 2004, and ending as of the Closing, (a) the cash
disbursements funded by the Company, the Parent or any of their affiliates for
the benefit of the Company, to include those made in the ordinary course to
trade vendors and those made in the ordinary course for Company employee benefit
plans (the "DISBURSEMENTS"), and (b) the cash deposits made by the Company (the
"DEPOSITS"). Within three business days following the Buyer's receipt of such
schedule, (i) the Buyer shall remit to the Company in immediately available
funds, the amount by which the Disbursements exceed the Deposits, if any; or
(ii) the Company shall remit to the Buyer, in like manner and within such
period, the amount by which Deposits exceed the Disbursements, if any.
Disbursements shall include, but not be limited to, actual cash amounts paid by
the Company or the Parent on behalf of the Company, including (i) amounts paid
after September 30, 2004 for checks issued by the Company or Parent on behalf of
the Company on or before September 30, 2004 that had not cleared the banks on
September 30, 2004, which amounts were reflected on the September 30, 2004
balance sheet as negative cash amounts, (ii) checks issued by the Buyer or
Parent on behalf of the Company subsequent to September 30, 2004, but before the
Closing that have not cleared the banks as of the Closing, and (iii) workers
compensation, general liability, health and similar insurance premiums paid by
the Parent on behalf of the Company with respect to periods prior to the
Closing, whether accrued prior to or after the Closing, and Deposits shall
include, but not be limited to, actual cash amounts received by the Company or
the Parent on behalf of the Company subsequent to September 30, 2004, but before
the Closing that have not been reflected in the Company's accounts as of the
Closing. Disbursements and Deposits will be accounted for in accordance with
Parent's accounting practices consistent with past periods.
2.4 Purchase Price Allocation. As soon as practicable after the Closing
Date, the Company and the Buyer shall jointly attempt to agree to and prepare
IRS Form 8594 to report the allocation of the Purchase Price among the Assets.
Each party hereto agrees not to assert, in connection with any tax return, tax
audit or similar proceeding, any allocation that differs from that set forth in
such Form 8594. If the Company and the Buyer cannot reach agreement as to the
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allocation of the Purchase Price among the Assets, the parties agree to allocate
the Purchase Price among the Assets for all purposes (including financial
accounting and tax purposes) independently.
3. REPRESENTATIONS AND WARRANTIES.
3.1 Representations and Warranties of the Company and the Parent. Each
Company and the Parent represent and warrant to the Buyer as follows:
(a) Organization, Authority and Qualification of the Company. Each
Company is a limited partnership duly organized and validly existing under
the laws of the State of Texas and each Company has full power and
authority to own or lease its properties and to carry on its business in
such state. The Parent is a corporation duly organized and validly
incorporated under the laws of the State of Delaware and Parent has full
power and authority to own or lease its properties and to carry on its
business in such state. Each Company and the Parent have the full power
and authority to execute, deliver and perform this Agreement, and this
Agreement has been duly and validly executed and delivered by each Company
and the Parent and constitutes the valid and legally binding obligation of
each of them, subject to general equity principles, enforceable in
accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting the
rights of creditors generally.
(b) No Violation. Neither Company is in default under nor in
violation of its Partnership Agreement.
(c) Title to Properties; Absence of Liens and Encumbrances. Each
Company owns good and indefeasible title to its Assets, free and clear of
all claims, liens, security interests, charges, leases, encumbrances,
licenses or sublicenses and other restrictions of any kind and nature,
other than the claims, liens, security interests, charges, leases,
encumbrances, licenses or sublicenses either included among the Assumed
Liabilities or specifically set forth on Schedule 3.1(c) hereto
("PERMITTED ENCUMBRANCES").
3.2 Representations and Warranties of the Buyer. The Buyer represents and
warrants to the Parent and the Company as follows:
(a) Residence. The Buyer is a limited partnership that is duly
organized and validly existing under the laws of the State of Texas.
(b) Authorization. The Buyer has the capacity to execute, deliver
and perform this Agreement, and this Agreement has been duly and validly
executed and delivered by the Buyer and constitutes the valid and legally
binding obligation of the Buyer, subject to general equity principles,
enforceable in accordance with its terms, except as the same may be
limited by bankruptcy, insolvency, reorganization or similar laws
affecting the rights of creditors generally.
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(c) Certain Fees. The Buyer has not employed any broker or finder or
incurred any other liability for any brokerage fees, commissions or
finders' fees in connection with the transactions contemplated hereby.
(d) Financial Information. The financial and management reports
(including, without limitation, WIP schedules) heretofore delivered or
made by Guarantor or the Company to the Parent are true and correct in all
material respects and do not omit to state any fact necessary to make any
of them, in light of the circumstances in which made, not misleading. All
executed change orders have been recorded, all agreed change orders have
been executed or are listed on Schedule 3.2(d), and all checks and cash
received by the Company and its affiliates have been deposited.
3.3 No Warranty. The Buyer and Guarantor acknowledge that the Guarantor,
through previous ownership and/or the management of the Company, is familiar
with the Assets and the operations of the Company, and has access to any
information pertaining thereto and has made such information available to the
Buyer. Neither the Company nor the Parent, nor any of their respective
directors, officers, employees, agents or representatives has made, or shall be
deemed to have made, and no such person shall be liable for, or bound in any
manner by, and the Buyer and Guarantor have not relied upon and will not rely
upon, any express or implied representations, warranties, guaranties, promises
or statements pertaining to the Business or Assets except as specifically
provided in this Section 3. The Buyer and Guarantor acknowledge that in making
the decision to enter into this Agreement and to consummate the transactions
contemplated hereby, they have relied solely on the basis of their own
independent investigation of the Business and the Assets and upon the express
written representations, warranties and covenants in this Agreement. Without
diminishing the scope of the express written representations, warranties and
covenants of the Company and the Parent in this Agreement and without affecting
or impairing the Buyer's right to rely thereon, the Buyer and Guarantor
acknowledge that (a) they have not relied, in whole or in part, on any
information contained in documents, materials or other information provided to
them by, or on behalf of, Company or the Parent, and (b) neither Company nor the
Parent is making any representations or warranties with respect to (i) any such
documents, materials or other information, other than, in each case, as set
forth in this Agreement or (ii) the value, condition, merchantability,
marketability, profitability, suitability or fitness for a particular use or
purpose of the Assets. ACCORDINGLY, THE ASSETS ARE BEING TRANSFERRED "AS IS,
WHERE IS." EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION
3.1 OF THIS AGREEMENT, THE COMPANY AND PARENT MAKE ABSOLUTELY NO REPRESENTATIONS
OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, REGARDING THE ASSETS, INCLUDING
WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, OR THE ABILITY OF THE COMPANY TO ASSIGN (WHERE ASSIGNABILITY
HAS BEEN RESTRICTED BY THIRD PARTIES) THE ASSETS, OR OBTAIN CONSENTS TO ANY
ASSIGNMENT.
4. COVENANTS; ACTION SUBSEQUENT TO CLOSING.
4.1 Access to Books and Records. Until the third anniversary of the
Closing Date, the Parent and the Company shall afford, and will cause its
affiliates to afford, to the Buyer, its counsel,
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accountants and other authorized representatives, during normal business hours,
reasonable access to the books, records and other data of the Company and the
Business with respect to periods ending on or prior to the Closing Date to the
extent that such access may be reasonably required by the Buyer to facilitate
(i) the investigation, litigation and final disposition of any claims which may
have been or may be made against the Buyer in connection with the Business or
(ii) for any other reasonable business purpose. Following the Closing, the Buyer
shall prepare, on behalf of the Company, all regularly prepared Company
financial reports and statements for periods up to and including the Closing
Date, and shall cooperate with and provide assistance to the Parent and the
Company in their financial and tax reporting obligations for the periods up to
and including the Closing Date.
4.2 Mail. The Parent and the Company authorize and empower the Buyer on
and after the Closing Date to receive and open all mail received by the Buyer
relating to the Business or the Assets and to deal with the contents of such
communications in any proper manner. The Parent and the Company shall promptly
deliver to the Buyer any mail or other communication received by them after the
Closing Date pertaining to the Business or the Assets. The Buyer shall promptly
deliver to the Parent any mail or other communication received by it after the
Closing Date pertaining to the Excluded Assets or Retained Liabilities, and any
cash, checks or other instruments of payment in respect of the Excluded Assets.
