Exhibit 10.1
STOCK PURCHASE AGREEMENT
Relating to the
Purchase of the Capital Stock of
Georgia Electric Company
a Georgia Corporation
TABLE OF CONTENTS
Page
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Definitions.................................................... 1
1.1 Definitions........................................ 1
1.2 Construction....................................... 4
Purchase and Sale of Shares.................................... 4
2.1 Shares............................................. 4
2.2 Initial Purchase Price............................. 4
2.3 Earn-Out Consideration............................. 4
2.4 Adjustment of Purchase Price....................... 6
2.5 Disputes with Respect to Post-Closing Purchase
Price Adjustment or Earn-out Consideration......... 7
Closing, Delivery of Shares.................................... 8
3.1 Location........................................... 8
3.2 Outside Closing Date............................... 8
3.3 Deliveries at Closing.............................. 8
3.4 Simultaneous Closing............................... 9
Representations and Warranties of Sellers...................... 9
4.1 Corporate Status of the Company.................... 9
4.2 Legal Capacity of Sellers.......................... 10
4.3 Authority Concerning this Agreement................ 10
4.4 Binding Effect..................................... 10
4.5 Shares; Capitalization............................. 10
4.6 Subsidiaries and Investments....................... 10
4.7 Title to Assets.................................... 10
4.8 No Violation....................................... 11
4.9 Financial Statements............................... 11
4.10 Liabilities........................................ 11
4.11 No Adverse Change.................................. 11
4.12 Taxes.............................................. 12
4.13 Real Property...................................... 13
4.14 Environmental Matters.............................. 13
4.15 Intellectual Property.............................. 14
4.16 Contracts, Leases and Commitments; Customers
and Suppliers...................................... 15
4.17 Inventory.......................................... 15
4.18 Accounts Receivable................................ 15
4.19 Permits; Compliance with Law....................... 15
4.20 Employees.......................................... 16
4.21 Employee Benefit Plans............................. 16
4.22 Insurance.......................................... 18
4.23 Litigation......................................... 19
4.24 Transactions with Affiliates....................... 19
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4.25 Books and Records.................................. 19
4.26 Improper Payments.................................. 19
4.27 Officers and Directors; Bank Accounts, etc......... 19
4.28 No Misstatements................................... 20
4.29 Backlog............................................ 20
4.30 Securities Laws.................................... 20
Representations and Warranties of Buyer and Able Telcom........ 20
5.1 Corporate Status of Buyer and Able Telcom.......... 20
5.2 Authority Concerning this Agreement................ 20
5.3 No Violation....................................... 21
5.4 Securities......................................... 21
Covenants of Seller............................................ 21
6.1 Current Leases..................................... 21
6.2 Access to Properties and Records................... 21
6.3 Election under Code Section 338(h)(10)............. 22
6.4 Environmental...................................... 22
6.5 Change of Information.............................. 22
6.6 Standstill......................................... 22
Covenants of Buyer and Able Telcom............................. 22
7.1 Election under ss. 1362(e)......................... 22
7.2 Confidentiality.................................... 23
7.3 Conduct of Business Prior to the Closing........... 23
7.4 Employee Stock Options............................. 23
7.5 Negative Covenants................................. 23
Miscellaneous Provisions....................................... 24
8.1 Nature and Survival of Representations and
Warranties......................................... 24
8.2 Further Actions.................................... 24
8.3 Brokers............................................ 24
8.4 Indemnification.................................... 24
8.5 Notices............................................ 26
8.6 Miscellaneous...................................... 27
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THIS STOCK PURCHASE AGREEMENT ("Agreement") is dated as of October 12,
1996, by and between Traffic Management Group, Inc., a Florida corporation
("Buyer); Able Telcom Holding Corp., a Florida corporation ("Able Telcom"), each
of Buyer and Able Telcom having its principle place of business at ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇; ▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
each an individual resident of ▇▇▇▇▇▇▇▇▇ County, Georgia (collectively,
"Sellers"); and Georgia Electric Company, a Georgia corporation having its
principal place of business at ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ (the
"Company").
R E C I T A L S
WHEREAS, the Company is engaged in the business of (a) installing, testing
and maintaining intelligent highway and communication systems, including
computerized traffic management systems, wireless and fiber optic data networks,
weather sensors, voice, data and video systems, and (b) installing and
maintaining industrial equipment and control systems (the "Business").
