EXHIBIT 10.3
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "AGREEMENT") is made and entered into
as of February 1, 2005 by and among INTEGRATED ELECTRICAL SERVICES, INC., a
Delaware corporation (the "PARENT"), XXXXXX XXXXXXXX ELECTRIC CO., INC., a
Delaware corporation (the "COMPANY"), XXXXXX XXXXXXXX ELECTRIC OF CHARLOTTE,
LLC, a limited liability company organized in the State of North Carolina (the
"BUYER"), and XXXXX XXXXXX, an individual and resident of the State of North
Carolina ("GUARANTOR")
WITNESSETH:
WHEREAS, the Parent owns, either directly or indirectly, all of the issued
and outstanding capital stock 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;
WHEREAS, Guarantor is the President and owner of the Buyer and has agreed
to personally guarantee to the Parent and the Company the Buyer's performance of
all representations, warranties, covenants, agreements and conditions set forth
herein;
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"):
1
(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;
(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;
(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 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 and Parent 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,
2
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, February 1, 2005 (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
$1,443,000 (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 60 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 only 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 with respect to pre-Closing
periods, 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 Company 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, (iii) workers compensation, general liability, auto insurance,
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 (iv) other amounts paid by the Company or by the
Parent on behalf of the Company with respect to periods prior to the Closing,
but for which invoices are received or accruals are made after the Closing Date.
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. An
illustrative example of this Cash Reconciliation calculation is attached and
incorporated as Exhibit C.
2.4 Purchase Price Allocation. As soon as practicable after the Closing
Date, the Company shall prepare IRS Form 8594 to report the allocation of the
Purchase Price among the
3
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. Such allocation shall be reasonably consistent with
the manner in which the Purchase Price was determined.
3. REPRESENTATIONS AND WARRANTIES.
3.1 Representations and Warranties of the Company and the Parent. The
Company and the Parent represent and warrant to the Buyer as follows:
(a) Organization, Authority and Qualification of the Company. The
Company is a corporation duly organized and validly existing under the
laws of the State of Delaware and the Company has full corporate power and
authority to own or lease its properties and to carry on its business in
such state. The Company has the full corporate power and authority to
execute, deliver and perform this Agreement, and this Agreement has been
duly and validly executed and delivered by the Company and constitutes the
valid and legally binding obligation of the Company, 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. The Company is not in default under or in
violation of its Articles of Incorporation or Bylaws. Neither Parent nor
Company are a party to any material agreement which would prohibit this
transaction.
(c) Title to Properties; Absence of Liens and Encumbrances. The
Company owns good and indefeasible title to the 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").
(d) No Other Violations or Breaches; Government Approval. The
execution and delivery of this Agreement and the other agreements and
instruments to be executed and delivered in connection herewith by the
Parent and the Company (together, the "SELLERS"), the fulfillment of and
compliance by them with the terms and conditions hereof and thereof and
the consummation by them of the transactions contemplated hereby and
thereby will not:
(i) Require action by the Sellers, or any filing by any of
them, with any Governmental Entity prior to the Closing except in
connection with the filing of UCC lien release documents;
(ii) Contravene, conflict with or violate any of the
provisions of the Articles of Incorporation or Bylaws (or the equivalent)
of the Sellers, or any resolutions adopted by the Board of Directors or
shareholders of the Sellers;
(iii) Result in the creation of any Encumbrance on any of the
Assets except for Permitted Encumbrances;
4
(iv) Conflict with, or constitute a breach or default under,
or give rise to any right of termination, cancellation or acceleration
under, any term or provision of any contract, agreement, lease, mortgage,
deed of trust, note, bond, loan agreement, indenture, other instrument
evidencing borrowed money to which the Parent is a party or by which its
assets are bound, or an event which with notice, lapse of time, or both,
would result in any such conflict, breach, default or right; or
(v) Violate any provision of any law, statute, rule or
administrative regulation or any judgment, order, injunction or decree of
any Governmental Entity applicable to or binding upon the Sellers.
3.2 Representations and Warranties of the Buyer. The Buyer and Guarantor,
jointly and severally, represent and warrant to the Parent and the Company as
follows:
(a) Organization, Authority and Qualification of the Buyer. The
Buyer is a limited liability company duly organized and validly existing
under the laws of the State of North Carolina and the Buyer has full
corporate power and authority to own or lease its properties and to carry
on its business in such state. The Buyer has the full corporate power and
authority 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.
(b) No Violation. The Buyer is not in default under or in violation
of its Articles of Organization or Regulations.
(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 Buyer, 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 the Guarantor acknowledge that the
Guarantor, through previous ownership and/or 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
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 Buyer and the Guarantor have not relied upon and will not rely
upon, any express or implied representations, warranties,
5
guaranties, promises or statements pertaining to the Business or Assets except
as specifically provided in this Section 3. The Buyer and the 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 their right to rely thereon, the Buyer and the
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 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, 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 and
deliver to the Parent on or before February 12, 2005, on behalf of the Company,
all regularly prepared 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.
