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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
DATED AS OF
APRIL 29, 1999
AMONG
INTEGRATED ELECTRICAL SERVICES, INC.,
XXXXXX ACQUISITION CORPORATION,
XXXXXX ELECTRICAL CONTRACTORS, INC.
AND
XXXXXX XXXXXX
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TABLE OF CONTENTS
Page
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ARTICLE I -- THE MERGER.........................................................................................1
Section 1.1. The Merger................................................................................1
Section 1.2. Conversion of Shares......................................................................2
Section 1.3. Surrender and Payment.....................................................................2
Section 1.4. Withholding Rights........................................................................2
Section 1.5. Lost Certificates.........................................................................2
Section 1.6. Other Documents to be Delivered Immediately Prior to the Effective Time...................3
Section 1.7. Conditions to the Obligations of the Company Stockholder..................................4
Section 1.8. Conditions to the Obligations of IES......................................................4
Section 1.9. Termination...............................................................................4
ARTICLE II -- THE SURVIVING CORPORATION.........................................................................5
Section 2.1. Certificate of Incorporation..............................................................5
Section 2.2. Bylaws....................................................................................5
Section 2.3. Directors and Officers....................................................................5
ARTICLE III -- REPRESENTATIONS AND WARRANTIES OF THE COMPANY STOCKHOLDER........................................5
Section 3.1. Organization and Qualification............................................................5
Section 3.2. Capitalization; Ownership.................................................................5
Section 3.3. Authorization.............................................................................6
Section 3.4. Consents and Approvals; No Violation......................................................6
Section 3.5. Affiliate Relationships...................................................................7
Section 3.6. Financial Statements......................................................................7
Section 3.7. Undisclosed Liabilities...................................................................7
Section 3.8. Accounts and Notes Receivables............................................................7
Section 3.9. Assets....................................................................................8
Section 3.10. Material Contracts, Commitments and Customers............................................8
Section 3.11. Operating Authority......................................................................9
Section 3.12. Bank Account Information.................................................................9
Section 3.13. Conduct of Business Since Company Unaudited Balance Sheet Date...........................9
Section 3.14. Litigation; Orders.......................................................................9
Section 3.15. Labor Matters...........................................................................10
Section 3.16. Compliance with Laws....................................................................10
Section 3.17. Insurance...............................................................................10
Section 3.18. Environmental Matters...................................................................10
Section 3.19. Taxes...................................................................................11
Section 3.20. Employee Benefit Plans..................................................................13
Section 3.21. Brokerage Fees and Commissions..........................................................14
Section 3.22. Tax Treatment...........................................................................14
Section 3.23. Section 368(a)(2)(D) Representations....................................................14
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ARTICLE IV -- REPRESENTATIONS AND WARRANTIES...................................................................16
Section 4.1. Organization and Qualification...........................................................16
Section 4.2. Capitalization...........................................................................16
Section 4.3. Authorization............................................................................17
Section 4.4. Consents and Approval; No Violation......................................................17
Section 4.5. SEC Filings..............................................................................17
Section 4.6. Tax Treatment............................................................................18
Section 4.7. Section 368(a)(2)(D) Representations.....................................................18
ARTICLE V -- ADDITIONAL COVENANTS AND AGREEMENTS...............................................................19
Section 5.1. Reasonable Best Efforts..................................................................19
Section 5.2. Certain Filings..........................................................................19
Section 5.3. Public Announcements.....................................................................19
Section 5.4. Further Assurances.......................................................................19
Section 5.5. Notices of Certain Events................................................................19
Section 5.6. Release from Guarantees..................................................................20
Section 5.7. Future Cooperation.......................................................................20
Section 5.8. Expenses.................................................................................20
Section 5.9. Repayment of Related Party Indebtedness..................................................20
Section 5.10. FIRPTA Certificate......................................................................21
Section 5.11. Preparation and Filing of Tax Returns...................................................21
Section 5.12. Tax-Free Reorganization.................................................................21
Section 5.13. Conduct of Business Pending Closing.....................................................21
Section 5.14. Notification of Certain Matters.........................................................23
ARTICLE VI -- INDEMNIFICATION..................................................................................24
Section 6.1. Indemnification by the Company Stockholder...............................................24
Section 6.2. Indemnification Related to Tax Liabilities...............................................25
Section 6.3. Indemnification by IES...................................................................25
Section 6.4. Indemnification Proceedings..............................................................26
Section 6.5. Other Remedies...........................................................................26
Section 6.6. Indemnification if Negligence of Indemnitee..............................................26
Section 6.7. No Third-Party Beneficiaries.............................................................27
Section 6.8. Limitation Upon Indemnity................................................................27
ARTICLE VII -- NONCOMPETITION COVENANTS........................................................................27
Section 7.1. Prohibited Activities....................................................................27
Section 7.2. Equitable Relief.........................................................................28
Section 7.3. Reasonable Restraint.....................................................................28
Section 7.4. Severability; Reformation................................................................28
Section 7.5. Material and Independent Covenants.......................................................28
Section 7.6. Materiality..............................................................................29
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ARTICLE VIII -- APPLICABLE SECURITIES LAWS/TRANSFER RESTRICTIONS................................................29
Section 8.1. Company Stockholder's Representations and Warranties Concerning Securities...............29
Section 8.2. Transfer Restrictions....................................................................29
ARTICLE IX -- NONDISCLOSURE OF CONFIDENTIAL INFORMATION........................................................30
Section 9.1. General..................................................................................30
Section 9.2. Equitable Relief.........................................................................30
Section 9.3. Non-Public Information...................................................................30
Section 9.4. Survival.................................................................................30
ARTICLE X -- MISCELLANEOUS.....................................................................................31
Section 10.1. Governing Law...........................................................................31
Section 10.2. Entire Agreement........................................................................31
Section 10.3. Expenses and Fees.......................................................................31
Section 10.4. Notices.................................................................................31
Section 10.5. Successors and Assigns..................................................................31
Section 10.6. Survival of Representations and Warranties..............................................32
Section 10.7. Headings; Definitions...................................................................32
Section 10.8. Amendments and Waivers..................................................................32
Section 10.9. Construction of Certain Provisions......................................................32
Section 10.10. Severability...........................................................................32
Section 10.11. Jurisdiction...........................................................................32
Section 10.12. Specific Performance...................................................................33
Section 10.13. Counterparts; Effectiveness............................................................33
Section 10.14. Mutual Indemnification Against Claims of Brokers.......................................33
Section 10.15. Definitions and Usage..................................................................33
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EXHIBITS AND SCHEDULES
Exhibit A Form of Employment Agreement
Exhibit B Form of Opinion of Counsel to Company Stockholder
Exhibit C Form of Certificate of Secretary of the Company
Exhibit D Form of Company Stockholder Release
Exhibit E Form of Company Director Resignation
Exhibit F Form of Company Affiliate Letter
Exhibit G Form of Company Stockholder Receipt
Exhibit H Form of Cross-Receipt
Exhibit I Form of Opinion of Xxxx X. Xxxxxxxx
Schedule 2.3 Officers of Surviving Corporation
Schedule 3.1 Organization and Qualification of Company and Subsidiaries
Schedule 3.2(a) Ownership of Company Shares and Delivery Instructions
Schedule 3.2(b) Subsidiary Corporate History, Subsidiary Stock, Other Securities
and Non-Corporate Entity Participation
Schedule 3.4 Company Consents and Approvals; No Violation
Schedule 3.5 Affiliate Relationships
Schedule 3.6 Company Financial Statements
Schedule 3.7 Company Undisclosed Liabilities
Schedule 3.8 Company Accounts and Notes Receivables
Schedule 3.9 Company Assets
Schedule 3.10 Material Contracts, Commitments and Customers
Schedule 3.11 Company Operating Authority
Schedule 3.12 Company Bank Account Information
Schedule 3.13 Company Conduct of Business
Schedule 3.14 Company Litigation; Orders
Schedule 3.15 Company Labor Agreements
Schedule 3.17 Company Insurance
Schedule 3.18 Company Disposal Sites
Schedule 3.19 Company Taxes
Schedule 3.20 Company Employee Benefit Plans
Schedule 3.21 Company Brokerage Fees and Commissions
Schedule 5.6 Company Stockholder Guarantees
Schedule 5.9 Repayment of Advances, Receivables and Loans
Schedule 5.14 Conduct of Business
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER ("Agreement") dated as of April 29, 1999
among Integrated Electrical Services, Inc., a Delaware corporation ("IES"),
Xxxxxx Acquisition Corporation, a Delaware corporation and a wholly owned
subsidiary of IES ("Acquisition"), Xxxxxx Electrical Contractors, Inc., a
Georgia corporation ("Company"), and Xxxxxx Xxxxxx, who is the sole stockholder
of the Company (the "Company Stockholder").
RECITALS:
WHEREAS, the Boards of Directors of IES and the Company have determined
that the combination of IES and the Company is in the best interests of the
stockholders of IES and the Company, respectively;
WHEREAS, the Company Stockholder desires to enter into an exchange with
IES of all of the issued and outstanding shares of capital stock of the Company,
free and clear of all liens, and the Company Stockholder agrees to be bound by a
covenant not to compete;
WHEREAS, IES desires to acquire such shares of capital stock of the
Company as more fully set forth herein and enforce the covenant not to compete;
WHEREAS, IES, the Company and the Company Stockholder intends the
combination of IES and the Company to qualify as a tax-free reorganization under
the provisions of Section 368 of the Internal Revenue Code of 1986, as amended
(the "Code"), and the regulations thereunder;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, the parties hereto agree as follows:
ARTICLE I
THE MERGER
THE MERGER. (a) At the closing of the transactions contemplated by this
Agreement (the "Closing") and after delivery of the documents listed in Section
1.6, at the Effective Time (as hereinafter defined) the Company shall be merged
(the "Merger") with and into Acquisition in accordance with the General
Corporation Law of the State of Delaware ("Delaware Law") and the Georgia
Business Corporation Code of the State of Georgia ("Georgia Law"), whereupon the
separate existence of the Company shall cease, and Acquisition shall be the
surviving corporation (the "Surviving Corporation").
(b) Immediately following the delivery of the documents listed in
Section 1.6, the Company and Acquisition will file a certificate of merger (the
"Certificates of Merger") with the Delaware Secretary of State and the Georgia
Secretary of State and make all other filings or recordings required by Delaware
Law and Georgia Law in connection with the Merger. The Merger shall become
effective at such time (the "Effective Time") as the Certificates of Merger are
duly filed with the Delaware Secretary of State and the Georgia Secretary of
State (or at such later time as may be agreed in writing by the parties hereto
and specified in the Certificates of Merger).
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(c) From and after the Effective Time, the Surviving Corporation shall
possess all the rights, assets, powers, privileges, and franchises and be
subject to all of the obligations, liabilities, restrictions, and disabilities
of the Company and Acquisition, all as provided under Delaware Law.
(d) The Closing of the transactions shall take place at the offices of
IES in Houston, Texas, at 9:00 a.m., on April 29, 1999.
(e) The Certificates of Merger shall include a provision for changing
the name of the Surviving Corporation to Xxxxxx Electrical Contractors, Inc., if
such name is available and can be obtained from the respective states.
CONVERSION OF SHARES. At the Effective Time:
(a) the shares of common stock Class "A", $100.00 par value, and the
shares of common stock Class "B", no par value, of the Company ("Company Common
Stock") outstanding immediately prior to the Effective Time shall be converted
into the right to receive, without interest, an aggregate of 589,060 shares of
common stock, $0.01 par value, of IES ("IES Common Stock") and cash
consideration of $10,500,000 (collectively, the "Merger Consideration"); and
(b) each share of common stock of Acquisition outstanding immediately
prior to the Effective Time shall be converted into and become one share of
common stock of the Surviving Corporation with the same rights, powers, and
privileges as the shares so converted and shall constitute the only outstanding
shares of capital stock of the Surviving Corporation.
SURRENDER AND PAYMENT. At the Effective Time, the Company Stockholder will
deliver to IES the certificates listed on Schedule 3.2(a) (the "Certificates")
representing all of the outstanding shares of Company Common Stock, and IES will
deliver, in exchange therefor, the Merger Consideration to the Company
Stockholder in accordance with the written instructions provided in Schedule
3.2(a). The Certificates will be duly endorsed (or accompanied by a duly
executed stock power), with the signature of the Company Stockholder, if not
present at the Closing of the Merger, guaranteed by a commercial bank or by a
member firm of the New York Stock Exchange.