WHEREAS, the parties have entered into a letter of intent dated September
18, 1996 (the "Letter of Intent") providing for, among other things, the
purchase by Buyer of all of the existing capital stock of the Company,
consisting of 450 shares of common stock, par value $100 per share (the
"Shares")
WHEREAS, Sellers wish to sell, and Buyer wishes to purchase, the Shares
for the purchase price and upon the terms and subject to the conditions
described in this Agreement, as contemplated by the Letter of Intent.
NOW, THEREFORE, in consideration of the premises and the mutual promises,
terms, and conditions herein made, the parties, intending to be legally bound,
agree as follows:
ARTICLE I
Definitions
1.1 Definitions. As used in this Agreement, the following terms have the
meanings specified in this Section 1.1. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP.
(a) "Able Telcom Shares" means shares of common stock of Able Telcom, par
value $.01 per share.
(b) "Actual Pre-tax Margin" has the meaning given that term
in Section 2.3(b)(iii).
(c) "Actual Pre-tax Income" has the meaning given that term
in Section 2.3(b)(iv).
(d) "Audited Balance Sheet" has the meaning given that term
in Section 4.9.
(e) "Audited Balance Sheet Date" has the meaning given that term in
Section 4.9.
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(f) "Buyers' Documents" means this Agreement and any other agreements,
notes, certificates, exhibits, schedules and documents executed or delivered or
to be executed or delivered by either Buyer in connection herewith.
(g) "Cash Consideration" has the meaning given that term in
Section 2.2
(h) "CERCLA" means the Comprehensive Environmental Response Compensation
and Liability Act of 1980, 42 U.S.C. Sections 6901 et seq., as amended.
(i) "CERCLIS" means the Comprehensive Environmental Response
Compensation Liability Information System List pursuant to CERCLA.
(j) "Closing" has the meaning given that term in Section 3.1
(k) "Closing Date" has the meaning given that term in Section
3.1
(l) "Closing Trial Balance Sheet" has the meaning given that term in
Section 2.4(a).
(m) "Closing Balance Sheet" has the meaning given that term
in Section 2.4
(n) "Closing of the Escrow" has the meaning given that term
in the Escrow Agreement.
(o) "COBRA" means the Consolidated Omnibus Budget and
Reconciliation Act of 1985, as amended.
(p) "Code" means the Internal Revenue Code of 1986, as amended, or any
predecessor or successor federal income tax law.
(q) "Disputing Party" has the meaning given that term in
Section 2.5
(r) "Division" has the meaning given that term in Section
2.3(a).
(s) "Division Statements" has the meaning given that term in
Section 2.3(a).
(t) "Earn-Out Consideration" has the meaning given that term
in Section 2.3(b).
(u) "Encumbrance" means any liability, debt, mortgage, security interest,
lien, claim, encumbrance, title defect, pledge, charge, assessment, covenant,
encroachment and burdens of any kind or nature whatsoever.
(v) "Environmental Law" means any applicable federal, state, and local
law, regulation or ordinance relative to air quality, water quality, solid waste
management, hazardous or toxic substances or the protection of health or the
environment, including, but not limited to, CERCLA, the Hazardous Material
Transportation Act (49 U.S.C. ss. 1801 et seq.), the Federal Water Pollution
Control act (33 U.S.C. ss. 1251 et seq.), the Resource Conservation and Recovery
Act of 1976, as amended (42 U.S.C. ss. 6901 et seq.), the Clean Air Act, as
amended (42 U.S.C. ss. 7401 et seq.), the Toxic Substances Control Act, as
amended (15 U.S.C. ss. 2601 et seq.), the Federal Insecticide, Fungicide, and
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Rodenticide Act, as amended (7 U.S.C. ss. 136 et seq.), and the Clean Water Act
of 1977, as amended (33 U.S.C. ss. 1251 et seq.), as these laws may have been
amended or supplemented through the Closing Date, and any analogous state or
local statutes and the regulations promulgated pursuant thereto.
(w) "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.
(x) "Escrow Agreement" means the document referred to in
Section 3.3(a)(v).
(y) "Financial Statements" has the meaning given that term in
Section 4.9.
(z) "Funding Date" has the meaning given that term in the
Escrow Agreement.
(aa) "GAAP" means United States generally accepted accounting
principles.
(bb) "Governing Documents" means the certificate or articles of
incorporation, bylaws, deed of trust, formation or governing agreement and other
charter documents or organization or governing documents or instruments.