4.3 No Consent Contracts. To the extent that any contract of the Company
included in the Assets may not be assigned without the consent of any third
party, and such consent is not obtained prior to Closing (such contracts
referred to as "NO CONSENT CONTRACTS"), this Agreement and any assignment
executed at Closing pursuant hereto shall not constitute an assignment thereof,
but to the extent permitted by law shall constitute an equitable assignment by
the Company and assumption by the Buyer of the Company's rights and obligations
under the applicable No Consent Contract, with the Company making available to
the Buyer the benefits thereof and the Buyer performing the obligations
thereunder on the Company's behalf.
4.4 Preparation and Filing of Certain Tax Forms. The Buyer shall prepare
and timely file all Forms W-2, 940, 941 and 1099 with all appropriate
Governmental Entities, including without limitation any summary schedules and
transmittal forms, as well as any similar filings required by any state or local
Governmental Entity, with respect to all wages and other reportable payments for
the calendar year 2004. As used herein, "GOVERNMENTAL ENTITY" means any court or
tribunal in any jurisdiction (domestic or foreign) or any public, governmental
or regulatory body, agency, department, commission, board, bureau or other
authority or instrumentality, domestic or foreign. The Buyer shall pay all
administrative amounts owed as a result of or otherwise related to such filings
with the exception of any tax, interest, or penalties associated with periods
prior to the Closing. The Company will pay, on or before they become due, any
employment taxes withheld by it which have not been previously paid. The Buyer,
Parent and the Company shall cooperate in making all such filings and shall make
available to the others such information as any of them requires to assure such
filings are made on a timely and accurate basis.
4.5 The Parent Name and Logos. As soon as practicable (but in any event
within 90 days) after the Closing Date, the Buyer, at its expense, shall remove
all the Parent and its affiliates' names and logos from all of the Assets.
Except as specifically provided in Section 1, nothing in this
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Agreement shall constitute a license or authorization for the Buyer to use in
any manner any name, logo or xxxx owned by or licensed to the Company, the
Parent or their respective affiliates which bears any reference to IES or any
subsidiary of IES other than the Company. The name "X. Xxxx Electric LP" or any
other name using the words "Xxxxx Xxxx," the name "Xxxxxxx Systems LP" or any
other name using the word "Xxxxxxx" shall be the property of Buyer after the
Closing Date and will not be used by the Parent or the Company after the
Closing, except that Parent will be given a reasonable period of time (not to
exceed 60 days) to change any company names after the Closing Date.
4.6 Leased Assets. At the Closing, the Buyer, at its expense, shall pay
off or refinance the leases on the vehicles listed on Schedule 4.6 attached
hereto, and in connection therewith shall obtain the release of Parent and the
Company for all liability under such vehicle leases. As soon as practicable (but
in any event within 90 days) after the Closing Date, the Buyer, at its expense,
shall pay off or refinance the leases on the other assets listed on Schedule 4.6
attached hereto, and in connection therewith shall obtain the release of Parent
and the Company for all liability under such leases. At the Closing, the Buyer
and the Company agree to enter into a Sublease Agreement in the form attached as
Exhibit B, pursuant to which the Company shall sublease to the Buyer, and the
Buyer shall sublease from the Company, the premises at 0000 Xxxxxxxxxx Xxxx
Xxxxx, Xxxxxx, Xxxxx.
4.7 Chubb Bonds. Buyer agrees that at the Closing it shall execute and
deliver to the Federal Insurance Company and its subsidiary or affiliated
insurers and any applicable co-sureties (collectively, "FEDERAL"), a General
Agreement of Indemnity in the form attached as Exhibit C, pursuant to which
Buyer and Guarantor agree to (i) indemnify Federal with respect to the
performance and completion of the bonded obligations as set forth therein; and
(ii) replace within ninety (90) days the bonds identified as Cancelable Bonds
therein. Buyer further agrees to continue to provide to Federal monthly written
reports (with a copy to the Parent) as to the progress of the completion of the
bonded jobs. Buyer and Guarantor further agree to provide, from time to time and
at the request of the Parent, a certificate or certificates certifying that the
Cancelable Bonds have been replaced, and as to such other matters concerning the
performance by the Buyer of its post-closing obligations under this Agreement as
Parent shall request.
4.8 Retained Claims. The Company shall retain liability for certain
insured claims as set forth in Schedule 1.5, paragraph 5 (the "RETAINED
CLAIMS"). The Buyer and the Guarantor agree to cooperate with the Company and
the Parent in the defense of the Retained Claims and to make available the
Buyer's personnel and facilities for that purpose. The Company shall retain as
Excluded Assets and not transfer to the Buyer all books and records associated
with the Retained Claims, as well as any reserves established on the books of
the Company for the Retained Claims, which reserves shall be paid in cash by the
Buyer to the Company at Closing.
5. INDEMNIFICATION.
5.1 Survival. The representations and warranties of the Company, the
Parent, the Buyer and the Guarantor contained in this Agreement, any schedules
delivered by or on behalf of the Company and the Buyer pursuant to this
Agreement, or in any certificate, instrument, agreement or other writing
delivered by or on behalf of the Company, the Parent. the Buyer or the Guarantor
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pursuant to this Agreement shall survive the consummation of the transactions
contemplated herein; provided that all such representations and warranties of
the Company, the Parent, the Buyer and the Guarantor shall be of no further
force and effect, and no claim for indemnification by the Buyer pursuant to this
Section 5 may be brought for any reason, after the expiration of twelve (12)
months from the Closing Date (the "SURVIVAL PERIOD"), except for the
representations and warranties contained in Section 3.1(c), which shall survive
indefinitely. Anything to the contrary notwithstanding, a claim for
indemnification which is made but not resolved prior to the expiration of the
Survival Period may be pursued and resolved after such expiration.
5.2 Indemnification by the Company.
(a) In accordance with and subject to the provisions of this Section
5, the Company and the Parent shall indemnify and hold harmless the Buyer
from and against and in respect of any and all loss, damage, diminution in
value, liability, cost and expense, including reasonable attorneys' fees
and amounts paid in settlement (collectively, the "BUYER INDEMNIFIED
LOSSES"), suffered or incurred by the Buyer by reason of, or arising out
of (i) any misrepresentation or breach of representation or warranty of
the Company or the Parent contained in this Agreement, or in any schedules
delivered to the Buyer by or on behalf of the Company or the Parent
pursuant to this Agreement; (ii) the breach of any covenant or agreement
of the Company or the Parent contained in this Agreement; or (iii) the
Retained Liabilities.
(b) The Company and the Parent shall reimburse the Buyer on demand
for any Buyer Indemnified Losses suffered by the Buyer with respect to
matters other than claims, actions or demands brought, made or instituted
by a third party ("THIRD PARTY CLAIMS"). With respect to Third Party
Claims, the Company and the Parent shall reimburse the Buyer on demand for
any Buyer Indemnified Losses suffered by the Buyer, based on the judgment
of any court of competent jurisdiction or pursuant to a bona fide
compromise or settlement in respect of any Buyer Indemnified Losses. The
Company and the Parent shall have the opportunity to defend at their
expense any claim, action or demand for which the Buyer claims indemnity
against the Company or the Parent; provided that: (i) the defense is
conducted by reputable counsel; (ii) the defense is expressly assumed in
writing within twenty (20) days after written notice of the claim, action
or demand is delivered to the Company and the Parent; and (iii) counsel
for the Buyer may participate at all times and in all proceedings (formal
and informal) relating to the defense, compromise and settlement of the
claim, action or demand at the expense of the Buyer.
5.3 Indemnification by the Buyer.
(a) In accordance with and subject to the provisions of this Section
5, the Buyer and the Guarantor shall, jointly and severally, indemnify and
hold harmless the Company, the Parent and their respective affiliates (for
purposes of this Section 5, the "COMPANY INDEMNITEES") from and against
and in respect of any and all loss, damage, diminution in value,
liability, cost and expense, including reasonable attorneys' fees and
amounts paid in settlement (collectively, the "COMPANY INDEMNIFIED
LOSSES"), suffered or incurred by the Company Indemnitees by reason of, or
arising out of (i) any misrepresentation or breach of
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representation or warranty of the Buyer or the Guarantor contained in this
Agreement, or in any schedules delivered to the Company or the Parent by
or on behalf of the Buyer or the Guarantor pursuant to this Agreement;
(ii) or the breach of any covenant or agreement of the Buyer or the
Guarantor contained in this Agreement; (iii) the Assumed Liabilities,
including, without limitation, any liability to sureties with respect to
bonded jobs; or (iv) the operation of the Business following the Closing,
including, but not limited to, any claims made by Transferred Employees
concerning COBRA, the WARN Act, unemployment claim liability, or any
similar matters as a result of the termination by Buyer of the Transferred
Employees.