WITHHOLDING RIGHTS. Each of the Surviving Corporation and IES shall be entitled
to deduct and withhold from the consideration otherwise payable to any Person
(as defined in Section 10.15) pursuant to this Article I such amounts as it is
required to deduct and withhold with respect to the making of such payment under
any provision of federal, state, local, or foreign tax law. To the extent that
amounts are so withheld by the Surviving Corporation or IES, as the case may be,
such withheld amounts shall be treated for all purposes of this Agreement as
having been paid to the holder of the shares of Company Common Stock in respect
of which such deduction and withholding was made by the Surviving Corporation or
IES, as the case may be.
SECTION 1.5. LOST CERTIFICATES. If any Certificate shall have been
lost, stolen, or destroyed, upon the making of an affidavit of that fact by the
Person claiming such Certificate to be lost, stolen, or destroyed and, if
required by the Surviving Corporation, the posting by such Person of a bond, in
such reasonable amount as the Surviving Corporation may direct, as indemnity
against any claim that may be made against it with respect to such Certificate,
IES will issue in exchange for such lost, stolen, or destroyed Certificate the
Merger Consideration to be paid in respect of the shares of Company Common Stock
represented by such Certificate as contemplated by this Article I.
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SECTION 1.6. OTHER DOCUMENTS TO BE DELIVERED IMMEDIATELY PRIOR TO THE
EFFECTIVE TIME.
(a) At the Closing and immediately prior to the Effective Time, the
Company and the Company Stockholder will deliver to IES:
(i) Employment Agreement (the "Employment Agreement"), in
the form attached hereto as EXHIBIT A, for the following employee of
the Company: Xxxxxx Xxxxxx;
(ii) an opinion of counsel to the Company Stockholder in
the form attached hereto as EXHIBIT B;
(iii) a Certificate of the Secretary of the Company in the
form attached hereto as EXHIBIT C;
(iv) a release executed by the Company Stockholder in the
form attached hereto as EXHIBIT D;
(v) the resignation of the director of the Company in the
form attached hereto as EXHIBIT E;
(vi) the minute book and corporate seal of the Company;
(vii) letters from the affiliates of the Company in the
form attached hereto as EXHIBIT F;
(viii) receipts executed by the Company Stockholder in the
form attached hereto as EXHIBIT G; and
(ix) a cross-receipt executed by the Company Stockholder
in the form attached hereto as EXHIBIT H, which shall be delivered
immediately following the Effective Time.
(b) At the Closing and immediately prior to the Effective Time, IES
will deliver to the Company Stockholder:
(i) the Employment Agreement executed by a duly
authorized representative of IES on behalf of the Surviving Corporation
for the employee listed in Section 1.6(a)(i) above;
(ii) an opinion of Xxxx X. Xxxxxxxx, Esq., Senior Vice
President, General Counsel and Secretary of IES in the form attached
hereto as EXHIBIT I; and
(iii) a cross-receipt executed by IES in the form attached
hereto as EXHIBIT H, which shall be delivered immediately following the
Effective Time.
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SECTION 1.7. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY STOCKHOLDER.
The obligations of the Company Stockholder to consummate the Merger are subject
to the fulfillment, at or before the Closing, of all of the following
conditions, any one or more of which may be waived by the Company Stockholder:
(a) The representations and warranties of IES contained in this
Agreement shall be true as of the Closing.
(b) All of the obligations of IES to be performed at or before the
Closing pursuant to the terms of this Agreement shall have been duly performed.
(c) The documents necessary to consummate the Merger shall have been
filed with the Secretary of State of Delaware and the Secretary of State of
Georgia.
SECTION 1.8. CONDITIONS TO THE OBLIGATIONS OF IES. The obligations of
IES to consummate the Merger are subject to the fulfillment, at or before the
Closing of all of the following conditions, any one or more of which may be
waived by IES:
(a) The representations and warranties of the Company Stockholder
contained in this Agreement shall be true as of the Closing, subject to changes
in the Schedules that have been approved in writing by IES.
(b) All of the obligations of the Company and the Company Stockholder
to be performed at or before the Closing pursuant to the terms of this Agreement
shall have been duly performed, including, without limitation, those set forth
in Article I hereof.
(c) The documents necessary to consummate the Merger shall have been
filed with the Secretary of State of Delaware and the Secretary or State of
Georgia.
SECTION 1.9. TERMINATION. (a) This Agreement may be terminated at any
time prior to the Closing solely:
(i) by mutual consent of IES and the Company Stockholder;
(ii) by the Company Stockholder, on the one hand, or by
IES, on the other hand, if a material breach or default shall be made
by the other party in the observance or in the due and timely
performance of any of the covenants or agreements contained herein, and
the curing or waiver of such default shall not have been made on or
before the Closing.
(b) The termination of this Agreement will in no way limit any
obligation or inability of any party based on or arising from a breach or
default by such party with respect to any of its representations, warranties,
covenants or agreements contained in this Agreement including, but not limited
to, legal costs and out-of-pocket expenses.
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ARTICLE II
The Surviving Corporation
SECTION 2.1. CERTIFICATE OF INCORPORATION. The certificate of
incorporation of Acquisition in effect at the Effective Time shall be the
certificate of incorporation of the Surviving Corporation until amended in
accordance with applicable law.
SECTION 2.2. BYLAWS. The bylaws of Acquisition in effect at the
Effective Time shall be the bylaws of the Surviving Corporation until amended in
accordance with applicable law.
SECTION 2.3. DIRECTORS AND OFFICERS. From and after the Effective Time,
until successors are duly elected or appointed and qualified in accordance with
applicable law, (i) the director of Acquisition at the Effective Time shall be
the sole director of the Surviving Corporation and (ii) the officers of the
Surviving Corporation shall be as set forth on Schedule 2.3 hereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY STOCKHOLDER
The Company Stockholder represents and warrants to IES as follows
upon execution of this Agreement and as of the Effective Time:
SECTION 3.1. ORGANIZATION AND QUALIFICATION. The Company is a
corporation duly organized, validly existing, and in good standing under the
laws of the state of its incorporation and has the requisite corporate power to
carry on its business as it is now being conducted. The Company is duly
qualified to conduct business as a foreign corporation in every state of the
United States in which its ownership or lease of property or the conduct of its
business and operations makes such qualification necessary, except for such
states in which the Company's failure to be so qualified is not reasonably
expected to have, individually or in the aggregate, a Company Material Adverse
Effect (as defined in Section 10.15). Schedule 3.1 contains a list of all
jurisdictions in which the Company is authorized or qualified to do business.
The Company has heretofore delivered to IES true and complete copies of the
articles of incorporation and bylaws of the Company in each instance including
any amendments thereto, as currently in effect.
SECTION 3.2. CAPITALIZATION; OWNERSHIP. (a) The authorized capital
stock of the Company consists of 500 shares of Class "A" common stock and 1000
shares of Class "B"common stock, of which 250 shares of Class "A" common stock
and 298 shares of Class "B" common stock are issued and outstanding (the
"Company Shares"). The Company Shares are all of the issued and outstanding
shares of capital stock of the Company and have been duly authorized and validly
issued and are fully paid and nonassessable and free of preemptive rights. There
are not, as of the date hereof, any outstanding or authorized subscriptions,
options, warrants, calls, rights, commitments, or any other agreements of any
character (any of the foregoing, a "Commitment") obligating the Company to issue
any additional shares of capital stock of the Company, or any other securities
convertible into or evidencing the right to subscribe for any shares of capital
stock of the Company. The Company Stockholder owns the number of shares of
Company Common Stock set forth on Schedule 3.2(a) attached hereto, free and
clear of all Liens (as defined in Section 10.15).
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The Company Stockholder has full legal right, power and authority to exchange,
assign and transfer or cause to be exchanged, assigned or transferred his shares
of Company Common Stock. The delivery to IES of the Company Shares pursuant to
the terms of this Agreement will transfer valid title thereto, free and clear of
all Liens. The Company Stockholder does not or will not have appraisal or
similar rights as a result of the consummation of the transactions contemplated
by this Agreement.
(b) The Company has no subsidiaries.
SECTION 3.3. AUTHORIZATION. The Company has the requisite corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated by this Agreement. The Company Stockholder and the
Board of Directors of the Company have by unanimous written consent (a)
determined that participating in the Merger is in the best interests of the
Company and its stockholders and (b) approved this Agreement and the Merger. No
other corporate proceedings on the part of the Company or the Company
Stockholder are necessary to authorize the execution and delivery of this
Agreement or the consummation by the Company and the Company Stockholder of the
transactions contemplated hereby. This Agreement has been duly authorized,
executed, and delivered by the Company and the Company Stockholder and
constitutes the valid and binding obligation of the Company and the Company
Stockholder, enforceable against the Company and the Company Stockholder in
accordance with its terms.
SECTION 3.4. CONSENTS AND APPROVALS; NO VIOLATION. Neither the
execution and delivery of this Agreement by the Company or the Company
Stockholder, nor the consummation by the Company or the Company Stockholder of
the transactions contemplated by this Agreement, will: (a) require any consent,
approval, authorization, or permit of, or filing with or notification to, any
Governmental Authority (as defined in Section 10.15), except (i) the filing of
the Certificates of Merger in accordance with Delaware Law and Georgia Law, (ii)
any regulatory approvals or routine governmental consents normally acquired
after the consummation of transactions such as transactions of the nature
contemplated by this Agreement, which consents and approvals are listed on
Schedule 3.4,or or (iii) where the failure to obtain such consent, approval,
authorization, or permit, or to make such filing or notification, is not
reasonably expected to have, individually or in the aggregate, a Company
Material Adverse Effect or prevent or delay, in any material respect, the
consummation of the transactions contemplated by this Agreement; (b) result in a
default (or give rise to any right of termination, cancellation, or
acceleration) under any of the terms, conditions, or provisions of any contract,
commitment or similar agreement to which the Company is a party, except (i) as
set forth on Schedule 3.4 or (ii) for such defaults (or rights of termination,
cancellation, or acceleration) as to which requisite waivers or consents have
been obtained or which are not reasonably expected to have, individually or in
the aggregate, a Company Material Adverse Effect or prevent or delay, in any
material respect, the consummation of the transactions contemplated by this
Agreement; or (c) assuming compliance with the matters referred to in Section
3.4(a), violate any order, writ, injunction, decree, statute, rule, or
regulation applicable to the Company or any of their assets, except for
violations which are not reasonably expected to have, individually or in the
aggregate, a Company Material Adverse Effect or prevent or delay, in any
material respect, the consummation of the transactions contemplated by this
Agreement. The Company is not, and the consummation of the transactions
contemplated by this Agreement will not result, in violation of its Articles of
Incorporation or Bylaws.
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SECTION 3.5. AFFILIATE RELATIONSHIPS. Except as set forth on Schedule
3.5, neither the Company Stockholder nor any affiliate of the Company
Stockholder, and no director, officer, employee or agent of or consultant to the
Company, owns, directly or indirectly, in whole or in part, any property, assets
or right, tangible or intangible, which is associated with any property, asset
or right owned by the Company or which the Company is operating or using or the
use of which is necessary for its business. Also included in Schedule 3.5 is
disclosure of any relationships which the Company Stockholder has, or any
director, officer, employee, or agent of or consultant to the Company has, with
the Company or any other corporation, partnership, firm, association or business
organization, entity or enterprise which is a competitor, potential competitor,
supplier or customer of the Company. The Persons named on Schedule 3.5 are the
only Persons who may be deemed affiliates of the Company under Rule 145 of the
Securities Act of 1933, as amended (the "1933 Act").
SECTION 3.6. FINANCIAL STATEMENTS. Attached as Schedule 3.6 are (a) the
audited consolidated balance sheet, statement of income and statement of cash
flows of the Company as of and for the years ended December 31, 1996 and 1997
and the audited consolidated balance sheet, statement of income and statement of
cash flows of the Company as of and for the year ended December 31, 1998
(collectively, the "Company Financial Statements"). The Company Financial
Statements present fairly the consolidated financial position, results of
operations, and changes in financial position of the Company as of the
respective dates or for the respective periods to which they apply in accordance
with United States generally accepted accounting principles, consistently
applied ("GAAP").