As soon as is practicable after the Closing Date, and in no event more than ten
days thereafter, the Buyer shall mail to its customers and vendors a notice
6
of the sale in the form provided by the Parent, with such changes thereto as
Buyer and Parent shall agree.
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 submit to Parent for execution and filing on a timely basis 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 and for the
partial year in 2005 ending on the Closing Date. 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 (including, without
limitation income taxes withheld on employee wages) 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 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 "Xxxxxx Xxxxxxxx" and "Xxxxxx Xxxxxxxx
Electric" shall become the exclusive property of the Buyer following the Closing
and shall not be used by the Company, Parent or their respective affiliates;
provided that Parent will be given a reasonable period of time (not to exceed 90
days) to change the Company's name 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.
7
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 B, 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.
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
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 and the Buyer shall be of no further force and effect,
and no claim for indemnification by the Buyer, the Company or the Parent
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.
8
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 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 representation or
warranty of the Buyer or Guarantor contained in this Agreement, or in any
schedules delivered to the Company or the Parent by or on behalf of the
Buyer or Guarantor pursuant to this Agreement; (ii) or the breach of any
covenant or agreement of the Buyer or 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.
9
(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
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
10
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 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.
11
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 the Closing Date. 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, unless such conditions or requirements applied to Transferred
Employees prior to the Closing, 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. 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.
12
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 - including, without limitation,
income taxes withheld on employee wages - 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 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.
13
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 Noncompetition and Other Employment Agreements. All non-competition
and other employment agreements now existing between Guarantor and the Parent
shall be terminated at the Closing and each party thereto shall release the
other party 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 or Guarantor:
Xxxxxx Xxxxxxxx Electric of Charlotte, LLC
0000 Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
With a copy to:
J. Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx & Xxxx, P.A.
000 X. Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
or such other address as any party hereto shall specify pursuant to this Section
8.1 from time to time.
14
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.
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.
15
8.9 Disclosure of Agreement Terms. Neither Buyer nor the Guarantor shall
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 and the Guarantor shall be permitted to
make such disclosures to their accountants, lawyers, financial institutions,
lending sources, senior 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.
[Remainder of page intentionally left blank]
16
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
--------------------------------------
Xxxxxxx X. Xxxxx
Chief Executive Officer
COMPANY:
XXXXXX XXXXXXXX ELECTRIC CO., INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------------------------
Xxxx X. Xxxxxxx
Vice President
BUYER:
XXXXXX XXXXXXXX ELECTRIC OF CHARLOTTE, LLC
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------
Xxxxx X. Xxxxxx, Manager
GUARANTOR:
/s/ Xxxxx X. Xxxxxx
--------------------------------------
Xxxxx X. Xxxxxx, Manager
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 February 2005, by and among INTEGRATED
ELECTRICAL SERVICES, INC., a Delaware corporation (the "PARENT"), XXXXXX
XXXXXXXX ELECTRIC CO., INC., a Delaware corporation (the "COMPANY") and XXXXXX
XXXXXXXX ELECTRIC OF CHARLOTTE, LLC, a limited liability company organized in
the State of North Carolina (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, the Company, and Xxxxx X. Xxxxxx, individual, 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:
XXXXXX XXXXXXXX ELECTRIC CO.,
INC.
By:_______________________________________
Name:_____________________________________
Title:____________________________________
BUYER:
XXXXXX XXXXXXXX ELECTRIC OF CHARLOTTE, LLC
By:_______________________________________
Name:_____________________________________
Title:____________________________________
EXHIBIT B
FORM OF GENERAL AGREEMENT OF INDEMNITY
(see attached)
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 XXXXXX XXXXXXXX
ELECTRIC CO., INC., A DELAWARE CORPORATION (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., Delco Electric, Inc. 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 (the "Assumed Obligations") under the Asset Purchase Agreement
("APA") by and among Integrated Electrical Services, Inc. ("IES"), Xxxxxx
Xxxxxxxx Electric Co., Inc., Xxxxxx Xxxxxxxx Electric of Charlotte, LLC, and
Xxxxx Xxxxxx and (2) Company's obligations under the bonds listed on Exhibit A
attached hereto. Furthermore, Indemnitor has acknowledged and agreed that
Indemnitor's obligation to perform or otherwise discharge the Assumed
Obligations is secured by certain assets acquired by Indemnitor under the APA
(the "Collateral"), said Collateral acquired subject to that certain
Underwriting, Continuing Indemnity, and Security Agreement dated as of January
14, 2005, executed by and among Company, IES, and certain IES affiliates,
including Xxxxxx Xxxxxxxx Electric Co., Inc.
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 __________, 2005.