(b) The Buyer and the Guarantor, jointly and severally (the "BUYER
INDEMNIFYING PARTIES") shall reimburse the Company Indemnitees on demand
for any Company Indemnified Losses suffered by the Company Indemnitees
with respect to matters other than Third Party Claims. With respect to
Third Party Claims, the Buyer Indemnifying Parties shall reimburse the
Company Indemnitees on demand for any Company Indemnified Losses suffered
by the Company Indemnitees, based on the judgment of any court of
competent jurisdiction or pursuant to a bona fide compromise or settlement
in respect of any Company Indemnified Losses. The Buyer Indemnifying
Parties shall have the opportunity to defend at their expense any claim,
action or demand for which the Company Indemnitees claim indemnity against
the Buyer Indemnifying Parties; provided that: (i) the defense is
conducted by reputable counsel; (ii) the defense is expressly assumed in
writing within twenty (20) days after written notice of the claim, action
or demand is delivered to the Buyer Indemnifying Parties; and (iii)
counsel for the Company and the Parent may participate at all times and in
all proceedings (formal and informal) relating to the defense, compromise
and settlement of the claim, action or demand at the expense of the
Company and the Parent.
5.4 Limitation and Payment on Claims. No claim shall be brought under this
Section 5 for breach of any representation or warranty, and no party hereto
shall be entitled to receive any payment with respect thereto, until such time
as, and only to the extent that, the aggregate amount of such claim(s) that such
party has equals or exceeds $100,000 (the "DEDUCTIBLE"); provided, however, that
the Deductible shall not apply to any obligations under Section 2.3. Anything to
the contrary notwithstanding, the Company and the Parent shall not be liable
under this Section 5 for Buyer Indemnified Losses in excess of the Purchase
Price.
5.5 Sole Remedy. The sole remedy of the Company, the Parent and the Buyer
Indemnifying Parties for breach of the representations and warranties set forth
in Section 3 shall be pursuant to this Section 5.
6. DISPUTE RESOLUTION.
6.1 Arbitration.
(a) Any controversy, dispute or claim arising out of or relating in
any way to this Agreement or the other agreements contemplated by this
Agreement or the transactions arising hereunder (including the validity,
interpretation or applicability of this Section 6.1) shall be settled
exclusively by final and binding arbitration in Houston, Texas. Such
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arbitration will apply the laws of the State of Texas and the commercial
arbitration rules of AAA to resolve the dispute, and will be administered
by the AAA.
(b) Written notice of arbitration must be given within one year
after the notifying party has knowledge of accrual of the claim on which
the notice is based. If the claiming party fails to give notice of
arbitration within that time, the claim shall be deemed to be waived and
shall be barred from either arbitration or litigation.
(c) Such arbitration shall be conducted by one independent and
impartial arbitrator to be selected by mutual agreement of the parties, if
possible. If the parties fail to reach agreement regarding appointment of
an arbitrator within thirty (30) days following receipt by one party of
the other party's notice of arbitration, the arbitrator shall be selected
from a list or lists of proposed arbitrators submitted by AAA. Unless the
parties agree otherwise, the arbitrator shall be a licensed attorney with
at least ten years of experience in the practice of law. The selection
process shall be that which is set forth in the AAA commercial arbitration
rules then prevailing, except that (A) the number of preemptory strikes
shall not be limited and (B), if the parties fail to select an arbitrator
from one or more lists, AAA shall not initially have the power to make an
appointment but shall continue to submit additional lists until an
arbitrator has been selected, but if no such arbitrator is selected within
sixty (60) days after the receipt of the first notice of arbitration, the
AAA shall have the power to make an appointment and shall promptly do so.
Initially, however, promptly following its receipt of a request to submit
a list of proposed arbitrators, AAA shall convene the parties in person or
by telephone and attempt to facilitate their selection of an arbitrator by
agreement. If the arbitrator should die, withdraw or otherwise become
incapable of serving, a replacement shall be selected and appointed in a
like manner.
(d) The arbitrator shall render an opinion setting forth findings of
fact and conclusions of law with the reasons therefor stated. A transcript
of the evidence adduced at the hearing shall be made and shall, upon
request, be made available to either party. The fees and expenses of the
arbitrator shall be shared equally by the parties and advanced by them
from time to time as required; provided that at the conclusion of the
arbitration, the arbitrator may award costs and expenses (including the
costs of the arbitration previously advanced and the fees and expenses of
attorneys, accountants and other experts). No pre-arbitration discovery
shall be permitted, except that the arbitrator shall have the power in his
or her sole discretion, on application by either party, to order
pre-arbitration examination of the witnesses and documents that the other
party intends to introduce in its case-in-chief at the arbitration
hearing. The arbitrator shall render his or her opinion and/or award
within ninety (90) days of the conclusion of the arbitration hearing. The
arbitrator shall not be empowered to award to either party any punitive
damages in connection with any dispute between them arising out of or
relating in any way to this Agreement or the other agreements contemplated
hereby or the transactions arising hereunder or thereunder, and each party
hereby irrevocably waives any right to recover such damages. The
arbitration hearings and award shall be maintained in confidence.
Notwithstanding anything to the contrary provided in this Section 6.1 and
without prejudice to the above procedures, either party may apply to any court
of competent jurisdiction for
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temporary injunctive or other provisional judicial relief if such action is
necessary to avoid irreparable damage or to preserve the status quo until such
time as the arbitrator is selected and available to hear such party's request
for temporary relief. The award rendered by the arbitrator shall be final and
not subject to judicial review and judgment thereon may be entered in any court
of competent jurisdiction.
7. EMPLOYEE MATTERS.
7.1 Hiring.
(a) The Buyer shall hire (subject to each employee's agreement),
effective as of the Closing Date, all of the employees of the Company on
the day immediately prior to the Closing Date, active or inactive (such
employees being hereafter referred to as the "TRANSFERRED EMPLOYEES") at a
comparable job and at a rate of pay not less than each such Transferred
Employee's pay as of September 30, 2004. Upon request of the Buyer, the
Company shall provide the Buyer reasonable access to data (including
computer data) regarding the ages, dates of hire, compensation and job
description of the Transferred Employees.
(b) The Buyer shall assume and be responsible for any severance
costs associated with the termination of the Transferred Employees'
employment with the Company. The Buyer shall discharge all liabilities and
claims based on occurrences or conditions first occurring or commencing on
or after the Closing Date with respect to Transferred Employees arising
out of their employment with the Buyer after the Closing Date, including,
but not limited to, any claims arising out of any employee benefit plan,
policy, program or arrangement maintained at any time by the Buyer (a
"BUYER PLAN" or collectively, the "BUYER PLANS"), except Buyer shall not
assume any liabilities with respect to the WARN Act or COBRA benefits for
any terminations occurring prior to the Closing Date (unless provided
otherwise by law or pursuant to applicable regulations) nor shall the
Company or the Parent be liable under the WARN Act, COBRA, or state
unemployment claims law for any Transferred Employee terminated by Buyer
after the Closing.
(c) At Closing, the Buyer shall establish and make available a group
medical plan for the Transferred Employees and their dependents that is
substantially similar to the group medical plan available to the
Transferred Employees immediately prior to Closing. The Buyer shall credit
the Transferred Employees with all service of the Transferred Employees
recognized under the employee benefit plans, policies, programs, or
arrangements maintained by the Parent or the Company (the "PARENT PLANS")
as service with the Buyer for purposes of eligibility to participate,
vesting and levels of benefits available, under all Buyer Plans. The Buyer
shall waive any coverage waiting period, pre-existing condition and
actively-at-work requirements under the Buyer Plans for the Transferred
Employees 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
11
contributions by Transferred Employees at a rate that exceeds the rate in
effect for other similarly situated employees of the Buyer. Any reports or
other information provided to Buyer by the Company or the Parent in
connection with Buyer performing his obligations under this Section 7.1(c)
shall be at the sole expense of the Buyer.
7.2 Benefits. Except as provided in Section 7.1(b), the Buyer shall be
responsible for the payment of all amounts of wages, bonuses and other
remuneration (including discretionary benefits and bonuses) payable to the
Transferred Employees of the Company accrued with respect to periods on or prior
to the Closing (except for any employment taxes actually withheld by the
Company) together with amounts payable to such employees in connection with
events occurring on or prior to the Closing. In addition, the Buyer shall be
responsible for:
(a) all vacation pay and pay for other compensated absences earned
or accrued by the Transferred Employees as of the close of business on the
Closing Date to the appropriate employee, including any related payroll
burden (FICA and other pension or other employee benefit plan
contributions and employment taxes) with respect thereto to the
appropriate Governmental Entity or other person, to the extent such pay
has been accrued on the books of the Company at such close of business,
based upon the remuneration of such employees normally used in computing
such pay for other compensated absences; and
(b) amounts accrued under the Integrated Electrical Services, Inc.