SECTION 3.7. UNDISCLOSED LIABILITIES. Schedule 3.7 sets forth an
accurate list as of the Company Audited Balance Sheet Date (as defined below) of
(i) all liabilities of the Company which are reflected in the balance sheet
contained in the Company Financial Statements and (ii) any liabilities of any
kind of the Company which are not reflected in the balance sheet included in the
Company Financial Statements. Except as set forth on Schedule 3.7 or as
reflected, reserved against, or otherwise disclosed in the Company Financial
Statements, the Company has not, at the date of the last balance sheet included
in the Company Financial Statements (the "Company Audited Balance Sheet Date")
and do not have, at the date hereof, any liabilities or obligations, whether
accrued, contingent, absolute, determined, determinable or otherwise, that may
have, individually or in the aggregate, a Company Material Adverse Effect.
SECTION 3.8. ACCOUNTS AND NOTES RECEIVABLES. Schedule 3.8 sets forth an
accurate list as of the Company Audited Balance Sheet Date of the accounts and
notes receivable of the Company, including receivables from and advances to
employees of the Company and the Company Stockholder. Included in Schedule 3.8
is an aging of all accounts and notes receivable showing amounts due in 30-day
aging categories. The trade and other accounts receivable of the Company which
are classified as current assets on the balance sheet as of the Company Audited
Balance Sheet Date are bona fide receivables, were acquired in the ordinary
course of business, are stated in accordance with GAAP and, subject to the
reserve for doubtful accounts, need not be written-off as uncollectible. Except
to the extent reflected on Schedule 3.8, such accounts and notes are collectible
in the amounts shown on Schedule 3.8.
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SECTION 3.9. ASSETS. Schedule 3.9 sets forth an accurate list of all
real and personal property included in "property and equipment" on the balance
sheet of the Company as of the Company Audited Balance Sheet Date and all other
tangible assets of the Company with a value in excess of $5,000 (i) owned by the
Company as of the Company Audited Balance Sheet Date and (ii) acquired since the
Company Audited Balance Sheet Date, including in each case true, complete and
correct copies of leases for significant equipment and for all real property
leased by the Company and descriptions of all real property on which buildings,
warehouses, workshops, garages and other structures used in the operation of the
business of the Company are situated. Schedule 3.9 indicates which assets are
currently owned, or were formerly owned, by the Company Stockholder or
affiliates of the Company or the Company Stockholder. Except as specifically
identified on Schedule 3.9, all of the tangible assets, vehicles and other
significant machinery and equipment of the Company listed on Schedule 3.9 are in
good working order and condition, ordinary wear and tear excepted, and have been
maintained in accordance with standard industry practices. All fixed assets used
by the Company that are material to the operation of the Company's business are
either owned by the Company or leased under an agreement identified on Schedule
3.9. All leases set forth on Schedule 3.9 are in full force and effect and
constitute valid and binding agreements of the parties thereto in accordance
with their respective terms.
Schedule 3.9 contains true, complete and correct copies of all
title reports and title insurance policies received or owned by the Company.
Schedule 3.9 also includes a summary description of all plans or projects
involving the opening of new operations, expansion of existing operations or the
acquisition of any real property or existing business, to which management of
the Company has devoted effort or expenditure in the two-year period prior to
the date of this Agreement, which if pursued by the Company would require
additional expenditures of capital.
The Company has good and indefeasible title to the tangible and
intangible personal property and the real property owned and used in their
business, including the properties identified on Schedule 3.9, subject to no
mortgage, pledge, lien, claim, conditional sales agreement, encumbrance or
charge, except for liens reflected on Schedule 3.9, liens for current taxes not
yet payable and assessments not in default, easements for utilities serving only
the property, and easements, covenants and restrictions and other exceptions to
title shown of record in the appropriate public records in the jurisdictions in
which the properties, assets and leasehold estates are located, which do not
adversely affect the Company's use of the property.
SECTION 3.10. MATERIAL CONTRACTS, COMMITMENTS AND CUSTOMERS. Schedule
3.10 sets forth an accurate list as of the Company Audited Balance Sheet Date of
(i) all material contracts, commitments and similar agreements to which the
Company is a party or by which they or any of their property is bound
(including, but not limited to, joint venture or partnership agreements,
contracts with any labor organizations, loan agreements, indemnity or guaranty
agreements, bonds, mortgages, liens, pledges or other security agreements) and
the Company Stockholder has delivered true copies of such agreements to IES and
(ii) all customers representing 5% or more of the Company's revenues, taken as a
whole, in any of the periods covered by the Company Financial Statements. Except
as disclosed on Schedule 3.10, all such agreements are in full force and effect
and none of such contracts or agreements unduly burdens or restricts the Company
in the ordinary course of its business. The Company's customers or suppliers
have not canceled service or products in relation to existing contracts, as
appropriate. Except to the extent set forth on Schedule 3.10, (i)
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14
the Company has complied with all material commitments and obligations and are
not in default under any contracts and agreements and no notice of default has
been received and (ii) none of the Company's customers listed pursuant to (ii)
above has canceled or substantially reduced or is currently attempting or
threatening to cancel or substantially reduce its use of the Company's products
or services. Except as set forth on Schedule 3.10, the Company is not now, nor
has ever been, a party to any contract subject to price redetermination or
renegotiation.
SECTION 3.11. OPERATING AUTHORITY. The Company possess all material
governmental licenses, permits, franchises, and other authorizations of any
Governmental Authority ("Licenses") that are necessary to the ownership or
operation of their business as currently conducted, and all such Licenses are in
full force and effect, except where the failure to possess any License or the
failure to be in full force and effect is not reasonably expected to have,
individually or in the aggregate, a Company Material Adverse Effect, the Company
is not in default in any respect relating thereto. No proceeding is pending or,
to the Company Stockholder's Knowledge, is threatened seeking the revocation or
limitation of any such License that is reasonably expected to have, individually
or in the aggregate, a Company Material Adverse Effect.
Schedule 3.11 sets forth an accurate list and summary description as of
the Company Audited Balance Sheet Date of all Licenses, certificates,
trademarks, trade names, patents, patent applications and copyrights related to
the assets owned or held by the Company. The Licenses and other rights listed on
Schedule 3.11 are valid, and the Company has not received any notice that any
person intends to cancel, terminate or not renew any such License or other
right. The Company has conducted and is conducting its business in compliance in
all material respects with the requirements, standards, criteria and conditions
set forth in the Licenses and other rights listed on Schedule 3.11 and is not in
violation of any of the foregoing in any material respect. Except as
specifically provided in Schedule 3.11, the consummation of the transactions
contemplated by this Agreement will not result in a default under or a breach or
violation of, or adversely affect the rights and benefits afforded to the
Company by, any such Licenses or other rights.
SECTION 3.12. BANK ACCOUNT INFORMATION. Schedule 3.12 contains an
accurate list of the names and addresses of every bank and other financial
institution in which the Company maintains an account (whether checking, savings
or otherwise), lock box, or safe deposit box, and the account numbers and
persons having signature authority or legal access thereto.
SECTION 3.13. CONDUCT OF BUSINESS SINCE COMPANY AUDITED BALANCE SHEET
DATE. Except as expressly contemplated by this Agreement and except as set forth
on Schedule 3.13, since the Company Audited Balance Sheet Date, (a) the business
and operations of the Company have been conducted in the ordinary and usual
course in all material respects in accordance with past practices, (b) the
Company has not paid or declared any dividend on, or made any distribution with
respect to, or purchased or redeemed any of its capital stock or paid any bonus
to the Company Stockholder and (c) no Company Material Adverse Effect has
occurred and is continuing.
SECTION 3.14. LITIGATION; ORDERS. Except as set forth on Schedule 3.14,
as of the date hereof, there are no Actions pending or, to the Company
Stockholder's Knowledge, threatened against the Company. Except as set forth on
Schedule 3.14, as of the date hereof there are no judgments or outstanding
orders, injunctions, decrees, stipulations, or awards (whether rendered by a
court or administrative agency or by arbitration) against the Company.
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15
SECTION 3.15. LABOR MATTERS. Except as set forth on Schedule 3.15,
there are no agreements with labor unions or associations representing employees
of the Company. No material work stoppage against the Company is pending or, to
the Company Stockholder's Knowledge, threatened. The Company has not been or is
not involved in or, to the Company Stockholder's Knowledge, is threatened with
any labor dispute, arbitration, lawsuit, or administrative proceeding relating
to labor matters involving the employees of the Company (excluding routine
workers' compensation claims) that is reasonably expected to have, individually
or in the aggregate, a Company Material Adverse Effect.
SECTION 3.16. COMPLIANCE WITH LAWS. The conduct of the business by the
Company complies with all statutes, laws, regulations, ordinances, rules,
judgments, orders, or decrees applicable thereto (other than Environmental Laws
(as hereinafter defined) which are governed solely by Section 3.18), except for
violations or failures so to comply, if any, that would not have, individually
or in the aggregate, a Company Material Adverse Effect.
SECTION 3.17. INSURANCE. Schedule 3.17 sets forth a list of all
insurance policies issued in favor of the Company which relate to their
businesses, and all such policies are currently in force and effect. True and
complete copies of all such policies have been delivered to IES. A true and
complete list of all insurance loss runs and workers' compensation claims
received for the past three (3) policy years has been delivered to IES. The
insurance carried by the Company, which the Company Stockholder believes to be
adequate in character and amount, is with financially sound and reputable
insurers unaffiliated with the Company Stockholder or the Company. None of such
policies is a "claims made" policy. All insurance policies carried by the
Company are currently in full force and effect. The Company's insurance has
never been canceled, and the Company has never been denied coverage or
experienced a substantial increase in premiums or substantial reduction in
coverage from one policy period to the next period.
SECTION 3.18. ENVIRONMENTAL MATTERS. Other than violations that would
not have, individually or in the aggregate, a Company Material Adverse Effect,
the Company is in compliance with all applicable Environmental Laws. Without
limitation of the foregoing, there are no past, existing, pending or, to the
Company Stockholder's Knowledge, threatened actions, suits, investigations,
inquiries, proceedings or clean-up obligations by or to any Governmental
Authority relating to any Environmental Laws with respect to the Company, except
for actions, suits, investigations, inquiries, proceedings, and obligations that
would not have, individually or in the aggregate, a Company Material Adverse
Effect. To the Company Stockholder's Knowledge (i) there are no underground
storage tanks on, in or under any properties owned by the Company and no
underground storage tanks have been closed or removed from any of such
properties during the time such properties were owned, leased or operated by the
Company which are not listed on Schedule 3.18 and (ii) there is no asbestos or
asbestos-containing material present in any of the properties owned by the
Company, and no asbestos has been removed from any of such properties during the
time such properties were owned, leased or operated by the Company. Neither the
Company nor any of its respective properties are subject to any material
liabilities or expenditures (fixed or contingent) relating to any suit,
settlement, court order, administrative order, regulatory requirement, judgment
or claim asserted or arising under any Environmental Law. All notices, permits,
or similar authorizations, if any, required to be obtained or filed in
connection with the
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16
operations of the Company, including, without limitation, treatment, storage,
disposal, or release of a hazardous substance or solid waste into the
environment, have been duly obtained or filed, other than any such notices,
permits, or similar authorizations the failure of which to obtain or file is not
reasonably expected to have, individually or in the aggregate, a Company
Material Adverse Effect. The term "release" has the meaning specified in CERCLA
(as hereinafter defined), and the term "disposal" (or "disposed") has the
meaning specified in RCRA (as hereinafter defined). For the purposes hereof,
"Environmental Laws" shall mean any and all laws, statutes, ordinances, rules,
regulations, orders, or determinations of any Governmental Authority pertaining
to the environment in effect on the date of this Agreement and in effect at such
time in any and all jurisdictions in which the Company operates, including,
without limitation, the Clean Air Act, as amended, the Comprehensive
Environmental Response, Compensation and Liability Act, as amended ("CERCLA"),
the Federal Water Pollution Control Act, as amended, the Resource Conservation
and Recovery Act, as amended ("RCRA"), the Safe Drinking Water Act, as amended,
the Toxic Substances Control Act, as amended, comparable state and local laws
and other material environmental protection laws in effect on the date of this
Agreement. Schedule 3.18 lists all disposal sites that the Company has utilized
as of the Company Audited Balance Sheet Date.