(cc) "Governmental Body" means any court, government (federal, state,
local or foreign), department, commission, board, bureau,
agency, arbiter appointed pursuant to mandatory provisions of law, official or
other regulatory, administrative or governmental authority or instrumentality.
(dd) "Hazardous Substance" means any hazardous substances or chemical as
defined by any Environmental Law and including petroleum, any petroleum-related
material, crude oil or any fraction thereof and any toxic or polluting substance
or other material hazardous to human health or the environment.
(ee) "Intellectual Property" has the meaning given that term
in Section 4.15.
(ff) "Loss" or "Losses" has the meaning given that term in
Section 8.4(a).
(gg) "PBGC" means the Pension Benefit Guaranty Corporation.
(hh) "Permits" has the meaning given that term in
Section 4.19.
(ii) "Person" means and includes a natural person, a corporation, an
association, a partnership, a limited liability company, a trust, a joint
venture, an unincorporated organization, a business, any other legal entity, or
a Governmental Body.
(jj) "Plans" has the meaning given that term in Section 4.21.
(kk) "Post-Closing Purchase Price Adjustment" has the meaning given that
term in Section 2.4.
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(ll) "Real Property" has the meaning given that term in
Section 4.13.
(mm) "Sellers' Documents" means this Agreement and any other agreements,
notes, certificates, exhibits, schedules and documents executed or delivered or
to be executed or delivered by the Company or either Seller in connection
herewith.
1.2 Construction. As used herein, unless the context otherwise requires: (i)
references to "Article" or "Section" are to an article or section hereof; (ii)
all "Exhibits" and "Schedules" referred to herein are to Exhibits and Schedules
attached hereto and are incorporated herein by reference and made a part hereof;
(iii) "include," "includes" and "including" are deemed to be followed by
"without limitation" whether or not they are in fact followed by such words or
words of like import; and (iv) the table of contents, captions and other
headings of the various articles, sections and other subdivisions hereof are for
convenience of reference only and shall not modify, define or
limit, or affect the interpretation of any of the terms, meaning or
provisions hereof.
ARTICLE II
Purchase and Sale of Shares
2.1 Shares. Subject to the terms and conditions of this Agreement, at the
Closing (as hereafter defined), Sellers shall sell, convey, assign, transfer,
and deliver to Buyer, and Buyer shall purchase from Sellers, all of the Shares,
free and clear of any Encumbrance.
2.2 Initial Purchase Price. In consideration for the Shares and the
covenants, representations and warranties contained in this Agreement, Buyer
shall deliver by wire transfer or otherwise in immediately available funds, an
initial purchase price of $3,000,000 (subject to adjustment as provided herein)
(the "Cash Consideration"). The Cash Consideration includes a Funding Deposit in
the amount of $100,000 delivered at the Closing with the remainder to be paid on
the Funding Date, all in accordance with the terms of this Agreement and the
Escrow Agreement.
2.3 Earn-Out Consideration.
(a) From and after the Closing, and until Buyer's obligations under this
Section 2.3 are satisfied in full, Buyer shall continue the business operations
of the Company as a separate corporate entity (the Company's business and
operations after the Closing are referred to herein as the "Division"). In
connection therewith Buyer shall prepare, using accounting procedures consistent
with the past accounting practices of the Company to the extent that such
practices are consistent with GAAP, unaudited internally generated separate
financial statements for the Division (the "Division Statements"). The Division
Statements shall be based on a fiscal year ending on October 31 (being the same
fiscal year end as Buyer and Able Telcom; all references to "fiscal year" in
this Section 2.3 refer to the fiscal year of the Division ending on October 31).
(b) Based on the Division Statements, with respect to each fiscal year
listed in Column 1 of Section 2.3(b)(ii), Able Telcom shall issue to Sellers (as
set forth in Section 2.3(e)), in addition to the Initial Purchase Price, a
number of Able Common Shares (collectively, the "Earn-out Consideration") in the
amounts and on the terms and conditions as follows:
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(i) The number of Able Telcom Shares comprising the Earn-out
Consideration for each such fiscal year shall be calculated based on the
following formula:
{(AM oversm TM $250,000) + (AI oversm TI $750,000)
EC = --------------------------------------------------
MVx
where:
EC means the number of Able Telcom Shares to be issued as Earn-out
Consideration with respect to the fiscal year
AM means the Division's Actual Pre-tax Margin during the fiscal year,
calculated in accordance with Section 2.3(b)(iii)
TM means the Division's Target Pre-tax Margin listed in Column 2 of
Section 2.3(b)(ii) with respect to the fiscal year
AI means the Company's Actual Pre-tax Income during the fiscal year,
calculated in accordance with Section 2.3(b)(iv)
TM means the Divisions's Target Pre-tax Income listed in Column 3 of
Section 2.3(b)(ii) with respect to the fiscal year
MV means the market value of Able Telcom Shares determined by the
average of the high bid price and the low ask price for Able Telcom
Shares over the 30-day period immediately preceding and the 30-day
period immediately following the ending date of the fiscal year in
question
x equals .75 if the MV is greater than or equal to $7.50; OR, if MV is
less than $7.50, x = 5 / MV (in which case MVx would equal $5).