401(k) Retirement Savings Plan (the "PARENT 401(k) PLAN") for the
Transferred Employees as of the Closing Date but not yet transferred to
the trustee of the Parent 401(k) Plan, including without limitation, the
accrued match, accrued payroll deductions representing elective deferrals,
loan repayments and accrued profit sharing contribution, if any.
7.3 Parent 401(k) Plan. The Company, the Parent and the Buyer agree that,
as soon as practicable after Closing, but in any event within 90 days of the
Closing Date, the account balances in the Parent 401(k) Plan of the Transferred
Employees shall be transferred to a qualified 401(k) retirement savings plan
established by the Buyer (the "BUYER'S 401(k) PLAN") in accordance with Section
414(l) of the Internal Revenue Code of 1986, as amended (the "CODE"), and the
regulations promulgated thereunder. In connection with such transfer, the
following provisions shall apply:
(a) The account balances of the Transferred Employees transferred to
the Buyer's 401(k) Plan shall be subject to the provisions of the Buyer's
401(k) Plan effective as of the date of transfer; provided, however that
the Buyer's 401(k) Plan shall continue any benefits under the Parent
401(k) Plan as required under Section 411(d)(6) of the Code; and
(b) The outstanding loan of any Transferred Employee shall not be in
default as a result of the Transferred Employee's termination of
employment with the Parent or the Company, but such loan shall be
transferred to the Buyer's 401(k) Plan in accordance with (a) above.
The Buyer shall provide acceptable evidence to the Parent that the Buyer's
401(k) Plan meets the requirements of Section 401(a) of the Code prior to
the date of such transfer. The Buyer, the Parent and the Company agree to
take whatever action, including but not limited
12
to plan amendments and resolutions, to effectuate the transfer of the
Transferred Employee's account balances according to this section from the
Parent 401(k) Plan to the Buyer's 401(k) Plan.
Notwithstanding the foregoing, nothing in this Section 7 shall be deemed or
construed to give rise to any rights, claims, benefits, or causes of action to
any Transferred Employee or third party whatsoever (including any Governmental
Entity).
7.4 Non-Competition and Other Employment Agreements. All (i)
non-competition and (ii) other employment agreements now existing between Buyer
and the Parent and/or the Company shall be terminated at the Closing and each
party thereto shall release the other from any liability associated therewith.
8. MISCELLANEOUS.
8.1 Notices. All notices and communications required or permitted
hereunder shall be in writing and may be given by (a) depositing the same in the
United States mail, addressed to the party to be notified, postage prepaid and
registered or certified with return receipt requested, (b) by delivering the
same in person to an officer or agent of such party, or (c) overnight delivery
service. Such notice shall be deemed received on the date (i) on which it is
actually received if sent by overnight delivery service or hand delivery, or
(ii) on the third business day following the date on which it is mailed. For
purposes of notice, the addresses of the parties hereto shall be:
If to the Parent or the Company:
Integrated Electrical Services, Inc.
0000 Xxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
With a copy to:
Integrated Electrical Services, Inc.
0000 Xxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Chief Legal Officer
If to the Buyer:
Xxxxx Xxxx Construction Company, LP
0000X Xxxxxxxx Xxxxx
Xxxxxxx Xxxxxxx, Xxxxx 00000
If to the Guarantor:
13
Xxxxx X. Xxxx
0000 X Xxxxxxxx Xxxxx
Xxxxxxx Xxxxxxx, XX 00000
or such other address as any party hereto shall specify pursuant to this Section
8.1 from time to time.
8.2 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
8.3 Governing Law. The validity and effect of this Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of Texas, without regard to its conflicts of laws rules.
8.4 Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective permitted heirs,
successors and assigns. Neither the Company, the Parent nor the Buyer may
assign, delegate or otherwise transfer any of their rights or obligations under
this Agreement without the written consent by each other party hereto.
8.5 Partial Invalidity and Severability. All rights and restrictions
contained herein may be exercised and shall be applicable and binding only to
the extent that they do not violate any applicable laws and are intended to be
limited to the extent necessary to render this Agreement legal, valid and
enforceable. If any term of this Agreement, or part thereof, not essential to
the commercial purpose of this Agreement shall be held to be illegal, invalid or
unenforceable by a forum of competent jurisdiction, it is the intention of the
parties that the remaining terms hereof, or part thereof, shall constitute their
agreement with respect to the subject matter hereof, and all such remaining
terms, or parts thereof, shall remain in full force and effect. To the extent
legally permissible, any illegal, invalid or unenforceable provision of this
Agreement shall be replaced by a valid provision which will implement the
commercial purpose of the illegal, invalid or unenforceable provision.
8.6 Waiver. Any term or condition of this Agreement may be waived at any
time by the party which is entitled to the benefit thereof, but only if such
waiver is evidenced by a writing signed by such party. No failure on the part of
any party hereto to exercise, and no delay in exercising, any right, power or
remedy created hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any right, power or remedy by either party preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. No waiver by either party hereto of any breach of or default in any term
or condition of this Agreement shall constitute a waiver of or assent to any
succeeding breach of or default in the same or any other term or condition
hereof.
8.7 Headings. The headings of particular provisions of this Agreement are
inserted for convenience only and shall not be construed as a part of this
Agreement or serve as a limitation or expansion on the scope of any term or
provision of this Agreement.
14
8.8 Entire Agreement; Amendments. This Agreement supersedes all prior
discussions and agreements between the parties with respect to the subject
matter hereof (including without limitation any letters of intent executed by
the parties), and this Agreement contains the sole and entire agreement between
the parties with respect to the matters covered hereby. This Agreement shall not
be altered or amended except by an instrument in writing signed by or on behalf
of the party against whom enforcement is sought.
8.9 Disclosure of Agreement Terms. The Buyer shall not disclose the terms
and conditions of this Agreement to any person or entity without the prior
written consent of an executive officer of the Parent or as required by
applicable law or an order from a court or administrative body of competent
jurisdiction (but only to the extent so required and only after giving
reasonable prior notice to the Company and the Parent and cooperating with the
Company and the Parent in any efforts to legally oppose such disclosure). The
foregoing notwithstanding, the Buyer shall be permitted to make such disclosures
to its accountants, lawyers, financial institutions, lending sources, employees
and related parties as may be appropriate, provided that such parties are bound
by the foregoing nondisclosure provisions.
8.10 Number and Gender. Where the context requires, the use of the
singular form herein shall include the plural, the use of the plural shall
include the singular, and the use of any gender shall include any and all
genders.
15
IN WITNESS WHEREOF, this Agreement has been executed effective as of the
date set forth above.
PARENT:
INTEGRATED ELECTRICAL SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
COMPANY:
X. XXXX ELECTRIC LP
By: XXXXX XXXX MANAGEMENT LLC,
its general partner
By: /s/ Xxxx X. Xxxxxxx
-------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
XXXXXXX SYSTEMS LP
By: XXXXXXX MANAGEMENT LLC,
its general partner
By: /s/ Xxxx X. Xxxxxxx
-------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
BUYER:
XXXXX XXXX CONSTRUCTION COMPANY, LP
By: XXXXX XXXX HOLDING COMPANY, LLC,
its general partner
By: /s/ Xxxxx X. Xxxx
-------------------------
Name: Xxxxx X. Xxxx
Title: President
16
GUARANTOR
/s/ Xxxxx X. Xxxx
---------------------------------------
XXXXX X. XXXX
17
EXHIBIT A
XXXX OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT
This XXXX OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT ("Xxxx of Sale") is
entered into as of the ___ day of October 2004, by and among INTEGRATED
ELECTRICAL SERVICES, INC., a Delaware corporation (the "Parent"), [__________],
a [________]corporation (the "Company") and [__________________], an individual
and resident of the State of [__________](the "Buyer").
RECITALS
WHEREAS, pursuant to the terms of that certain Asset Purchase Agreement
(the "Purchase Agreement") dated as of even date herewith by and among the
Buyer, the Parent and the Company, the Company and the Parent agreed to convey
the Assets to the Buyer and the Buyer agreed to assume the Assumed Liabilities.
In order to evidence such conveyance and assumption, the parties desire to enter
into this Xxxx of Sale.
WHEREAS, all capitalized terms used herein but not defined herein shall
have the meanings ascribed to them in the Purchase Agreement.
ASSIGNMENT
NOW, THEREFORE, for and in consideration of the mutual covenants,
agreements, and benefits contained herein, the sum of TEN DOLLARS ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Parent do hereby BARGAIN, GRANT, SELL,
CONVEY, TRANSFER, DELIVER and ASSIGN unto Buyer all the Assets.