SECTION 3.19. TAXES. (a) (i) Except as set forth on Schedule 3.19, the
Company has filed when due all Company Returns (as defined in Section 10.15),
and have, except for Taxes that are being contested in good faith and set forth
on Schedule 3.19, timely paid and discharged all Tax obligations shown thereon
and adequate reserves have been established on the books of the Company for all
Taxes for which the Company is liable but payment is not yet due, (ii) the
Company Returns correctly and accurately reflect the facts regarding the income,
business and assets, operations, activities, status, or other matters of the
Company, and any other information required to be shown thereon, and are not
subject to penalties under Section 6662 of the Code, relating to
accuracy-related penalties, or any corresponding provision of applicable state,
local, or foreign Tax law or any predecessor provision of law, and (iii) the
Company has not received any notice of any Tax deficiency outstanding, proposed,
or assessed against or allocable to it, or has not either executed any waiver of
any statute of limitations on the assessment or collection of any Tax, or
executed or filed with the Internal Revenue Service or any other governmental
agency any agreement now in effect extending the period for assessment or
collection of any Taxes against the Company. No liens for Taxes exist upon the
assets of the Company except liens for Taxes that are not yet due. The Company
is not and never has been, subject to Tax in any jurisdiction outside the United
States. No litigation with respect to any Tax for which the Company is asserted
to be liable is pending or, to the Knowledge of the Company or the Company
Stockholder, threatened, and no basis which the Company or the Company
Stockholder believes to be valid exists on which any claim for any such Tax can
be asserted against the Company. There are no requests for rulings or
determinations in respect of any Taxes pending between the Company and any
taxing authority. No issues have been raised and remain pending by any taxing
authority in connection with the examination of any return of the Company. All
deficiencies asserted and assessments made, if any, as a result of or in
connection with any examination have been paid in full or are fully reflected as
a liability in the financial statements. The Company is not and never has been
party to any Tax allocation or sharing agreement. All amounts required to be
withheld by the Company and paid to governmental agencies for income, social
security, unemployment insurance, sales, excise, use and other Taxes have been
collected or withheld and paid to the proper taxing authority. For purposes of
this Agreement, "Tax" or "Taxes" means taxes of any kind, levies, or other like
assessments,
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customs, duties, imposts, charges, or fees, including, without limitation,
income, gross receipts, ad valorem, value added, excise, real or personal
property, asset, sales, use, license, payroll, transaction, capital, net worth
and franchise taxes, estimated taxes, withholding, employment, social security,
workers compensation, utility, severance, production, unemployment compensation,
occupation, premium, windfall profits, transfer, and gains taxes or other
governmental taxes imposed or payable to the United States, or any state,
county, local, or foreign government or subdivision or agency thereof, and in
each instance such term shall include any interest, penalties, or additions to
tax attributable to or imposed with respect to any such Tax, including penalties
for the failure to file any Tax return or report.
(b) The Company has never been a member of an affiliated group of
corporations, within the meaning of Section 1504 of the Code, other than as a
common parent corporation.
(c) None of the assets of the Company is property that the Company is
required to treat as being owned by any other Person pursuant to the "safe
harbor lease" provisions of former Section 168(f)(8) of the Code.
(d) None of the assets of the Company directly or indirectly secures
any debt the interest on which is tax-exempt under Section 103(a) of the Code.
(e) None of the assets of the Company is "tax-exempt use property"
within the meaning of Section 168(h) of the Code.
(f) the Company has not agreed to make, nor is required to make, any
adjustment under Section 481(a) of the Code by reason of a change in accounting
method or otherwise.
(g) the Company has not participated in, nor will any of them
participate in, an international boycott within the meaning of Section 999 of
the Code.
(h) the Company has not or have not had a permanent establishment in
any foreign country, as defined in any applicable tax treaty or convention
between the United States and such foreign country.
(i) the Company has not filed a consent pursuant to the collapsible
corporation provisions of Section 341(f) of the Code (or any corresponding
provision of state, local, or foreign income tax law) or agreed to have Section
341(f)(2) of the Code (or any corresponding provision of state, local, or
foreign income tax law) apply to any disposition of any asset owned by it.
(j) Neither the Company nor the Company Stockholder is a "foreign
person" as that term is defined in Section 1445(f)(3) of the Code.
(k) The Company has not made, is not obligated to make and is not a
party to any agreement that would require it to make any payment that is not
deductible under Section 280G of the Code.
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18
(l) No asset of the Company is subject to any provision of applicable
law that eliminates or reduces the allowance for depreciation or amortization in
respect of that asset below the allowance generally available to an asset of its
type.
(m) The Company is an "S corporation" as that term is defined in
Section 1361(a)(1) of the Code and has not incurred any federal income tax
liabilities since March 31, 1987.
SECTION 3.20. EMPLOYEE BENEFIT PLANS. (a) Schedule 3.20 contains a list
of all "employee pension benefit plans" (as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
(sometimes referred to herein as "Company Pension Plans"), "employee welfare
benefit plans" (as defined in Section 3(l) of ERISA), stock option, stock
purchase, incentive, bonus, deferred compensation plans or arrangements,
vacation, change in control, stay-on bonus plans or arrangements, and other
material employee compensation and fringe benefit plans or agreements,
maintained, contributed to, or pursuant to which the Company has or may have any
liability, whether or not heretofore terminated (all the foregoing being herein
called "Company Benefit Plans"). The Company has delivered to IES an accurate
list (which is set forth on Schedule 3.20) showing all officers, directors and
key employees of the Company, listing all employment agreements with such
officers, directors and key employees and the rate of compensation (and the
portions thereof attributable to salary, bonus and other compensation,
respectively) of each of such persons as of (i) December 31, 1998 and (ii) the
date hereof. The Company has provided to IES true, complete and correct copies
of any employment agreements for persons listed on Schedule 3.20. Since December
31, 1998, except as disclosed on Schedule 3.20, there have been no increases in
the compensation payable or any special bonuses to any officer, director, key
employee or other employee, except ordinary salary increases implemented on a
basis consistent with past practices. The Company has made available to IES
true, complete, and correct copies of (1) each Company Benefit Plan and any
subsequently adopted amendments thereto (or, in the case of unwritten Company
Benefit Plans, descriptions thereof), (2) the most recent annual report on Form
5500 filed with respect to each Company Benefit Plan (if any such report was
required), (3) the most recent summary plan description for each Company Benefit
Plan for which such a summary plan description is required (with all summaries
of material modifications provided after the most recent summary plan
description was distributed), (4) each trust agreement, group annuity contract
and service agreement relating to any Company Benefit Plan and (5) each
favorable determination letter from the Internal Revenue Service with respect to
each Company Benefit Plan that is intended to be qualified under Section 401(a)
of the Code.
(b) All Company Benefit Plans are and have been administered in
compliance with their terms and all applicable laws, including, without
limitation, ERISA and the Code, except where the failure to so administer the
Company Benefit Plans or to comply with such laws would not have, individually
or in the aggregate, a Company Material Adverse Effect. There are no pending or,
to the Company Stockholder's Knowledge, threatened investigations by any
governmental entity, termination proceedings, or other suits or proceedings
against or involving any Company Benefit Plan. All such plans that are intended
to qualify (the "Qualified Plans") under Section 401(a) of the Code are and have
been determined by the Internal Revenue Service to be so qualified, and copies
of such determination letters are attached to Schedule 3.20. Except as disclosed
on Schedule 3.20, all reports and other documents required to be filed with any
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governmental agency or distributed to plan participants or beneficiaries
(including, but not limited to, actuarial reports, audits or tax returns) have
been timely filed or distributed, and copies thereof are included as part of
Schedule 3.20 hereof.
(c) All contributions to, and payments from, the Company Benefit Plans
required to be made in accordance with the Company Benefit Plans or applicable
law have been timely made. All accrued contribution obligations of the Company
with respect to any Company Benefit Plan have either been fulfilled in their
entirety or are fully reflected on the balance sheet in the Company Financial
Statements.
(d) No Company Benefit Plan is subject to Section 302 or Title IV of
ERISA or Section 412 of the Code or is a "multiemployer plan" within the meaning
of Section 4001(a)(3) of ERISA or a "multiple employer's plan" within the
meaning of Section 413 of the Code.
(e) (i) No "prohibited transaction" (under Section 4975 of the Code or
Section 406 of ERISA) has occurred with respect to any Company Benefit Plan and
(ii) there has been no breach of any fiduciary duty with respect to any Company
Benefit Plan, other than, in the case of (i) and (ii), those that are not
reasonably expected to have, individually or in the aggregate, a Company
Material Adverse Effect.
(f) the Company does not maintain or contribute to any Company Benefit
Plan that could not be unilaterally terminated by the Company at any time
without liability.
(g) Except as set forth on Schedule 3.20, there are no assets of any
Company Benefit Plan that are not readily tradeable on a national securities
exchange, including the Nasdaq Stock Market.
SECTION 3.21. BROKERAGE FEES AND COMMISSIONS. Except as set forth on
Schedule 3.21, neither the Company nor the Company Stockholder has incurred any
obligation or entered into any agreement for any investment banking, brokerage
or finder's fee, or commission in respect of the transactions contemplated by
this Agreement for which IES or the Company shall incur any liability.
SECTION 3.22. TAX TREATMENT. Neither the Company nor, to the Company
Stockholder's Knowledge, any of its affiliates has taken, has agreed or failed
to take, or intends to take any action or has any knowledge of any fact or
circumstance that would prevent the Merger from qualifying as a reorganization
within the meaning of Section 368 of the Code (a "368 Reorganization").
SECTION 3.23. SECTION 368(a)(2)(D) REPRESENTATIONS. The Company and the
Company Stockholder hereby represent and warrant the following to be true and
correct as of the Effective Time:
(a) The fair market value of the IES Common Stock and other
consideration received by the Company Stockholder will be approximately equal to
the fair market value of the Company Common Stock surrendered in the exchange.
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(b) There is no plan or intention of the Company Stockholder to have
IES redeem, or have a party related to IES acquire, shares of IES Common Stock
received in the Merger which would reduce the Company Stockholder's ownership of
a number of shares of IES Common Stock received in the Merger to a number of
shares having a value, as of the date of the Merger, of less than 40% of the sum
of (i) the value at the Effective Time of all the Company Common Stock held
immediately prior to the Merger by the Company Stockholder and (ii) the value at
the Effective Time of any other instruments (such as debt of the Company which
is guaranteed by the Company Stockholder) which are classified for federal
income tax purposes as stock of the Company (collectively, "Shares") and which
are held immediately prior to the Merger by the Company Stockholder. For
purposes of this representation, Shares outstanding immediately prior to the
Merger include Shares redeemed prior to the Merger by reason of this Agreement
or otherwise as part of the Merger, and the value of all Shares outstanding
immediately prior to the Merger shall be determined with regard to any
extraordinary distributions (i.e., distributions with respect to Shares other
than regular, normal dividends) by the Company by reason of this Agreement or
otherwise as part of the Merger. For purposes of this representation, a party is
related to IES if such party and IES would be treated as related parties within
the meaning of Treasury Regulations Section 1.368-1(e)(3).
(c) Acquisition will acquire substantially all of the properties
including the business assets of the Company. For purposes of this
representation, amounts paid by the Company to dissenters, amounts paid by the
Company to Company Stockholder who receives cash or other property, amounts used
by the Company to pay reorganization expenses, and all redemptions and
distributions (except for regular, normal dividends, if any) made by the Company
immediately preceding the Merger, will be included as assets of the Company held
immediately prior to the Merger.
(d) The Company and the Company Stockholder will pay their respective
expenses, if any, incurred in connection with the Merger.
(e) There is no intercorporate indebtedness existing between IES and
the Company or between Acquisition and the Company that was issued, acquired or
will be settled at a discount.
(f) The Company is not an investment company. For purposes of this
representation, an investment company means a regulated investment company (as
defined in the Code), a real estate investment trust (as defined in the Code),
or a corporation, 50 percent or more of the value of whose total assets are
stock and securities and 80 percent or more of the value of whose total assets
are assets held for investment within the meaning of Section 368(a)(2)(F)(iii)
of the Code.
(g) The Company is not under the jurisdiction of a court in a case
under Title 11 of the United States Code, or a receivership, foreclosure, or
similar proceeding in a federal or state court.
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21
(h) On the date of the Merger, the fair market value of the assets of
the Company will exceed the sum of its liabilities, plus the amount of
liabilities, if any, to which its assets are subject.