WITNESS: XXXXXX XXXXXXXX ELECTRIC OF CHARLOTTE, LLC
____________________________ By:_______________________________________
Its:______________________________________
WITNESS: XXXXX XXXXXX
____________________________ __________________________________________
ACKNOWLEDGMENT OF LIMITED LIABILITY COMPANY
STATE OF _____________________
COUNTY OF ___________________
On this ________ day of ______________________, 2005, before me personally
came ________________________ to me known, who, being by me duly sworn, did
depose and say that he/she resides in the State of _______________; and that
he/she is the __________________ of XXXXXX XXXXXXXX ELECTRIC OF CHARLOTTE, LLC,
the limited liability company described in and which executed the foregoing
instrument; that he/she executed the foregoing instrument by order and authority
of the partners (limited and general) and/or members of said XXXXXX XXXXXXXX
ELECTRIC OF CHARLOTTE, LLC; and that he/she signed his/her name thereto by like
order and authority.
(SEAL) _______________________________________
NOTARY PUBLIC
My commission expires:
_________________________________
INDIVIDUAL ACKNOWLEDGMENT
STATE OF _____________________
COUNTY OF ___________________
On this ________ day of ______________________, 2005, before me personally
came XXXXX XXXXXX, to me known, who, being by me duly sworn, did depose and say
that he resides in the State of North Carolina, and that he executed the
foregoing instrument for the purposes therein contained.
(SEAL) _______________________________________
NOTARY PUBLIC
My commission expires:
_________________________________
EXHIBIT C
CASH RECONCILIATION EXAMPLE
(see attached)
CASH TRUE UP - FOR ILLUSTRATION PURPOSES ONLY
JANUARY 13, 2005
Item # Description Department Activity Location Notes
------------------------------------------------------------------------------------------------------------------------------------
INTERCOMPANY BALANCE 9/30/2004 7,219,329.56
INTERCOMPANY BALANCE 1/4/2005 7,107,772.46
INTERCOMPANY CHANGE FROM 9/30/04
TO 1/4/05 (111,557.10) Beginning point for cash
true up. Owed (To)/From IES
1 Disbursements generated at this
Entity Finance Subsidiary
Note: Outstanding Checks (has not
cleared as of Jan 4th) (52.00) Checks to clear after Jan 4th.
2 Cash Receipts (has not cleared bank
as of Jan 4th) Finance Home Office -- On cash sheet
3 Banking Fees Finance Home Office -- None for this Entity
4 Workers Compensation Insurance Finance Home Office (1,520.14) Dec 1-Dec 6 estimate. Based on
Nov template
5 General Liability Insurance Finance Home Office (221.50) Dec 1-Dec 6 estimate. Based on
Nov template
6 Umbrella Insurance Finance Home Office (88.54) Dec 1-Dec 6 estimate. Based on
Nov template
7 Property Finance Home Office (111.49) Dec 1-Dec 6 estimate. Based on
Nov template
8 Health Insurance Premiums HR Home Office 9,804.25 Prorated amount for Dec 7-
Dec 31 being credited back to
IES in Feb 05 by Blue Cross.
IES had charged on Cash Sheet
full amount for Dec Health
Insurance to this Entity.
9 Dental Insurance Premiums HR Home Office -- None for this Entity
10 401K Contributions HR Home Office & -- On Cash Sheet
Subsidiary
11 Employee Stock Purchase Plan HR Home Office (297.61) Correct ESPP balance for 2004
for period 1 (as per Xxxxxx
Xxxx'x reconciliation)
12 Executive Savings Plan HR Home Office -- On Cash Sheet
13 Executive Savings Plan-
Withdrawals HR Home Office -- None for this Entity
14 Flex Acct Fees HR Home Office -- None for this Entity
15 MCI Frame IT Home Office (468.93) MCI Frame xxxx for period
Nov 15-Dec 6th not yet paid by
IES. Billing cycle from
15th-14th
16 Bond Premiums Operations Home Office -- None for this Entity
17 Mind Wireless Purchasing Home Office -- None for this entity
18 Nextel Charges Purchasing Home Office (1,155.76) Nextel Xxxx for period Nov 5-
Dec 4th not yet paid by IES.
19 Vehicle Insurance Premiums Purchasing Home Office (610.21) Dec 1-Dec 6 estimate. Based on
Nov template
20 Insurance Deductible Purchasing Home Office -- Could not gather data as of
1/4/2005
21 PHH Lease Payment Purchasing Home Office 7,987.30 On Cash Sheet (Trans #439598).
Paid on Dec 1 for the month of
Dec. XX Xxxxxxxx will be
crediting IES the full amount
on the Jan invoice.
22 Corvel WC Safety Home Office (2,500.00) Auto liability claim in
process. 2,500 is this
Entity's deductible. Claim
# 2A934962 Claimant:
Xxxxxxx Xxxxx
------------
TOTAL OWED (TO)/FROM IES (100,791.74)