The Assets are hereby conveyed free and clear of all encumbrances other
than the Permitted Encumbrances.
TO HAVE AND TO HOLD the Assets unto the Buyer and its successors and
assigns forever; and the Company and the Parent do hereby bind themselves and
their successors and assigns to WARRANT AND FOREVER DEFEND title to the Assets
in accordance with the terms and provisions of the Purchase Agreement.
The Buyer, upon execution below, accepts this Xxxx of Sale, and to the
extent provided for in the Purchase Agreement, hereby assumes the Assumed
Liabilities, but no others.
This assignment shall be binding upon and shall inure to the benefit of
the parties hereto and their respective permitted successors and assigns.
This Xxxx of Sale may be executed in any number of counterparts, and each
counterpart shall for all purposes be deemed to be an original.
This Xxxx of Sale is subject to all terms and conditions contained in the
Purchase Agreement and nothing herein shall be deemed to alter, amend, or
supersede the Purchase Agreement, the terms of which shall in all respects be
controlling.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have executed this Xxxx of Sale
effective as of the date set forth above.
PARENT:
INTEGRATED ELECTRICAL SERVICES, INC.
By: ____________________________________
Name: __________________________________
Title: _________________________________
COMPANY:
[ ]
By: ____________________________________
Name: __________________________________
Title: _________________________________
BUYER:
By: ____________________________________
Name: __________________________________
EXHIBIT B
FORM OF SUBLEASE AGREEMENT
SUBLEASE AGREEMENT
This SUBLEASE AGREEMENT (this "SUBLEASe") is entered into as of December
____, 2004 (the "EFFECTIVE DATE"), between XXXXXXX SYSTEMS LP, a Texas limited
partnership ("SUBLESSOR") and XXXXX XXXX CONSTRUCTION COMPANY, LP, a Texas
limited partnership ("SUBLESSEE"), with reference to the following:
WITNESSETH:
WHEREAS, on December 20, 1999, XXXXX COMMONWEALTH I, LTD. ("LANDLORD"),
entered into that certain Standard Industrial/Commercial Single-Tenant Lease
(the "PRIMARY LEASE"), whereby certain premises (the "ORIGINAL PREMISES")
containing approximately 8,172 rentable square feet of office/warehouse space
located at 0000 Xxxxxxxxxx Xxxx Xx., Xxxxxx, Xxxxx (the "BUILDING"), were leased
to Sublessor as Tenant;
WHEREAS, the Primary Lease was amended pursuant to that certain Addendum
dated as of February 3, 2000 (the "ADDENDUM") and by that certain Second
Amendment to Lease (the "SECOND Amendment") wherein among other things, the
lessor was granted options to extend the term of the Primary Lease through May
31, 2006 (the Primary Lease, as amended by the Addendum and the Second
Amendment, and as further amended, supplement or restated, is hereinafter
referred to as the "Primary Lease"). Capitalized terms used herein but not
defined herein shall have the meanings set forth in the Primary Lease;
WHEREAS, a copy of the Primary Lease and any subsequent amendments are
attached hereto as EXHIBIT "A" and incorporated herein by reference for all
purposes;
WHEREAS, in connection with the transactions contemplated by that certain
Asset Purchase Agreement of even date herewith between Sublessor, Sublessee and
certain other parties (the "Purchase Agreement"), Sublessor desires to sublease
the Premises to Sublessee, and Sublessee wishes to sublease the Premises from
Sublessor;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Sublessor and Sublessee agree as
follows:
9. SUBLEASE. Sublessor subleases the Premises to Sublessee, and Sublessee
subleases the Premises from Sublessor (the Premises, as subleased to the
Sublessee, hereinafter referred to as the "SUBLEASED PREMISES").
10. TERM. The term (the "TERM") of the Sublease shall be for a period of six (6)
months commencing on December ___, 2004, and ending on June ___, 2005 (the
"EXPIRATION DATE"), unless extended month-to-month thereafter at the option of
the Sublessee; provided, however, that this Sublease shall terminate no later
than the termination, for any cause whatsoever, of the Primary Lease.
11. RENT.
11.1 Sublessee agrees to pay Sublessor for the use of the Subleased
Premises $4,339.33 per month, plus any applicable tax thereon ("BASE RENT").
11.2 The Base Rent shall be paid in advance on or before the first day of
each calendar month without notice or demand. Base Rent for any partial month
shall be prorated and Sublessee agrees to pay the prorated amount of December's
Base Rent of $______ at the time of execution of this Sublease.
11.3 Sublessee further agrees to pay, as additional rent (the "EXTRA
RENT"), all amounts billed by Landlord to Sublessor as Additonal Rental
(including without limitation, utility costs, expense escalation amounts and
real estate tax escalation amounts) due under the Primary Lease which is
applicable to the Term of this Sublease. Sublessor shall invoice Sublessee for
such Extra Rent by providing Sublessee copies of the invoice received by
Sublessor from the Landlord. Sublessee agrees to make all such payments to
Sublessor at least five (5) days prior to the date on which Sublessor is
required to make such payments to Landlord pursuant to the Primary Lease (Base
Rent plus Extra Rent hereinafter referred to as "RENT"). Notwithstanding
anything contained herein to the contrary, payment of the Extra Rent is due and
payable monthly.
12. USE. The Subleased Premises will be occupied and used by Sublessee only for
the purposes set forth in the Primary Lease.
13. PRIMARY LEASE.
13.1 The terms and conditions of the Primary Lease are incorporated herein
by reference for all purposes (other than any renewal options, right to sublease
or assign and any economic concessions granted to Sublessor as the Tenant under
the Primary Lease), and Sublessee, by Sublessee's execution hereof, acknowledges
that Sublessor has furnished Sublessee with a copy of the Primary Lease and that
Sublessee has examined the Primary Lease and is familiar with the terms thereof.
Except as otherwise expressly provided in this Sublease, Sublessee agrees to
comply in all respects with the terms and conditions of the Primary Lease as if
Sublessee were the tenant under the Primary Lease insofar as the same are
applicable to the Subleased Premises.
13.2 Except as otherwise set forth herein, as between Sublessor and
Sublessee, Sublessor shall be entitled to all of the rights and remedies
reserved by and granted to the landlord in the Primary Lease as if Sublessor was
the "Landlord" under the Primary Lease and Sublessee was the "Tenant" under the
Primary Lease, and such rights and remedies are incorporated herein by reference
for all purposes.
13.3 This Sublease is subject and subordinate to all of the terms,
covenants and conditions of the Primary Lease and to all of the rights of
Landlord under the Primary Lease. If the Primary Lease terminates for any reason
prior to the expiration or termination of this Sublease, Sublessee shall not
have any claim whatsoever against Sublessor arising or resulting from such
termination of the Primary Lease.