(ii) For purposes of Section 2.3(b)(i), the Company's Target Pre-tax
Margin and Target Pre-tax Income are as follows:
Column 1 Column 2 Column 3
Fiscal Year Target Pre-tax Target Pre-tax
(ended October 31) Margin Income
1997 10% $2,500,000
1998 10% $2,900,000
1999 10% $3,200,000
2000 10% $3,500,000
2001 10% $3,900,000
(iii) For purposes of Section 2.3(b)(i), the Division's "Actual
Pre-tax Margin" means the percentage obtained by dividing the Division's pre-tax
income during the fiscal year by the
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revenues during such period and multiplying the quotient obtained
thereby by 100.
(iv) For purposes Section 2.3(b)(i), the Division's "Actual Pre-tax
Income" means the Division's base pre-tax income determined in accordance with
GAAP. Actual Income will account for, among other things, depreciation related
to the Division's assets to be "stepped up" to fair market value, a management
fee payable by the Division to Able Telcom in the amount of 2.5% of the
Division's gross revenues, and other reasonable direct costs (such as insurance,
interest, and the like) that are incurred by Able Telcom and attributable to the
Division. The Division Statements used to determine Actual Pre-tax Income shall
be prepared using accounting procedures consistent with the past accounting
practices of the Company to the extent that such practices are consistent with
GAAP.
(c) The Earn-out Consideration for any fiscal year listed in Column 1 of
Section 2.3(b)(ii) shall be issued no later than 90 calendar days after the end
of such fiscal year.
(d) In the event that the Division is sold by Buyer prior to the end of
fiscal year 2001:
(i) Able Telcom shall issue to Sellers a number of Able Telcom Shares
having a market value of $1,000,000 multiplied by the number of fiscal years
after the closing of such sale (including the fiscal year during which such sale
occurs) for which Earn-Out Consideration is payable hereunder (e.g., if the
Division is sold during the fiscal year ending October 31, 1999, stock having a
value of $3,000,000 would be issuable).
(ii) For purposes of Section 2.3(d)(i), the market value of Able
Telcom Shares shall be determined by the average of the high bid price and the
low ask price for Able Telcom Shares over the 30-day period immediately
preceding and the 30-day period immediately following the date of the closing
for the sale of the Division.
(iii) The issuance of Able Telcom shares described in Section
2.3(d)(i) shall be made promptly, but in no event more than 40 business days,
after the closing of the sale of the Division.
(e) Any Earn-out Consideration due and payable under this Section 2.3
shall be allocated to Sellers as follows:
(i) ▇▇▇▇▇ ▇▇▇▇--50%
(ii) ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇--50%
(f) Upon the issuance of shares comprising the Earn-out Consideration,
Sellers and Buyer shall enter into a subscription agreement relating to the
Earn-out Consideration in substantially the form of Exhibit 2.3(f) to this
Agreement.
2.4 Adjustment of Purchase Price.
(a) On or before the Funding Date, Sellers shall prepare an estimated
trial balance sheet as of the Closing Date or September 30, 1996 (as determined
by Ernst & Young, LLP, the Buyer's independed auditors) ("Closing Trial Balance
Sheet") prepared in accordance with GAAP and acceptable to Buyer. The Cash
Consideration Payable hereunder shall be reduced by the amount (the "Cash
Consideration Adjustment") by which the value of the shareholders' equity as set
forth on the Closing Trial Balance Sheet is less than $2,350,000. Without
limiting the generality of the foregoing:
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(i) Liabilities. All liabilities of the Company (whether accrued,
unmatured, contingent, or otherwise and whether due or to become due) will be
adequately reserved against and included in the Closing Trial Balance Sheet.
(ii) Assets. All of the assets of the Company will be reflected on
the Closing Trial Balance Sheet or, under GAAP, will not be required to be
reflected thereon.