(i) None of the compensation received by any stockholder-employees of
the Company will be separate consideration for, or allocable to, any of their
shares of Company Common Stock. None of the shares of IES Common Stock to be
received by any stockholder-employee will be separate consideration for, or
allocable to, any employment agreements, and the compensation paid to any
stockholder-employee will be for services actually rendered and will be
commensurate with amounts paid to third parties bargaining at arm's length for
similar services.
(j) The payment of cash in lieu of issuing fractional shares of IES
Common Stock is solely for the purpose of avoiding the expense and inconvenience
to IES of issuing fractional shares and does not represent separately
bargained-for consideration. The total cash consideration that will be paid in
the Merger to the Company Stockholder instead of issuing fractional shares of
IES Common Stock will not exceed one percent of the total consideration that
will be issued in the Merger to the Company Stockholder in exchange for his
shares of Company Common Stock. The fractional share interests of the Company
Stockholder will be aggregated and the Company Stockholder will not receive cash
in an amount equal to or greater than the value of one full share of IES Common
Stock.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF IES
IES represents and warrants to the Company Stockholder as follows:
SECTION 4.1. ORGANIZATION AND QUALIFICATION. Each of IES and
Acquisition is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation, and IES has the
requisite corporate power to carry on its business as it is now conducted. IES
is duly qualified to conduct business as a foreign corporation in each
jurisdiction in which its ownership or lease of property or the conduct of its
business and operations makes such qualification necessary, except for such
jurisdictions in which IES' failure to be so qualified is not reasonably
expected to have, individually or in the aggregate, an IES Material Adverse
Effect (as defined in Section 10.15).
SECTION 4.2. CAPITALIZATION. (a) The authorized capital stock of IES
consists of 100,000,000 shares of IES Common Stock, 2,655,709 shares of
restricted voting common stock and 10,000,000 shares of preferred stock. As of
February 11, 1999, there were outstanding 29,925,269 shares of IES Common Stock
(including no shares of treasury stock), 2,655,709 shares of restricted voting
common stock, and no shares of preferred stock. All outstanding shares of
capital stock of IES have been duly authorized and validly issued and are fully
paid and non-assessable and free of preemptive rights.
(b) The shares of IES Common Stock to be issued as the Merger
Consideration have been duly authorized and, when issued and delivered in
accordance with the terms of this Agreement, will
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have been validly issued and will be fully paid and non-assessable, and the
issuance thereof is not subject to any preemptive or other similar right.
SECTION 4.3. AUTHORIZATION. The execution, delivery and performance by
IES of this Agreement, and the consummation by IES and Acquisition of the
transactions contemplated hereby, are within the corporate powers of IES and
Acquisition and have been duly authorized by all necessary corporate action.
This Agreement has been duly executed and delivered by IES and Acquisition and
constitutes the valid and binding obligation of IES and Acquisition enforceable
against IES and Acquisition in accordance with its terms.
SECTION 4.4. CONSENTS AND APPROVAL; NO VIOLATION. Neither the execution
and delivery of this Agreement by IES and Acquisition, nor the consummation by
IES and Acquisition of the transactions contemplated by this Agreement, will:
(a) require any consent, approval, authorization, or permit of, or filing with
or notification to, any Governmental Authority, except (i) the filing of the
Certificates of Merger in accordance with Delaware Law and Georgia Law, (ii)
compliance with any applicable requirements of the 1933 Act, the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and foreign or state
securities or Blue Sky laws, (iii) any regulatory approvals or routine
governmental consents normally acquired after the consummation of transactions
such as transactions of the nature contemplated by this Agreement, or (iv) where
the failure to obtain such consent, approval, authorization, or permit, or to
make such filing or notification, is not reasonably expected to have,
individually or in the aggregate, an IES Material Adverse Effect or prevent or
delay, in any material respect, the consummation of the transactions
contemplated by this Agreement; (b) result in a default (or give rise to any
right of termination, cancellation, or acceleration) under any of the terms,
conditions, or provisions of any agreement or other instrument binding upon IES
or any of its subsidiaries, except for such defaults (or rights of termination,
cancellation, or acceleration) as to which requisite waivers or consents have
been obtained or which are not reasonably expected to have, individually or in
the aggregate, an IES Material Adverse Effect or prevent or delay, in any
material respect, the consummation of the transactions contemplated by this
Agreement; or (c) assuming compliance with the matters referred to in Section
4.4(a), violate any order, writ, injunction, decree, statute, rule, or
regulation applicable to IES or any of its subsidiaries or any of their assets,
except for violations which are not reasonably expected to have, individually or
in the aggregate, an IES Material Adverse Effect or prevent or delay, in any
material respect, the consummation of the transactions contemplated by this
Agreement.
SECTION 4.5. SEC FILINGS. (a) IES has filed with the Securities and
Exchange Commission ("SEC") all material forms, statements, reports and
documents (the "IES SEC Filings") required to be filed by it under the 1934 Act
and the rules and regulations thereunder.
(b) As of its filing date, each IES SEC Filing complied as to
form in all material respects with the applicable requirements of the
1934 Act.
(c) As of its filing date, each IES SEC Filing filed pursuant
to the 1934 Act did not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which
they were made, not misleading.
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(d) IES has previously delivered to the Company Stockholder
copies of IES' prospectus, dated April 9, 1999, as supplemented (the
"Prospectus"), as well as a copy of the annual report to shareholders
for the year ended September 30, 1998 (the "Annual Report"). As of its
date, the Prospectus did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
SECTION 4.6. TAX TREATMENT. Neither IES nor, to IES' Knowledge, any of
its affiliates has taken, has agreed or failed to take, or intends to take any
action or has any knowledge of any fact or circumstance that would prevent the
Merger from qualifying as a 368 Reorganization.
SECTION 4.7. SECTION 368(a)(2)(D) REPRESENTATIONS. IES hereby
represents and warrants the following to be true and correct as of the Effective
Time:
(a) The Merger was negotiated through arm's length bargaining.
Accordingly, the fair market value of the IES stock and other consideration
received by the Company Stockholder will be approximately equal to the fair
market value of the Company Common Stock surrendered in the exchange.
(b) Prior to the Merger, IES will be in control of Acquisition within
the meaning of Section 368(c)(1) of the Code.
(c) Following the Merger, Acquisition has no current plan or intent to
issue additional shares of its stock that would result in IES losing control of
Acquisition within the meaning of Section 368(c)(1) of the Code.
(d) IES has no current plan or intention to reacquire any of its stock
issued in the Merger.
(e) IES has no current plan or intention to liquidate Acquisition; to
merge Acquisition with and into another corporation; to sell or otherwise
dispose of any of the assets of the Company acquired in the Merger, except for
dispositions made in the ordinary course of business or transfers described in
section 368(a)(2)(C) of the Code.
(f) Following the Merger, Acquisition will continue the historic
business of the Company or use a significant portion of the Company's business
assets in a business.
(g) There is no inter-corporate indebtedness existing between IES and
the Company or between Acquisition and the Company that was issued, acquired, or
will be settled at a discount.
(h) Neither IES nor Acquisition is an investment company as defined in
section 368(a)(2)(f)(iii) and (iv) of the Code.
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(i) None of the compensation received by any stockholder-employees of
the Company will be separate consideration for, or allocable to, any of their
shares of Company Common Stock. None of the shares of IES Common Stock to be
received by any stockholder-employee will be separate consideration for, or
allocable to, any employment agreements, and the compensation paid to any
stockholder-employee will be for services actually rendered and will be
commensurate with amounts paid to third parties bargaining at arm's length for
similar services.
ARTICLE V
ADDITIONAL COVENANTS AND AGREEMENTS
SECTION 5.1. REASONABLE BEST EFFORTS. Subject to the terms and
conditions of this Agreement, each party will use its reasonable best efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper, or advisable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement.
SECTION 5.2. CERTAIN FILINGS. The Company and IES shall cooperate with
one another (i) in determining whether any action by or in respect of, or filing
with, any Governmental Authority is required, or any actions, consents,
approvals, or waivers are required to be obtained from parties to any material
agreements, in connection with the consummation of the transactions contemplated
by this Agreement and (ii) in taking such actions or making such filings,
furnishing information required in connection therewith and seeking timely to
obtain such actions, consents, approvals, or waivers.
SECTION 5.3. PUBLIC ANNOUNCEMENTS. Without the prior consent of the
other, which consent shall not be unreasonably withheld, neither the Company nor
the Company Stockholder will issue, or permit any agent or affiliate to issue,
any press releases or otherwise make or permit any agent or affiliate to make,
any public statements with respect to this Agreement or the transactions
contemplated by this Agreement.
SECTION 5.4. FURTHER ASSURANCES. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company or Acquisition,
any deeds, bills of sale, assignments, or assurances and to take and do, in the
name and on behalf of the Company or Acquisition, any other actions and things
to consummate the Merger and to vest, perfect, or confirm of record or otherwise
in the Surviving Corporation any and all right, title, and interest in, to, and
under any of the rights, properties, or assets of the Company acquired or to be
acquired by the Surviving Corporation as a result of, or in connection with, the
Merger.
SECTION 5.5. NOTICES OF CERTAIN EVENTS. Each of the Company, the
Company Stockholder and IES shall promptly notify the other parties hereto of:
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(a) any notice or other communication from any Person alleging that the
consent of such Person is or may be required in connection with the transactions
contemplated by this Agreement;
(b) any notice or other communication from any Governmental Authority
in connection with the transactions contemplated by this Agreement;
(c) any actions, suits, claims, investigations or proceedings commenced
or, to its knowledge, threatened against, relating to, or involving or otherwise
affecting such party that relate to the consummation of the transactions
contemplated by this Agreement; and
(d) any material failure on its part to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to this
Section 5.5(d) shall not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
SECTION 5.6. RELEASE FROM GUARANTEES. Following the Effective Time, IES
and the Surviving Corporation shall use reasonable efforts to have the Company
Stockholder released from the personal guarantees of the Company's indebtedness
identified on Schedule 5.6. In the event that IES cannot obtain releases of any
such guarantees on or prior to one hundred and twenty (120) days subsequent to
the Effective Time, IES shall pay off or otherwise refinance or retire such
indebtedness.
SECTION 5.7. FUTURE COOPERATION. The Company, Company Stockholder and
IES shall each deliver or cause to be delivered to the other following the
Effective Time such additional instruments as the other may reasonably request
for the purpose of fully carrying out this Agreement. The Company Stockholder
will cooperate and use his reasonable best efforts to have the present officers,
directors and employees of and independent accountants to the Company cooperate
with IES at and after the Effective Time in furnishing information, evidence,
testimony and other assistance in connection with any actions, proceedings,
arrangements or disputes of any nature with respect to matters pertaining to all
periods prior to the Effective Time, including, without limitation, consent to
the inclusion of any independent auditor's report in documents filed by IES
under the 1933 Act or 1934 Act.
SECTION 5.8. EXPENSES. IES and the Company Stockholder will each pay
their own fees, expenses and disbursements of their respective agents,
representatives, accountants and counsel incurred in connection with the
execution, delivery and performance of this Agreement and any amendment thereto.
SECTION 5.9. REPAYMENT OF RELATED PARTY INDEBTEDNESS. Concurrently with
the execution of this Agreement, (i) the Company Stockholder shall repay to the
Company all amounts outstanding as advances to or receivables from the Company
Stockholder and (ii) the Company shall repay all amounts outstanding under loans
to the Company from the Company Stockholder. Such advances, receivables and
loans, and the amounts thereof, are listed on Schedule 5.9.
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SECTION 5.10. FIRPTA CERTIFICATE. The Company Stockholder will deliver
to IES a certificate to the effect that he is not a foreign person pursuant to
Section 1.1445-2(b) of the Treasury regulations.
SECTION 5.11. PREPARATION AND FILING OF TAX RETURNS.
(a) The Company Stockholder shall file or cause to be filed
all tax returns for all taxable periods that end on or before the Closing, but
in each case only after IES has reviewed such filings and consented thereto.
(b) IES shall file or cause to be filed all tax returns for
all taxable periods ending after the Closing.
(c) Each party hereto shall, and shall cause its subsidiaries
and affiliates to, provide to each of the other parties hereto such cooperation
and information as any of them reasonably may request in filing any tax returns,
amended tax returns or claim for refund, determining a liability for Taxes or a
right to refund of Taxes or in conducting any audit or other proceeding in
respect of Taxes. Such cooperation and information shall include providing
copies of all relevant portions of relevant tax returns, together with relevant
accompanying schedules and relevant work papers, relevant documents relating to
rulings or other determinations by taxing authorities and relevant records
concerning the ownership and Tax basis of property, which such party may
possess. Each party shall make its employees reasonably available on a mutually
convenient basis at its cost to provide explanation of any documents or
information so provided. Subject to the preceding sentence, each party required
to file tax returns pursuant to this Agreement shall bear all costs of filing
such tax returns.