14. LIMITATION OF LIABILITY AND INDEMNITY. Notwithstanding any provision of the
Primary Lease to the contrary, neither Landlord nor the Sublessor shall be
liable to Sublessee, or any of its agents, employees, servants or invitees, for
any damage to persons or property due to the condition
or design or any defect in the Building or its mechanical systems which may
exist or subsequently occur, and Sublessee with respect to itself and its
agents, employees, servants and invitees, expressly assumes all risks and damage
to persons and property, either proximate or remote, by the reason of the
present or future condition of the Subleased Premises or the Building. All
indemnification, hold harmless and release provisions contained in the Primary
Lease running to the benefit of Landlord are incorporated herein by reference
with respect to the Subleased Premises for the benefit of Sublessor as if
Sublessor was the "Landlord" and Sublessee was the "Tenant" under the Primary
Lease. FURTHERMORE, NEITHER SUBLESSOR NOR LANDLORD SHALL BE LIABLE TO SUBLESSEE
FOR, AND UNLESS CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
SUBLESSOR, SUBLESSEE SHALL SAVE SUBLESSOR AND LANDLORD HARMLESS FROM AND
AGAINST, ANY AND ALL LOSS, COST, LIABILITY, CLAIM, DAMAGE AND EXPENSE,
INCLUDING, WITHOUT LIMITATION, REASONABLE COUNSEL FEES, PENALTIES AND FINES
INCURRED IN CONNECTION WITH OR ARISING FROM ANY INJURY OR DAMAGE TO SUBLESSEE OR
TO ANY OTHER PERSON OR FOR ANY DAMAGE TO, OR LOSS (BY THEFT OR OTHERWISE) OF,
ANY OF SUBLESSEE'S PROPERTY AND/OR OF THE PROPERTY OF ANY OTHER PERSON, CAUSED
BY OR RESULTING FROM ANY ACT OR OMISSION OF SUBLESSEE, ITS EMPLOYEES, AGENTS,
CONTRACTORS AND INVITEES. SUBLESSEE AGREES TO INDEMNIFY AND SAVE SUBLESSOR AND
LANDLORD HARMLESS FROM AND AGAINST ALL LOSS, COST, LIABILITY, CLAIMS, DAMAGE AND
EXPENSE (INCLUDING, WITHOUT LIMITATION, REASONABLE COUNSEL FEES), PENALTIES AND
FINES, INCURRED IN CONNECTION WITH OR ARISING FROM (A) ANY DEFAULT BY SUBLESSEE
IN THE OBSERVANCE OR PERFORMANCE OF ANY OF THE TERMS, COVENANTS OR CONDITIONS OF
THIS SUBLEASE, OR (B) THE USE OR OCCUPANCY OR MANNER OF USE OR OCCUPANCY OF THE
SUBLEASED PREMISES BY SUBLESSEE OR ANY PERSON CLAIMING THROUGH OR UNDER
SUBLESSEE, OR (C) ANY ACTS, OMISSIONS OR NEGLIGENCE OF SUBLESSEE, ITS EMPLOYEES,
AGENTS, CONTRACTORS AND INVITEES. IF ANY ACTION OR PROCEEDING SHALL BE BROUGHT
AGAINST SUBLESSOR OR LANDLORD BY REASON OF ANY SUCH CLAIM, SUBLESSEE, UPON
NOTICE FROM SUBLESSOR OR LANDLORD, AS THE CASE MAY BE, AGREES TO RESIST OR
DEFEND SUCH ACTION OR PROCEEDING AND TO EMPLOY COUNSEL THEREFORE REASONABLY
SATISFACTORY TO SUBLESSOR OR LANDLORD, AS THE CASE MAY BE. SUBLESSEE SHALL PAY
TO SUBLESSOR AND/OR LANDLORD AS THE CASE MAY BE, ON DEMAND, ALL REASONABLE SUMS
WHICH MAY BE OWING TO SUBLESSOR OR LANDLORD BY REASON OF THE PROVISIONS OF THIS
PARAGRAPH. SUBLESSEE'S OBLIGATIONS UNDER THIS PARAGRAPH SHALL SURVIVE THE
TERMINATION OR EXPIRATION OF THIS SUBLEASE.
15. CONDITION OF SPACE. Sublessee has inspected the Subleased Premises and
agrees to accept the same "AS-IS" condition during the Sublease Term without any
agreements, representation, understanding or obligation on the part of Sublessor
to perform any alterations, repairs or improvements. SUBLESSEE ACKNOWLEDGES THAT
NEITHER SUBLESSOR NOR LANDLORD HAS MADE OR WILL MAKE ANY WARRANTIES TO SUBLESSEE
WITH RESPECT TO THE QUALITY OF CONSTRUCTION OF ANY LEASEHOLD IMPROVEMENTS OR
TENANT FINISH WITHIN THE SUBLEASED PREMISES OR AS
TO THE CONDITION OF THE SUBLEASED PREMISES, EITHER EXPRESS OR IMPLIED, AND THAT
SUBLESSOR AND LANDLORD EXPRESSLY DISCLAIM ANY IMPLIED WARRANTY THAT THE
SUBLEASED PREMISES ARE HABITABLE OR WILL BE SUITABLE FOR SUBLESSEE'S INTENDED
COMMERCIAL PURPOSES. EXCEPT AS EXPRESSLY PROVIDED HEREIN, SUBLESSEE'S OBLIGATION
TO PAY RENTALS UNDER THIS SUBLEASE IS NOT DEPENDENT UPON THE CONDITION OF THE
SUBLEASED PREMISES OR THE BUILDING (NOW OR IN THE FUTURE OR THE PERFORMANCE BY
LANDLORD OF ITS OBLIGATIONS UNDER THE PRIMARY LEASE, AND EXCEPT AS OTHERWISE
PROVIDED IN THIS SUBLEASE, SUBLESSEE SHALL CONTINUE TO PAY THE RENTALS HEREUNDER
WITHOUT ABATEMENT, SETOFF OR DEDUCTION NOTWITHSTANDING ANY BREACH BY SUBLESSOR
OF ITS DUTIES OR OBLIGATIONS HEREUNDER OR BY LANDLORD OF ITS DUTIES OR
OBLIGATIONS UNDER THE PRIMARY LEASE, WHETHER EXPRESS OR IMPLIED.
16. ALTERATIONS. Sublessee may not make any alterations, improvements or
additions to the Subleased Premises (collectively, "IMPROVEMENTS") without the
express prior written consent of Landlord and Sublessor. Any Improvements to
which Landlord and Sublessor consent must be constructed and installed in
accordance with (i) all requirements contained in the Primary Lease, and (ii)
any requirements imposed by Sublessor to protect Sublessor's interest in the
Primary Lease and/or in the Subleased Premises. Sublessee shall comply with the
requirements of the Primary Lease applicable to the tenant thereunder.
17. DAMAGE AND DESTRUCTION.
17.1 If the Subleased Premises, or any portion thereof, are damaged or
destroyed by any cause whatsoever, such that the Primary Lease is terminated,
this Sublease shall terminate immediately upon termination of the Primary Lease.
Rent and any other payments for which Sublessee is liable shall be apportioned
and paid to the date of such damage or destruction, and Sublessee shall
immediately deliver possession of the Subleased Premises to Sublessor.
17.2 If all or any portion of the Subleased Premises is damaged or
destroyed by any cause whatsoever, and such damage or destruction is not
significant enough to cause a termination of the Primary Lease, Sublessor
agrees, subject to the Primary Lease, to use good faith efforts to cause
Landlord to repair such damage. Notwithstanding any such damage, Sublessee shall
continue to be obligated to pay all rent under this Sublease during the period
of restoration to the extent Sublessor remains obligated to pay rent under the
Primary Lease.
18. CONDEMNATION. Upon any taking by condemnation or other eminent domain
proceeding of all or a portion of the Premises which results in the termination
of the Primary Lease, this Sublease shall terminate concurrently with the
Primary Lease. As between Sublessor and Sublessee, any awards or damages payable
as a result of such taking by condemnation or other eminent domain proceeding
shall be the sole property of Sublessor, and Sublessee shall have no claim to
any part thereof.
19. PARKING. Sublessor shall provide all of the unreserved parking spaces in the
Building Garage to which Sublessor is entitle under the Primary Lease (the
"PARKING SPACES") to Sublessee
during the term of this Sublease. Sublessee agrees to observe, and cause its
employees, agents and invitees to observe, all rules and regulations of Landlord
relating to the use of the Parking Spaces. Sublessee acknowledges and agrees
that to the fullest extent permitted by law, neither Landlord nor Sublessor
shall be responsible for any loss or damage to Sublessee or Sublessee's property
(including without limitation, any loss or damage to Sublessee's automobiles or
the contents therefore due to theft, vandalism, or accident) arising from or
related to Sublessee's use of the Parking Facilities or exercise of any rights
under this Sublease or the Primary Lease, whether or not such loss or damage
results from Landlord's or Sublessor's active negligence or negligent omissions.
The limitation of Sublessor's liability under the preceding sentence shall not
apply, however, to loss or damage arising directly from Sublessor's willful
misconduct. Notwithstanding anything contained herein to the contrary, Sublessee
hereby voluntarily releases, discharges, waives, and relinquishes any and all
actions or causes of action for personal injury or property damage occurring to
Sublessee arising as a result of using the Parking Spaces, or any activities
incidental thereto, wherever or however the same may occur, and further agrees
that Sublessee will not prosecute any claim for personal injury or property
damage against Landlord or Sublessor, or any other their officers, agents,
servants, or employees for any such cause of action. It is the intention of
Sublessee by execution of this Sublease, to exempt and relieve Landlord and
Sublessor from liability for personal injury or property damage caused by
negligence.
20. BROKERS. Sublessee acknowledges that Sublessee has not employed a broker
with respect to this Sublease. Sublessee hereby agrees to defend, indemnify and
hold harmless Sublessor, from and against any claim by any other party for
brokerage, commission, finder's or other fees relative to this Sublease or the
subleasing of the Subleased Premises to Sublessee, and any court costs,
attorneys' fees or other costs or expenses arising therefrom, which are alleged
to be due by authorization of the indemnifying party.