(iii) Taxes. All unpaid federal, foreign, state, local, and other
taxes, fees, assessments, duties, and other similar governmental charges
payable by the Company or which will, with the passage of time, become
payable by the Company (including interest and penalties) whether or not
disputed with respect to any period prior to the Audited Balance Sheet Date
will be adequately reserved against in accordance with GAAP and included in
the Closing Trial Balance Sheet. The results of all prior audits by the
Internal Revenue Service and the relevant state, local and foreign tax
authorities will be properly reflected in the Closing Trial Balance Sheet.
(iv) Accounts Receivable. All of the Company's accounts receivable,
together with the allowance for doubtful accounts, will be reflected in the
Closing Trial Balance Sheet in accordance with GAAP. All such accounts
receivable as shown thereof will be bona fide, valid and binding receivables
representing obligations for the face dollar amount thereof and will be
collected in full (subject to the allowance for doubtful accounts as set
forth on the Closing Trial Balance Sheet) within ninety (90) days of their
due date and are subject to no defenses, counterclaims or set-offs of any
nature whatsoever. The allowance for doubtful accounts set forth in the
Closing
Trial Balance Sheet will be fully adequate to cover any losses anticipated on
such receivables.
(b) No later than 60 days after the Closing, Sellers shall cause to be
prepared, at Sellers' expense, an audited balance sheet as of the Closing Date
(the "Closing Balance Sheet"). Within ten days after the receipt of the Closing
Balance Sheet by both Buyer and Sellers, Sellers shall deliver to Buyer an
amount (the "Post Closing Purchase Price Adjustment") by which the value of the
shareholders' equity as set forth on the Closing Balance Sheet is less than the
amount of the shareholders' equity as set forth on the Closing Trial Balance
Sheet. The obligation of Sellers set forth in the previous sentence shall be
joint and several between them. If the amount of shareholders' equity as shown
on the Closing Balance Sheet is greater such amount as shown on the Closing
Trial Balance Sheet, then Buyer shall pay Sellers the amount of such difference
up to the amount of the Cash Consideration Adjustment.
2.5 Disputes with Respect to Post-Closing Purchase Price Adjustment or
Earn-out Consideration. If any disagreement concerning the amount of the
Post-Closing Purchase Price Adjustment or the amount of any portion of the
Earn-Out Consideration, is not resolved by Buyer and Sellers within forty-five
(45) days following the receipt by Sellers of the Closing Balance Sheet, or the
Division Statements as the case may be, the undisputed amount shall be
distributed or paid, as the case may be, on such 45th day as provided in Section
2.4 (in the case of a dispute as to the Post- Closing Purchase Price Adjustment)
or Section 2.3(c) (in the case of a dispute as to the amount of any payment of
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Earn-out Consideration). Within ten business days thereafter, the party
disputing the amount (the "Disputing Party") shall engage (on standard terms and
conditions for a matter of such nature) a regionally recognized firm of
independent accountants to resolve such dispute. The firm of independent
accountants shall be proposed in writing by the Disputing Party to the other
party. The resolution by such independent accounting firm of such dispute shall
be final, binding and conclusive upon the parties. The engagement agreement with
the independent accountants shall require the independent accountants to make
their determination with respect to the items in dispute within 90 days
following their engagement. The Disputing Party shall pay all costs and fees
incurred by both the Disputing Party and the other party to resolve the dispute
(including reasonable attorney's fees) if the independent accountants conclude
that the amount of the Post- Closing Purchase Price Adjustment, or any payment
of Earn-out Consideration, as the case may be, differs by less than 10% from the
amount submitted by the other party; if the difference equals or exceeds 10%,
then the other party shall pay such fees.
ARTICLE III
Closing, Delivery of Shares
3.1 Location. The closing hereunder (the "Closing") shall take place at 10:00
A.M. on the 12th day of October 1996 (the "Closing Date") at the offices of
Holland & Knight, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, N.E., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ (or at such other time and place as may be agreed by
Buyer and Seller).
3.2 Outside Closing Date. The parties shall use their respective best efforts
to close the transactions contemplated by this Agreement on or before October
12, 1996. In the event the Closing has not occurred on or before October 31,
1996, the Sellers (acting together) or the Buyer may terminate its obligations
under this Agreement by notice to the other. Upon such termination, neither of
the parties shall have any liability or obligation to the other under this
Agreement, except for any liability resulting from a breach thereof. In no event
may one Seller terminate his obligations under this Agreement unless both
Sellers so act.