SECTION 5.12. TAX-FREE REORGANIZATION. IES and the Company Stockholder
shall each use their best efforts to cause the Merger to be treated as a
reorganization within the meaning of Section 368(a) of the Code.
SECTION 5.13. CONDUCT OF BUSINESS PENDING CLOSING. (a) Between the date
of this Agreement and the Closing, the Company Stockholder will, and will cause
the Company to, except as set forth below on Schedule 5.14:
(i) carry on his respective businesses in substantially
the same manner as they have heretofore;
(ii) use all commercially reasonable efforts to maintain
their properties and facilities, including those held under leases, in
as good working order and condition as at present, ordinary wear and
tear excepted;
(iii) perform in all material respects all of their
respective obligations under agreements relating to or affecting their
respective assets, properties or rights;
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(iv) use all reasonable efforts to keep in full force and
effect present insurance policies or other comparable insurance
coverage;
(v) use their commercially reasonable efforts to maintain
and preserve their business organization intact, retain their
respective present key employees and maintain their respective
relationships with suppliers, customers and others having business
relations with the Company;
(vi) use reasonable efforts to maintain compliance with
all material permits, laws, rules and regulations, consent orders, and
all other orders of applicable courts, regulatory agencies and similar
Governmental Authorities;
(vii) maintain present debt and lease instruments in
accordance with their terms and not enter into new or amended debt or
lease instruments without the Knowledge and consent of IES (which
consent shall not be unreasonably withheld), provided that debt and/or
lease instruments may be replaced without the consent of IES if such
replacement instruments are on terms at least as favorable to the
Company as the instruments being replaced;
(viii) maintain or reduce present salaries and commission
levels for all officers, directors, employees and agents except for
ordinary and customary bonus and salary increases for employees in
accordance with past practices; and
(ix) afford to the officers and authorized representatives
of IES reasonable access during normal business hours to all of the
Company's sites, properties, books and records and will furnish IES
with such additional financial and operating data and other information
as to the business and properties of the Company as IES may from time
to time reasonably request.
(b) Except as disclosed on Schedule 5.14, between the date hereof and
the Closing, the Company will not, without prior written consent of IES:
(i) make any change in its Articles of Incorporation or
Bylaws;
(ii) issue any securities, options, warrants, calls,
conversion rights or commitments relating to its securities of any
kind;
(iii) declare or pay any dividend, or make any distribution
in respect of its stock whether now or hereafter outstanding, or
purchase, redeem, or otherwise acquire or retire for value any share of
its stock;
(iv) into any contract or commitment or incur or agree to
incur any liability or make any capital expenditures, except if it is
in the normal course of business (consistent with past practice) or
involves an amount not in excess of two percent (2%) of the Company's
revenues for fiscal 1997;
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(v) create, assume or permit to exist any mortgage,
pledge or other Lien or encumbrance upon any assets or properties
whether now owned or hereafter acquired, except with respect to
purchase money Liens incurred in connection with the acquisition of
equipment with an aggregate cost not in excess of two percent (2%) of
the Company's revenues for fiscal 1997 necessary or desirable for the
conduct of the businesses of the Company;
(vi) sell, assign, lease or otherwise transfer or dispose
of any property or equipment except in the normal course of business;
(vii) negotiate for the acquisition of any business or the
start-up of any new business;
(viii) merge or consolidate or agree to merge or consolidate
with or into any other corporation;
(ix) waive any material rights or claims of the Company,
provided that the Company may negotiate and adjust bills and accounts
in the course of good faith disputes with customers in a manner
consistent with past practice, provided, further, that such adjustments
shall not be deemed to be included in Schedule 5.16 unless specifically
listed thereon;
(x) amend or terminate any material judgment, permit,
license or other right to the Company; or
(xi) enter into any other transaction outside the ordinary
course of its business or prohibited thereunder.
(c) None of the Company Stockholder, the Company, nor any agent,
officer, director, trustee or any representative of any of the foregoing will,
during the period commencing on the date of this Agreement and ending with the
earlier to occur of the Effective Time or the termination of this Agreement in
accordance with its terms, directly or indirectly (i) solicit or initiate the
submission of proposals or offers from any person for, (ii) participate in any
discussions pertaining to, (iii) enter into any agreement or understanding with
respect to, (iv) furnish any information to any person other than IES or its
authorized agents relating to, or (v) allow to occur, any acquisition, purchase
or sale of all or a material amount of the assets of, or any equity interest in,
the Company or a merger, consolidation or business combination of the Company.
SECTION 5.14. NOTIFICATION OF CERTAIN MATTERS. The Company Stockholder
shall give prompt notice to IES upon obtaining Knowledge of (a) the occurrence
or non-occurrence of any event which would be likely to cause any representation
or warranty contained herein to be untrue or inaccurate and (b) any failure of
the Company Stockholder or the Company to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by such person
hereunder. IES shall give prompt notice to the Company Stockholder of (i) the
occurrence or non-occurrence of any event which would be likely to cause any
representation or warranty of IES
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contained herein to be untrue or inaccurate and (ii) any failure of IES to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it hereunder.
ARTICLE VI
INDEMNIFICATION
The Company Stockholder and IES each make the following covenants:
SECTION 6.1. INDEMNIFICATION BY THE COMPANY STOCKHOLDER. The Company
Stockholder covenants and agrees that he will indemnify, defend, protect, and
hold harmless IES, the Company, and the Surviving Corporation, and their
respective officers, directors, employees, stockholders, agents,
representatives, and affiliates (the "IES Indemnitees") at all times from and
after the date of this Agreement from and against all claims, damages, losses,
liabilities (joint or several), obligations, penalties, defenses, actions,
lawsuits, proceedings, judgments, demands, assessments, costs, and expenses
(including specifically, but without limitation, fees, disbursements, and
expenses of attorneys, accountants, other professional advisors and of expert
witnesses and costs of investigation and preparation) (collectively, "Damages"),
as they are incurred, directly or indirectly resulting from, relating to or
arising out of:
(a) any breach of or inaccuracy in, or any allegation or claim by a
third party which, if true, would constitute a breach or inaccuracy in, any
representation or warranty set forth herein or in the Schedules or certificates
delivered in connection herewith;
(b) any breach or non-performance, partial or total, by the Company or
the Company Stockholder of any covenant or agreement of the Company (or any
affiliate or subsidiary thereof) or the Company Stockholder (or any affiliate
thereof) contained in this Agreement;
(c) any actual or threatened violation of or non-compliance with any
Environmental Laws arising from any event, condition, circumstance, activity,
practice, incident, action, or plan existing or occurring prior to the Effective
Time relating in any way to the assets or the business of the Company (including
without limitation the ownership, operation, or use of the Company's assets and
the conduct of the business of the Company prior to the Effective Time; the
presence of any underground storage tanks or any hazardous substances or solid
waste on, in, under, or affecting all or any portion of the Company's properties
or any surrounding areas, and any release (as defined in CERCLA) or threatened
release with respect to such underground storage tanks or hazardous substances
or solid waste; and the storage, disposal, or treatment, or transportation for
storage, disposal, or treatment, of hazardous substances or solid waste; but
excluding any violation of or non-compliance with any Environmental Laws that is
attributable solely to a change by IES in the structure, use or condition of any
of the Company's assets after the Effective Time); or
(d) the ownership, management, or use of the Company's assets prior to
the Effective Time; the conduct of the business of the Company prior to the
Effective Time;
(e) the Xxxxxxxx Xxxxxxxxxx x. Xxxxxx Electrical Contractors, Inc. and
R. Nrett Xxxxxxxx, Civil Action Xx. 0 00-XX-0000, Xxxxxx Xxxxxx Xxxxxxxx Xxxxx
for the Northern District of
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Georgia, Atlanta Division to the extent of one half of the amount of such
Damages which exceed $120,000.
(f) any losses or costs of defending against any claims which may be
made against IES by any Person claiming violations of any local, state, or
federal laws relating to the employment relationship, including, but not limited
to, wages, hours, concerted activity, nondiscrimination, occupational health and
safety, and the payment and withholding of Taxes, where such claims arise out of
circumstances occurring prior to the Effective Time.
Notwithstanding any provision to the contrary in this Agreement, in no
event whatsoever shall the aggregate liability of the Company Stockholder, on
the one hand, or IES, on the other hand, under this Agreement (including all
costs, expenses and attorneys' fees paid or incurred in connection therewith or
with respect to any indemnification or the curing of any and all
misrepresentations or breaches under this Agreement) exceed the amount
$16,800,000 adjusted by the actual value of the difference between the value of
IES Common Stock priced at the closing price as reported in the Wall Street
Journal of the day preceding the day of settlement of the indemnity obligation
less $10,500,000; provided, however, that the foregoing limitation on liability
shall not apply with respect to indemnity obligations under Section 6.1(a)
relating to Section 3.2 or Section 3.19 hereof or with respect to any Damages
that relate to or occur as a result of fraudulent misrepresentations or
fraudulent acts.
Payment of Damages to IES Indemnitees can be made by paying 50% in IES
Common Stock and 50% in cash, the IES Common Stock being valued at the closing
of the day preceding the day of settlement.
SECTION 6.2. INDEMNIFICATION RELATED TO TAX LIABILITIES. The Company
Stockholder shall retain liability, and shall indemnify IES, for the payment of
any Tax liabilities with respect to the conduct of the business of the Company
during all periods ending as of or prior to the Effective Time.
SECTION 6.3. INDEMNIFICATION BY IES. IES covenants and agrees that it
will indemnify, defend, protect and hold harmless the Company Stockholder (the
"Stockholder Indemnitee") at all times from and after the date of this Agreement
from and against all claims, damages, losses, liabilities (joint or several),
obligations, penalties, defenses, actions, lawsuits, proceedings, judgments,
demands, assessments, costs, and expenses (including specifically, but without
limitation, fees, disbursements, and expenses of attorneys, accountants, other
professional advisors and of expert witnesses and costs of investigation and
preparation), as they are incurred, directly or indirectly resulting from,
relating to or arising out of:
(a) any breach of or inaccuracy in, or any allegation or claim by a
third party which, if true, would constitute a breach or inaccuracy in, any
representation or warranty of IES set forth herein or in the Schedules or
certificates delivered in connection herewith;
(b) any breach or non-performance, partial or total, by IES of any
covenant or agreement of IES (or any affiliate or subsidiary thereof) contained
in this Agreement.
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SECTION 6.4. INDEMNIFICATION PROCEEDINGS. Promptly after a party
indemnified pursuant to this Article VI ("Indemnitee") has received notice of or
has knowledge of any claim by a person not a party to this Agreement ("third
party") or the commencement of any action or proceeding by a third party, the
Indemnitee shall promptly, and in any event within 60 days of the assertion of
any claim or the discovery of any fact upon which Indemnitee intends to base a
claim for indemnification under this Agreement ("Indemnitee Claim"), as a
condition precedent to the Indemnitee Claim, give written notice to the party or
parties from whom indemnification is sought ("Indemnitor") of such claim by the
third party. Such notice shall state the nature and the basis of such claim and
a reasonable estimate of the amount thereof. In the event of any Indemnitee
Claim, Indemnitor, at its option, shall have the right to defend or settle, at
its own expense and by its own counsel, any such matter so long as the
Indemnitor pursues the same in good faith and diligently. If the Indemnitor
undertakes to defend or settle, it shall promptly notify the Indemnitee of its
intention to do so, and the Indemnitee shall cooperate with the Indemnitor and
its counsel in the defense thereof and in any settlement thereof.
Notwithstanding the foregoing, the Indemnitee shall have the right to
participate in any matter through counsel of its own choosing at Indemnitor's
own expense; provided that the Indemnitor's counsel shall always be lead counsel
and shall determine all litigation and settlement steps, strategy and the like.