21. SECURITY INTEREST. In consideration of the mutual benefits arising under
this Sublease, Sublessee hereby grants to Sublessor a lien and security interest
on all property of Sublessee now or hereafter placed in or upon the Subleased
Premises, and such property shall be and remain subject to such lien and
security interest of Sublessor herein. The provisions of this Section relating
to said lien and security interest shall constitute a security agreement under
the Uniform Commercial Code of the State of Texas ("CODE") so that Sublessor
shall have and may enforce a security interest on all property of Sublessee now
or hereafter placed in or on the Subleased Premises, including but not limited
to all fixtures, machinery, equipment, furnishings and other articles of
personal property now or hereafter placed in or upon the Subleased Premises by
Sublessee. Sublessee agrees to execute as debtor such financing statement or
statements as Sublessor may now or hereafter reasonably request in order that
such security interest on interests may be protected pursuant to said Code.
Sublessor may at its election at any time file a copy of this Sublease as a
financing statement. Sublessor, as secured party, shall be entitled to all of
the rights and remedies afforded a secured party under said Code in addition to
and cumulative of the Sublessor's liens and rights provided by law or by the
other terms and provisions of the Sublease. Notwithstanding the foregoing,
Sublessor agrees to subordinate such lien and security interest to the lien and
security interest of any lender providing to Sublessee purchase money, leasehold
improvement, equipment or working capital or financing either as of or after the
date of this Sublease in a form and substance reasonably acceptable to
Sublessor.
22. WAIVER OF LIENS. Sublessee shall have no right, and Sublessee hereby waives
and relinquishes all rights which Sublessee might otherwise have, to claim any
nature of lien against the Building or the Subleased Premises or to withhold,
deduct from or offset against any Rent or other sums to be paid to Sublessor by
Sublessee, except as expressly provided under this Sublease.
23. SURRENDER. On the termination of this Sublease, Sublessee shall quit and
surrender the Subleased Premises to Sublessor broom-clean and in good order,
condition and repair, except for ordinary wear and tear, and in accordance with
the applicable provisions of the Primary Lease. If the Subleased Premises are
not surrendered upon the termination of this Sublease, Sublessee hereby
indemnifies Sublessor from and against any and all loss, cost, liability, claim,
damage and expense resulting from either the failure to surrender the Subleased
Premises in the manner required herein, or any delay by Sublessee in so
surrendering the Subleased Premises and Sublessee, at the option of Sublessor,
shall be deemed to be occupying the Subleased Premises as a tenant at
sufferance, at a monthly rental equal to one hundred fifty percent (150%) of the
Rent Sublessor is obligated to pay to Landlord during any such holdover period
for the Premises and subject to all of the other terms of this Sublease insofar
as the same are applicable to a month to month tenancy. In addition, Sublessee
agrees to indemnify Sublessor from and against any and all claims or loss
arising under any provisions of the Primary Lease due to the failure of
Sublessee to surrender possession of the Subleased Premises. Sublessee's
obligations under this Section shall survive the termination or expiration of
this Sublease.
24. WAIVER OF CLAIMS. SUBLESSOR SHALL NOT BE LIABLE TO SUBLESSEE AND SUBLESSEE
HEREBY WAIVES ANY AND ALL CLAIMS OR CAUSES OF ACTION IT MAY HAVE AGAINST
SUBLESSOR, FOR ANY LOSS OR DAMAGE INCLUDING BUT NOT LIMITED TO, LOSS OF
BUSINESS, TO ANY PROPERTY OR PERSON OCCASIONED BY THEFT, FIRE, ACT OF GOD,
PUBLIC ENEMY, INJUNCTION, RIOT, FLOOD, NATURAL DISASTER, STRIKE, INSURRECTION,
WAR, COURT ORDER, REQUISITION OR ORDER OF GOVERNMENTAL BODY OR AUTHORITY OR ANY
OTHER CAUSE, INCLUDING BUT NOT LIMITED TO, THE NEGLIGENCE OR MISCONDUCT OF
SUBLESSOR, BUT EXCLUDING THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
SUBLESSOR.
25. DEFAULTS.
25.1 Sublessee's Default. In the event that Sublessee shall default (i) in
the performance of any of the terms, covenants and conditions on its part to be
performed under this Sublease, or (ii) in the performance of any of the terms,
covenants and conditions to be performed on Sublessor's part under the Primary
Lease with respect to the Subleased Premises, and the same are not cured within
the time periods provided in the Primary Lease or the Sublease, whichever is
shorter, then Sublessor shall have the same rights and remedies with respect to
such default as are given to Landlord under the Primary Lease with respect to
defaults by Sublessor under the Primary Lease, all with the same force and
effect as though the provisions of the Primary Lease with respect to defaults
and the rights and remedies of Landlord thereunder in the event thereof were set
forth at length herein. Additionally, should any default exist beyond the
applicable cure period, Sublessor shall have the right to declare all Rent due
under this Sublease immediately due and payable and upon receipt of Sublessor's
written demand therefore, Sublessee shall immediately pay to Sublessor the
entire Rent due for the balance of the term hereof. Sublessor shall promptly
give notice to
Sublessee of any notices of default relating to the Subleased Premises which may
be received by Sublessor from Landlord, but failure of Sublessor to give such
notice to Sublessee shall not diminish Sublessee's obligations hereunder. If
Sublessee shall default in the performance of any of Sublessee's obligations
under this Sublease or under the provisions of the Primary Lease, Sublessor,
without thereby waiving such default, may, at Sublessor's option, perform the
same for the account and at the expense of Sublessee. If Sublessor makes any
expenditures or incurs any obligations for the payment of money, including,
without limitation, reasonable counsel fees, in instituting, prosecuting or
defending any action or proceeding, by reason of any default of Sublessee under
this Sublease, such sums paid or obligations incurred shall be deemed to be
Extra Rent and shall be paid by Sublessee to Sublessor on demand. Failure of
Sublessor to declare any default immediately upon occurrence thereof, or delay
in taking any action in connection therewith, shall not waive such default, but
Sublessor shall have the right to declare any such default at any time and take
such action as might be lawful or authorized hereunder either in law or in
equity.
25.2 Sublessor's Default. In the event that Sublessor shall default (i) in
the performance of any of the terms, covenants and conditions on its part to be
performed under this Sublease, or (ii) in the performance of any of the terms,
covenants and conditions to be performed by Sublessor under the Primary Lease
(which are not required to be performed by Sublessee on behalf of Sublessor
thereunder), and the same are not cured within the time periods provided in the
Primary Lease or this Sublease, whichever is shorter, then the Sublessee shall
have the same rights and remedies with respect to such default as are given to
Sublessor as Tenant, under the Primary Lease with respect to defaults by the
Landlord thereunder, all with the same force and effect as are such provisions
of the Primary Lease with respect to such defaults and the rights and remedies
of the Sublessor, as Tenant, thereunder in the event thereof were set forth at
length herein. Subject to the prior written approval of Landlord at such time,
Sublessee shall have the right to cure any defaults by Sublessor under the
Primary Lease to the extent Sublessee, in its sole reasonable discretion, deems
it necessary to do so in order to protect and preserve Sublessee's interests in
the Subleased Premises. Sublessor shall promptly, on demand from Sublessee,
reimburse Sublessee for all amounts expended by Sublessee in effecting any such
cure on behalf of Sublessor, including, without limitation, reasonable
attorneys' fees and costs. Notwithstanding the foregoing, however, Sublessee
shall have no obligation to cure defaults by Sublessor under the Primary Lease.
26. SERVICES. Sublessee hereby acknowledges and agrees that the only services,
amenities and rights to which Sublessee is entitled under this Sublease are
those to which Sublessor is entitled under the Primary Lease (subject to all the
provisions, restrictions and conditions imposed in the Primary Lease). Sublessor
shall in no event be liable to Sublessee for Landlord's failure to provide any
such services, amenities and rights, nor shall any such failure be construed as
a breach hereof by Sublessor or an eviction of Sublessee or entitle Sublessee to
an abatement of any of the rentals due under this Sublease, except and only to
the extent that Sublessor receives an abatement under the Primary Lease
specifically with respect to the Sublease Premises.
27. EXERCISE OF RIGHTS AND REMEDIES UNDER PRIME LEASE. Sublessee shall not have
the right to exercise any of Sublessor's options, renewal options or elections
permitted or authorized under the Primary Lease, or to institute any action or
proceeding against Landlord for the enforcement of the Primary Lease. If
Landlord defaults in the performance of any of its obligations under the Primary
Lease, Sublessor shall have no liability whatsoever to Sublessee as a
consequence of
Landlord's failure or delay in performing its obligations under the Primary
Lease. Sublessee's obligations under this Sublease shall not be impaired nor
shall the performance thereof be excused because of any default of Landlord or
any failure or delay on Landlord's part in performing its obligations under the
Primary Lease, except and only to the extent that Sublessor's performance under
the Primary Lease is excused (as such performance pertains to the Subleased
Premises) because of any default of Landlord or any failure or delay on the part
of Landlord in performing its obligations under the Primary Lease.