Except as set forth in the preceding sentence, after the Indemnitor has notified
the Indemnitee of its intention to undertake to defend or settle any such
asserted liability, and for so long as the Indemnitor diligently pursues such
defense, the Indemnitor shall not be liable for any additional legal expenses
incurred by the Indemnitee in connection with any defense or settlement of such
asserted liability, except to the extent such participation is requested by the
Indemnitor, in which event the Indemnitee shall be reimbursed by the Indemnitor
for reasonable additional legal expenses, out-of-pocket expenses and allocable
share of employee compensation incurred in connection with such participation
for any employee whose participation is so requested. If the Indemnitor desires
to accept a final and complete settlement of any such third party claim and the
Indemnitee refuses to consent to any such settlement which contains a complete
and irrevocable release of Indemnitee of all current and future claims related
to or arising out of the matter in dispute, then the Indemnitor's liability
under this Section with respect to such third party claim shall be limited to
the amount so offered in settlement by said third party. If the Indemnitor does
not undertake to defend such matter to which the Indemnitee is entitled to
indemnification hereunder, or fails diligently to pursue such defense, the
Indemnitee may undertake such defense through counsel of its choice, at the cost
and expense of the Indemnitor, and the Indemnitee may settle such matter,
without the consent of the Indemnitor, and the Indemnitor shall immediately
reimburse the Indemnitee for the amount paid in such settlement and any other
liabilities or expenses incurred (including all legal fees and expenses) by the
Indemnitee in connection therewith as such amounts, liabilities, expenses and
fees are incurred.
SECTION 6.5. OTHER REMEDIES. Notwithstanding the indemnification
obligations contained within this Article VI, in no event shall the
indemnification provisions hereof limit in any way the ability of any of the
parties to this Agreement to seek any other remedies which may be available to
them under law.
SECTION 6.6. INDEMNIFICATION IF NEGLIGENCE OF INDEMNITEE. The
indemnification provided in this Article VI shall be applicable whether or not
negligence of the Indemnitee is alleged or proven.
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SECTION 6.7. NO THIRD-PARTY BENEFICIARIES. The foregoing
indemnification is given solely for the purpose of protecting the IES
Indemnitees and the Stockholder Indemnitee and shall not be deemed extended to,
or interpreted in a manner to confer any benefit, right, or cause of action
upon, any other Person.
SECTION 6.8. LIMITATION UPON INDEMNITY. The Company Stockholder, on the
one hand, and IES, on the other hand, shall be entitled to indemnification from
the other under the provisions of this Article VI for all claims subject to
indemnification by such party, but only after such time that the amount of, and
to the extent that, such claims exceed, in the aggregate, one percent (1%) of
the value of the Merger Consideration, or $210,000; provided, however, that the
foregoing limitation on liability shall not apply with respect to indemnity
obligations under Section 6.1(a) relating to Section 3.2, Section 3.18, Section
3.19, or 6.1(e) hereof or with respect to any Damages that relate to or occur as
a result of fraudulent misrepresentations or fraudulent acts.
ARTICLE VII
NONCOMPETITION COVENANTS
SECTION 7.1. PROHIBITED ACTIVITIES. The Company Stockholder will not,
for a period of two (2) years following the Effective Time, directly or
indirectly, for himself or on behalf of or in conjunction with any or Person:
(a) engage, as an officer, director, shareholder, owner, partner, joint
venturer, or in a managerial or advisory capacity, whether as an employee,
independent contractor, consultant, or advisor, or as a sales representative, in
any business offering any services or products in direct competition with IES or
any of its subsidiaries within 100 miles of where IES or any of its subsidiaries
conducts business, including any territory serviced by IES or any of its
subsidiaries (which subsidiaries, for purposes of this Article VII shall
include, without limitation, the Company) (the "Territory");
(b) call upon any Person who is, at that time, within the Territory, an
employee of IES or any of its subsidiaries for the purpose or with the intent of
enticing such employee away from or out of the employ of IES or any of its
subsidiaries;
(c) call upon any Person who is, at that time, or which has been within
one (1) year prior to that time, a customer of IES or any of its subsidiaries
within the Territory for the purpose of soliciting or selling services or
products in direct competition with IES or any of its subsidiaries within the
Territory;
(d) call upon any prospective acquisition candidate, on the Company
Stockholder's own behalf or on behalf of any competitor in the electrical
contracting business, which candidate, to the actual knowledge of Company
Stockholder after due inquiry, was called upon by IES or any subsidiary thereof
or for which, to the actual knowledge of the Company Stockholder after inquiry,
IES or any subsidiary thereof made an acquisition analysis, for the purpose of
acquiring such entity; or
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(e) disclose customers, whether in existence or proposed, of the
Company to any person, firm, partnership, corporation or business for any reason
or purpose whatsoever except to the extent that the Company has in the past
disclosed such information to the public for valid business reasons.
Notwithstanding the above, the foregoing covenant shall not be deemed
to prohibit the Company Stockholder from acquiring, as a passive investor with
no involvement in the operations of the business, not more than one percent (1%)
of the capital stock of a business providing services similar to those provided
by IES whose stock is publicly traded on a national securities exchange or over
the counter.
SECTION 7.2. EQUITABLE RELIEF. Because of the difficulty of measuring
economic losses to IES as a result of a breach of the foregoing covenant, and
because of the immediate and irreparable damage that could be caused to IES for
which it would have no other adequate remedy, the Company Stockholder agrees
that the foregoing covenant may be enforced by IES by injunctions, restraining
orders, and other equitable actions and agrees to waive any requirement for the
securing or posting of any bond in connection with the obtaining of any such
injunctive or other equitable relief.
SECTION 7.3. REASONABLE RESTRAINT. It is agreed by the parties hereto
that the foregoing covenants in this Article VII impose a reasonable restraint
on the Company Stockholder in light of the activities and business of IES on the
date of the execution of this Agreement and the current plans of IES; but it is
also the intent of IES and the Company Stockholder that such covenants be
construed and enforced in accordance with the changing activities, business, and
locations of IES and its subsidiaries throughout the term of this covenant.
During the term of this covenant, if IES or one of its subsidiaries engages in
new and different activities, enters a new business, or establishes new
locations for its current activities or business in addition to or other than
the activities or business it is currently conducting in the locations currently
established therefor, then the Company Stockholder will be precluded from
soliciting the customers or employees of such new activities or business or from
such new location and from directly competing with such new activities or
business within 100 miles of its then-established operating location(s) through
the term of these covenants.
SECTION 7.4. SEVERABILITY; REFORMATION. The covenants in this Article
VII are severable and separate, and the unenforceability of any specific
covenant shall not affect the continuing validity and enforceability of any
other covenant. In the event any court of competent jurisdiction shall determine
that the scope, time or territorial restrictions set forth in this Article VII
are unreasonable, then it is the intention of the parties that such restrictions
be enforced to the fullest extent which the court deems reasonable, and this
Agreement shall thereby be reformed.
SECTION 7.5. MATERIAL AND INDEPENDENT COVENANTS. The Company
Stockholder acknowledges that his agreements with the covenants set forth in
this Article VII are material conditions to IES' agreement to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
All of the covenants in this Article VII shall be construed as an agreement
independent of any other provision in this Agreement, and the existence of any
claim or
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cause of action of the Company Stockholder against IES or one of its
subsidiaries, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by IES of such covenants. It is
specifically agreed that the two (2) year period during which the agreements and
covenants of the Company Stockholder made in this Article VII shall survive
shall be computed by excluding from such computation any time during which the
Company Stockholder is in violation of any provision of this Article VII. The
covenants contained in this Article VII shall not be affected by any breach of
any other provision hereof by any party hereto.
SECTION 7.6. MATERIALITY. The Company and the Company Stockholder
hereby agree that this covenant is a material and substantial part of this
transaction.
ARTICLE VIII
APPLICABLE SECURITIES LAWS/TRANSFER RESTRICTIONS
SECTION 8.1. COMPANY STOCKHOLDER'S REPRESENTATIONS AND WARRANTIES
CONCERNING SECURITIES. As of the date hereof (which is the same date as the
Effective Time), the Company Stockholder hereby makes the following
representations and warranties to and for the benefit of IES: (i) that the
Company Stockholder has been provided with copies of the Prospectus and annual
report and have been provided as much time and opportunity as he deemed
appropriate to review and study such Prospectus, and to consult with IES
regarding the merits and risks of the transactions contemplated by this
Agreement; (ii) that the Company Stockholder has had adequate opportunity to ask
questions of and receive answers from the officers of IES pertaining to the
purchase of the IES Common Stock pursuant to the Merger, and (iii) all such
questions have been answered to the satisfaction of the Company Stockholder. The
Company Stockholder is able to bear the economic risk of an investment in the
IES Common Stock and can afford to sustain a total loss of such investment. The
Company Stockholder has such knowledge and experience in financial and business
matters that it, she or he is capable of evaluating the merits and risks of the
proposed investment and therefore has the capacity to protect its, her or his
own interests in connection with the acquisition of the IES Common Stock
pursuant hereto.
SECTION 8.1. TRANSFER RESTRICTIONS. Unless otherwise agreed by IES,
except for transfers to immediate family members who agree to be bound by the
restrictions set forth in this Section 8.2 (or trusts for the benefit of the
Company Stockholder or family members, or trust in which the Company Stockholder
is both the grantor and the beneficiary, the trustees of which so agree), the
Company Stockholder shall not sell, assign, exchange, transfer, appoint, or
otherwise dispose of any shares of IES Common Stock received by the Company
Stockholder pursuant to this Agreement. The restriction set forth in this
Section 8.2 shall expire with respect to 20% of the IES Common Stock on the
first anniversary, 40% of the IES Common Stock on the second anniversary and 40%
of the IES Common Stock on the third anniversary of the Effective Time. The
certificates evidencing the IES Common Stock delivered to the Company
Stockholder pursuant to this Agreement will bear a legend substantially in the
form set forth below and containing such other information as IES may deem
necessary or appropriate:
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THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, ASSIGNED,
EXCHANGED, TRANSFERRED, DISTRIBUTED, APPOINTED OR OTHERWISE DISPOSED OF
WITHOUT THE WRITTEN CONSENT OF IES, AND THE ISSUER SHALL NOT BE
REQUIRED TO GIVE EFFECT TO ANY ATTEMPTED SALE, ASSIGNMENT, EXCHANGE,
TRANSFER, DISTRIBUTION, APPOINTMENT OR OTHER DISPOSITION PRIOR TO THE
DATES SPECIFIED IN THE AGREEMENT. FOLLOWING SUCH DATES THE ISSUER
AGREES TO REMOVE THE RESTRICTIVE LEGEND (AND ANY STOP ORDER PLACED WITH
THE TRANSFER AGENT) UPON THE WRITTEN REQUEST OF THE HOLDER OF THIS
CERTIFICATE.
ARTICLE IX
NONDISCLOSURE OF CONFIDENTIAL INFORMATION
SECTION 9.1. GENERAL. The Company Stockholder recognizes and
acknowledges that he had in the past, currently have, and in the future may
possibly have, access to certain confidential information of the Company or the
Surviving Corporation, such as lists of customers or employees, operational
policies, and pricing and cost policies that are valuable, special, and unique
assets of the Company and will be valuable, special, and unique assets of the
Surviving Corporation. The Company Stockholder agrees that he will not disclose
such confidential information to any Person for any purpose or reason whatsoever
(except such information as the Company Stockholder may be required to disclose
to any Governmental Authority or to authorized representatives of IES). In the
event of a breach or threatened breach by the Company Stockholder of the
provisions of this Section, IES shall be entitled to an injunction restraining
the Company Stockholder from disclosing, in whole or in part, such confidential
information. Nothing herein shall be construed as prohibiting IES from pursuing
any other available remedy for such breach or threatened breach, including the
recovery of damages.
SECTION 9.2. EQUITABLE RELIEF. Because of the difficulty of measuring
economic losses as a result of the breach of the foregoing covenants, and
because of the immediate and irreparable damage that would be caused for which
the Company, the Surviving Corporation, and/or IES would have no other adequate
remedy, the Company Stockholder agrees that the foregoing covenants may be
enforced against him by injunctions, restraining orders, and other equitable
actions and agrees to waive any requirement for the securing or posting of any
bond in connection with the obtaining of any such injunctive or other equitable
relief.
SECTION 9.3. NON-PUBLIC INFORMATION. The Company Stockholder hereby
acknowledges that if he becomes aware of "material non-public information" (as
defined under applicable securities laws) regarding IES, that he will be
required, under applicable securities laws, to refrain from trading in IES
securities or disclosing any such information while such information is
non-public. The Company Stockholder further agrees to communicate such
requirement to all personnel of the Company, the Surviving Corporation or
others, having knowledge of such "material non-public information" regarding
IES.
SECTION 9.4. SURVIVAL. The obligations of the parties under this
Article IX shall survive the termination of this Agreement.
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ARTICLE X
MISCELLANEOUS
SECTION 10.1. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas without reference to
the choice of law principles thereof.
SECTION 10.2. ENTIRE AGREEMENT. This Agreement, together with the
Schedules and Exhibits hereto, constitute the entire agreement between the
parties with respect to the subject matter hereof, and there are no agreements,
understandings, representations, or warranties, either written or oral, between
the parties other than those set forth or referred to herein.
SECTION 10.3. EXPENSES AND FEES. All costs and expenses incurred in
connection with this Agreement shall be paid by the party incurring such cost or
expense.
SECTION 10.4. NOTICES. All notices hereunder shall be sufficient upon
receipt for all purposes hereunder if in writing and delivered personally, sent
by documented overnight delivery service or, to the extent receipt is confirmed,
telecopy, telefax, or other electronic transmission service to the appropriate
address or number as set forth below.
If to IES or Acquisition, to:
Integrated Electrical Services, Inc.
000 Xxxx Xxx Xxxx., Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxxxx
Fax Number: (000) 000-0000
if to the Company or the Company Stockholder, to:
Xxxxxx Electrical Contractors, Inc.
0000-X Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxx
Fax Number: (000) 000-0000
SECTION 10.5. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that no party may assign, delegate,
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party hereto, except IES or Acquisition may
transfer or assign, in whole or from time to time in part, to one or more of
their affiliates, the right to enter into the transactions contemplated by this
Agreement, but any such transfer or assignment will not relieve IES or
Acquisition of its obligations hereunder. This Agreement is not intended to
confer upon any Person not a party hereto any rights or remedies hereunder, and
no Person other than the
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37
parties hereto or such Persons described above is entitled to rely on any
representation, warranty, or covenant contained herein.
SECTION 10.6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations, warranties, covenants and agreements of the parties made herein
and at the time of the Closing or in writing delivered pursuant to the
provisions of this Agreement shall survive the consummation of the transactions
contemplated hereby and any examination on behalf of the parties for a period of
twenty-four months after the Effective Time, and shall not be limited with
respect to Section 3.2, Section 3.18 or Section 3.19, pending claims at the
Effective Time and fraudulent misrepresentations or fraudulent acts.
SECTION 10.7. HEADINGS; DEFINITIONS. The Section and Article headings
contained in this Agreement are inserted for convenience of reference only and
will not affect the meaning or interpretation of this Agreement. All references
to Sections or Articles contained herein mean Sections or Articles of this
Agreement unless otherwise stated. All capitalized terms defined herein are
equally applicable to both the singular and plural forms of such terms.
SECTION 10.8. AMENDMENTS AND WAIVERS. This Agreement may not be
modified or amended except by an instrument or instruments in writing signed by
the party against whom enforcement of any such modification or amendment is
sought. Any party hereto may, only by an instrument in writing, waive compliance
by any other party hereto with any term or provision of this Agreement on the
part of such other party hereto to be performed or complied with. The waiver by
any party hereto of a breach of any term or provision of this Agreement shall
not be construed as a waiver of any subsequent breach.
SECTION 10.9. CONSTRUCTION OF CERTAIN PROVISIONS. It is understood and
agreed that the specification of any dollar amount in the representations and
warranties contained in this Agreement or the inclusion of any specific item in
the Schedules or Exhibits is not intended to imply that such amounts or higher
or lower amounts, or the items so included or other items, are or are not
material, and no party shall use the fact of the setting of such amounts or the
fact of the inclusion of any such item in the Schedules in any dispute or
controversy between the parties as to whether any obligation, item, or matter
not described herein or included in a Schedule or Exhibit is or is not material
for purposes of this Agreement. It is agreed that neither party shall allege
that a provision of this Agreement shall be construed against a party because
such party drafted such provision.
SECTION 10.10. SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal, or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal, or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated by this
Agreement are fulfilled to the extent possible.
SECTION 10.11. JURISDICTION. Any legal action, suit, or proceeding in
law or equity arising out of or relating to this Agreement and transactions
contemplated by this Agreement may only be instituted in any state or federal
court in Xxxxxx County, Houston, Texas, and each party agrees not
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38
to assert, by way of motion, as a defense, or otherwise, in any such action,
suit, or proceeding, any claim that it is not subject personally to the
jurisdiction of such court, that its property is exempt or immune from
attachment or execution, that the action, suit, or proceeding is brought in an
inconvenient forum, that the venue of the action, suit, or proceeding is
improper or that this Agreement, or the subject matter hereof or thereof may not
be enforced in or by such court. Each party further irrevocably submits to the
jurisdiction of any such court in any such action, suit, or proceeding. Any and
all service of process and any other notice in any such action, suit, or
proceeding shall be effective against any party if given by registered or
certified mail, return receipt requested, or by any other means of mail which
requires a signed receipt, postage prepaid, mailed to such party at the address
listed in Section 10.4. Nothing herein contained shall be deemed to affect the
right of any party to serve process in any manner permitted by law.
SECTION 10.12. SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof in addition to any other
remedy to which they are entitled at law or in equity.
SECTION 10.13. COUNTERPARTS; EFFECTIVENESS. This Agreement may be
executed in one or more counterparts, all of which shall be considered one and
the same agreement, and shall become effective when one or more counterparts
have been signed by each of the parties and delivered to the other party. In
making proof of this Agreement, it shall not be necessary to produce or account
for more than one such counterpart. A telecopied facsimile of an executed
counterpart of this Agreement shall be sufficient to evidence the binding
agreement of each party to the terms hereof. However, each party agrees to
promptly deliver to the other parties an original, duly executed counterpart of
this Agreement.
SECTION 10.14. MUTUAL INDEMNIFICATION AGAINST CLAIMS OF BROKERS. Each
party agrees to indemnify the other against all loss, cost, damages or expense
arising out of claims for fees or commissions of brokers employed or alleged to
have been employed by such party.
SECTION 10.15. DEFINITIONS AND USAGE. For the purposes of this
Agreement:
"368 Reorganization" shall have the meaning specified in
Section 3.22.
"1933 Act" shall have the meaning specified in Section 3.5.
"1934 Act" shall have the meaning specified in Section 4.4.
"Acquisition" shall have the meaning specified in the
introductory paragraph of this Agreement.
"Actions" shall mean any actions, suits, arbitrations,
inquiries, proceedings or investigations by or before any Governmental
Authority.
"affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under
common control with such Person.
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39
"Agreement" shall have the meaning specified in the
introductory paragraph of this Agreement and Plan of Merger.
"Annual Report" shall have the meaning specified in
Section 4.5(d).
"CERCLA" shall have the meaning specified in Section 3.18.
"Certificates" shall have the meaning specified in
Section 1.3.
"Certificates of Merger" shall have the meaning specified in
Section 1.1(b).
"Closing" shall have the meaning specified in Section 1.1(d).
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and any successor thereto.
"Commitment" shall have the meaning specified in
Section 3.2(a).
"Company" shall have the meaning specified in the introductory
paragraph of this Agreement.
"Company Benefit Plans" shall have the meaning specified in
Section 3.20(a).
"Company Common Stock" shall have the meaning specified in
Section 1.2(a).
"Company Material Adverse Effect" shall mean any fact,
circumstance, event, or condition which has or would have a materially
adverse effect on the business, operations, properties, condition
(financial or otherwise), assets, liabilities, results of operations or
prospects of the Company, taken as a whole.
"Company Pension Plans" shall have the meaning specified in
Section 3.20(a).
"Company Returns" shall mean all returns, declarations,
reports, statements, and other documents required to be filed by the
Company in respect of Taxes, and the term "Company Return" means any
one of the foregoing Company Returns.
"Company Shares" shall have the meaning specified in
Section 3.2(a).
"Company Stock" shall have the meaning specified in
Section 1.2(a).
"Company Stockholder" shall have the meaning specified in
the introductory paragraph of this Agreement.
"Company Audited Balance Sheet Date" shall have the meaning
specified in Section 3.7.
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"Company Financial Statements" shall have the meaning
specified in Section 3.6.
"Damages" shall have the meaning specified in Section 6.1.
"Delaware Law" shall have the meaning specified in
Section 1.1(a).
"Department" shall have the meaning specified in Section 5.13.
"disposal" or "disposed" shall have the meaning specified in
Section 3.18.
"Effective Time" shall have the meaning specified in
Section 1.1(b).
"Employment Agreement" shall have the meaning specified in
Section 1.6(a)(i).
"Environmental Laws" shall have the meaning specified in
Section 3.18.
"ERISA" shall have the meaning specified in Section 3.20(a).
"FTC" shall have the meaning specified in Section 5.13.
"GAAP" shall have the meaning specified in Section 3.6.
"Georgia Law" shall have the meaning specified in
Section 1.1(a).
"Governmental Authority" shall mean (a) the United States of
America, (b) any state, county, municipality, or other governmental
subdivision within the United States of America, and (c) any court or
any governmental department, commission, board, bureau, agency, or
other instrumentality of the United States of America or of any state,
county, municipality, water rights, taxing, or zoning authority, or
other governmental subdivision within the United States of America.
"IES" shall have the meaning specified in the introductory
paragraph of this Agreement.
"IES Common Stock" shall have the meaning specified in
Section 1.2(a).
"IES Indemnitees" shall have the meaning specified in
Section 6.1.
"IES Material Adverse Effect" shall mean any fact,
circumstance, event, or condition which has or would have a materially
adverse effect on the business, operations, properties, condition
(financial or otherwise), assets, liabilities, results of operations or
prospects of IES and its subsidiaries, taken as a whole.
"IES SEC Filings" shall have the meaning specified in
Section 4.5(a).
"Indemnitee" shall have the meaning specified in Section 6.4.
"Indemnitee Claim" shall have the meaning specified in
Section 6.4.
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41
"Indemnitor" shall have the meaning specified in Section 6.4.
"Knowledge" when used in relation to any Person shall mean the
actual (but not constructive) knowledge of such Person or such Person's
officers after reasonable inquiry.
"Licenses" shall have the meaning specified in Section 3.11.
"Liens" shall mean all liens, mortgages, security interests,
pledges, equities, claims, options, and other encumbrances of any kind.
"Merger" shall have the meaning specified in Section 1.1(a).
"Merger Consideration" shall have the meaning specified in
Section 1.2(a).
"officer" means in the case of IES and the Company, any
executive officer of IES or the Company, as applicable, within the
meaning of Rule 3b-7 of the 1934 Act.
"Person" shall mean an individual, partnership, corporation,
limited liability company, trust, incorporated or unincorporated
association, joint venture, joint stock company, Governmental Authority
or other legal entity of any kind.
"Prospectus" shall have the meaning specified in
Section 4.5(d).
"Qualified Plans" shall have the meaning set forth in
Section 3.20(b).
"RCRA" shall have the meaning specified in Section 3.18.
"release" shall have the meaning specified in Section 3.18.
"SEC" shall have the meaning specified in Section 4.5.
"Shares" shall have the meaning specified in Section 3.23(b).
"Stockholder Indemnitee" shall have the meaning specified in
Section 6.3.
"subsidiary" means, with respect to any Person, any entity of
which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other Persons
performing similar functions are at any time directly or indirectly
owned by such Person.
"Surviving Corporation" shall have the meaning specified in
Section 1.1(a).
"Tax" or "Taxes" shall have the meaning specified in
Section 3.19(a).
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"Territory" shall have the meaning specified in
Section 7.1(a).
"third party" shall have the meaning specified in Section 6.4.
A reference in this Agreement to any statute shall be to such
statute as amended from time to time, and the rules and regulations promulgated
thereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
INTEGRATED ELECTRICAL SERVICES, INC.
By: /s/ XXXX X. XXXXXXXX
------------------------------------
Xxxx X. Xxxxxxxx, Senior Vice President
XXXXXX ACQUISITION CORPORATION
By: /s/ XXXX X. XXXXXXXX
------------------------------------
Xxxx X. Xxxxxxxx, Assistant Secretary
XXXXXX ELECTRICAL CONTRACTORS, INC.
By: /s/ XXXXXX XXXXXX
------------------------------------
Xxxxxx Xxxxxx, President
/s/ XXXXXX XXXXXX
------------------------------------
Xxxxxx Xxxxxx, Company Stockholder
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