28. CONSENTS DISCRETIONARY. Sublessor's consents to any proposed actions
requiring Sublessor's consent hereunder or pursuant to the Primary Lease shall
not be unreasonably withheld, but to the extent given, shall be subject to the
further consent of Landlord to the extent Landlord's consent is required
pursuant to the Primary Lease.
29. LIMITATION OF LIABILITY. Nothing contained in this Sublease is intended to
impose (nor shall it impose) any personal liability upon the employees,
officers, directors, partners, or agents of a party for any breach of this
Sublease by such party.
30. NOTICES. Any notice, demand or communication which, under the terms of this
Sublease or under any statute or municipal regulation (unless provided to the
contrary in such statute or regulation), which must or may be given by the
parties hereto shall be in writing and shall be deemed to have been duly given
on the date of delivery if delivered by facsimile or if personally to the party
to whom notice is to be given, or on the second business day following the day
of mailing, if mailed to the party to whom notice is to be given, by first class
mail, registered or certified, return receipt requested, postage prepaid, and
properly addressed to the party for whom intended at its address as set forth on
the signature page to this Sublease. Any party, however, may designate a new or
other address to which such notice, demand or communication shall thereafter be
given, made or mailed.
31. GENERAL TERMS. All terms defined in the Primary Lease and used herein but
not defined herein shall have the meanings set forth in the Primary Lease.
32. COUNTERPARTS. This Sublease may be executed by the parties hereto in
separate counterparts, each of which shall be deemed to be an original and all
of which shall constitute together but one and the same agreement.
33. BINDING EFFECT. This Sublease shall be binding upon the parties respective
successors and assigns. The parties shall have the right to assign their rights
and obligations hereunder to an affiliate of such party without the consent of
the other party, provided that absent the express written agreement of the
non-assigning party, no party to this agreement shall be released from its
obligations hereunder.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, this Agreement has been executed effective as of the
date set forth above.
SUBLESSOR:
XXXXXXX SYSTEMS LP
By: XXXXXXX MANAGEMENT LLC,
its general partner
By: ___________________________
Name: _________________________
Title: ________________________
Address:
______________________
______________________
______________________
Facsimile: ___________
SUBLESSEE:
XXXXX XXXX CONSTRUCTION COMPANY, LP
By: XXXXX XXXX HOLDING COMPANY, LLC,
its general partner
By: ___________________________
Name: _________________________
Title: ________________________
Address:
______________________
______________________
______________________
Facsimile: ___________
BY EXECUTION HEREUNDER, AS REQUIRED BY SECTION 12.1 OF THE PRIMARY LEASE,
LANDLORD HEREBY ACKNOWLEDGES AND CONSENTS TO THE SUBLEASE OF THE SUBLEASED
PREMISES BY SUBLESSOR TO SUBLESSEE PURSUANT TO THIS SUBLEASE AND REPRESENTS THAT
AS OF THE DATE HEREOF, THERE ARE NO UNCURED DEFAULTS BY SUBLESSOR UNDER THE
PRIMARY LEASE.
LANDLORD:
XXXXX COMMONWEALTH I, LTD.
By: ______________________________
Name: ____________________________
Title: ___________________________
Address:
__________________________
__________________________
__________________________
Facsimile: _______________
EXHIBIT A
PRIMARY LEASE
[ATTACHED]
EXHIBIT C
FORM OF GENERAL AGREEMENT OF INDEMNITY
(attached hereto)
CHUBB GROUP OF INSURANCE COMPANIES
[CHUBB LOGO]
15 Mountain View Road, X.X. Xxx 0000, Xxxxxx, Xxx Xxxxxx 00000-0000
GENERAL AGREEMENT OF INDEMNITY
WHEREAS, the undersigned (hereinafter individually and collectively called
"Indemnitor") desires FEDERAL INSURANCE COMPANY or any of its subsidiary or
affiliated insurers (hereinafter called "Company") to execute bonds including
undertakings and other like obligations (hereinafter referred to as bond or
bonds) on its behalf and also desires the execution of bonds on behalf of
individuals, partnerships, corporations, limited liability companies or any
other similarly unincorporated associations of members (hereinafter called
"Affiliates").
WHEREAS, from time to time the Indemnitor may be a participant in joint
ventures with others, and bonds will be required on behalf of the Indemnitor
along with the other participants in such joint ventures.
WHEREAS, Indemnitor is the successor-in-interest to X. XXXX ELECTRIC, L.P.
AND XXXXXXX SYSTEMS, L.P. (along with any other affiliate or related entity
whose assets have been or will be assigned to Indemnitor hereinafter
individually and collectively called "Seller") as the assignee of all bonded
contract obligations, which Indemnitor has expressly assumed without reservation
NOW, THEREFORE, in consideration of the Company executing said bond or
bonds, and the undersigned Indemnitor hereby requests the execution thereof, and
in consideration of the consent of Company to the assignment and assumption of
the bonded obligations formerly undertaken by the Seller, as well as the sum of
One Dollar paid to the Indemnitor by said Company, the receipt whereof is hereby
acknowledged, the Indemnitor, being benefited by the execution and delivery of
said bond or bonds, including, without limitation all Bonds previously issued
prior to the date of this Agreement for the Seller, the bonded obligations of
which have been expressly assumed without reservation by Indemnitor(s) and as to
which Indemnitor(s) have agreed, and do hereby agree, to assume full
responsibility for work in place as well as the prompt and proper performance
and completion of all such bonded obligations, including, without limitation
those bonded obligations listed on Exhibit A attached hereto, hereby agrees that
it will at all times jointly and severally indemnify and save harmless said
Company from and against any and all loss, cost, damage or expense, including
court costs and attorneys' fees, which it shall at any time incur by reason of
its execution and/or delivery of said bond or bonds or its payment of any claim
or liability thereunder and will place the said Company in funds to meet all its
liability under said bond or bonds promptly on request and before it may be
required to make any payment thereunder and that the voucher or other evidence
of payment by said Company of any such loss, cost, damage, expense, claim, or
liability shall be prima facie evidence of the fact and amount of the
Indemnitor's liability to said Company under this Agreement.
IT IS UNDERSTOOD AND AGREED that with respect to any bonds on behalf of
the Indemnitor participating in a joint venture that if specific application is
filed with the Company for such bonds the liability of the Indemnitor to the
Company with respect to such joint venture bonds shall be limited to the amount
expressly set forth in said application.
IT IS UNDERSTOOD AND AGREED that all of the terms, provisions, and
conditions of this Agreement shall be extended to and for the benefit not only
of the Company either as a direct writing company or as a co-surety or reinsurer
but also for the benefit of any surety or insurance company or companies with
which the Company may participate as a co-surety or reinsurer and also for the
benefit of any other company which may execute any bond or bonds at the request
of the Company on behalf of the Indemnitor .
IT IS UNDERSTOOD AND AGREED that this Agreement is in addition to all
other rights and agreements which Company may have or be a party to in
connection with Bonds previously issued for the benefit of Seller and that the
assumption of responsibility therefor by Indemnitors as herein provided shall
not constitute a waiver or release by Company of any rights Company may have to
seek and recover indemnity from third parties having liability in connection
with the issuance of such Bonds including, but not limited to, the obligations
and liabilities of Integrated Electrical Services, Inc., X. Xxxx Electric, L.P.
or their affiliates.
IT IS UNDERSTOOD AND AGREED that, notwithstanding anything herein to the
contrary, Indemnitor's agreements, covenants, and all obligations under this
General Agreement of Indemnity is limited to (1) the obligations assumed by
Indemnitor under the Asset Purchase Agreement by and among Integrated Electrical
Services, Inc., X. Xxxx Electric, L.P., Xxxxxxx Systems, L.P., Xxxxx Xxxx
Construction Company, L.P.., and Xxxxx X. Xxxx, and (2) Company's obligations
under the bonds listed on Exhibit A attached hereto.
IT IS FURTHER UNDERSTOOD AND AGREED that the Indemnitor, its heirs,
successors and assigns are jointly and severally bound by the foregoing
conditions of this Agreement.
IN WITNESS WHEREOF the Indemnitor has signed this instrument this, the
_____________ day of December, 2004.
WITNESS: XXXXX XXXX CONSTRUCTION, L.P.,
a Texas Limited Partnership
_______________________________ By: ______________________________________
Its: ________________________________
WITNESS: XXXXX X. XXXX, a Texas resident
_______________________________ __________________________________________