3.3 Deliveries at Closing.
(a) By Sellers and the Company. Contemporaneously herewith,
the Sellers and the Company shall deliver the documents listed
below:
(i) Opinion of Counsel. The opinion of counsel to Seller dated the
Closing Date, addressed to Buyer, in the form of Exhibit 3.3(a)(i) hereto.
(ii) Consents and Approvals. Any written consents, waivers, permits
and approvals from third parties, or any Governmental Body or administrative
authorities, in form and substance satisfactory to Buyer; all notices and
other governmental filings necessary to transfer any of the Shares or to
otherwise consummate the transactions contemplated hereby including, without
limitation, any consents necessary to transfer and continue in effect all
contracts listed on any Schedule to this Agreement as in effect on the date
hereof.
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(iii) Trial Balance Sheet. An interim estimated trial balance sheet
dated as of September 30, 1996 that indicates that the shareholders' equity
of the Company is at least $2,350,000 and that the Company has a minimum net
working capital (current assets less current liabilities) of $1,000,000
consisting of at least $450,000 of cash.
(iv) Employment Agreements. Employment Agreements in
substantially the form attached as Exhibit 3.3(a)(iv) to this
Agreement.
(v) Escrow Agreement. An Escrow Agreement attached
hereto as Exhibit 3.3(a)(v).
(vi) Other Documents. Such other certificates,
instruments and other documents as Buyer shall reasonably
require in connection with the transactions contemplated by this
Agreement.
(b) By Buyer and Able Telcom. Contemporaneously herewith,
the Buyer and Able Telcom shall deliver the documents listed below:
(i) Opinion of Counsel. The opinion of Holland & Knight counsel to
Buyer, dated the Closing Date, addressed to Sellers in substantially the form
as Exhibit 3.3(b)(i) hereto.
(ii) Employment Agreements. Employment Agreements in
substantially the form attached as Exhibit 3.3(a)(iv) to this
Agreement.
(iii) Escrow Agreement. An Escrow Agreement attached
hereto as Exhibit 3.3(a)(v).
(iv) Other Documents. Such other certificates,
instruments and other documents as Sellers shall reasonably
require in connection with the transactions contemplated by this
Agreement.
3.4 Simultaneous Closing. All deliveries shall be deemed to
be undertaken simultaneously and no delivery shall be deemed to
have occurred unless and until all other required deliveries have
taken place.
ARTICLE IV.
Representations and Warranties of Sellers
and the Company
Sellers and the Company represent, warrant and agree, as follows:
4.1 Corporate Status of the Company. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Georgia. The Company is qualified to do business and in good standing in each
jurisdiction where the operation of its business requires that it be so
qualified. The Company has all requisite corporate power and authority to own,
operate and lease its properties and assets, to conduct its
9
business as it is now being conducted, to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby.
4.2 Legal Capacity of Sellers. Sellers each have the legal capacity to own
and hold the Shares and to execute, deliver and perform their respective
obligations under this Agreement and to consummate the transactions contemplated
hereby.
4.3 Authority Concerning this Agreement. The execution, delivery and
performance by the Company of this Agreement and any Sellers' Document executed
by the Company, and the consummation of the transactions contemplated hereby and
thereby, have been duly and validly authorized and approved by all necessary
corporate action of the Company.
4.4 Binding Effect. This Agreement is (and, when executed and delivered, each
Sellers' Document will be) valid and binding upon the Company and the Sellers
and enforceable, in accordance with their respective terms, against the Company
and the Sellers except to the extent that enforcement thereof may be limited by
applicable bankruptcy, reorganization, insolvency or moratorium laws, or other
laws affecting the enforcement of creditors' rights or by the principles
governing the availability of equitable remedies.
4.5 Shares; Capitalization. The authorized capital stock of the Company
consists solely of 2,500 shares of common stock, $100 par value per share, of
which 450 shares are issued and outstanding. No shares of capital stock are held
in the Company's treasury. All of the Shares are owned of record, legally and
beneficially by Sellers in amounts set forth on Schedule 4.5 hereof. The Shares
are free and clear of any and all Encumbrances, and upon delivery of the Shares
hereunder, Buyer will acquire title thereto, free and clear of any and all
Encumbrances. Other than voting rights, redemption rights and such other rights
conferred by the Company's charter documents and by applicable Georgia statutes,
there exist no Securities Rights with respect to the Shares. All rights and
powers to vote the Shares are held exclusively by Sellers. All of the Shares are
validly issued, fully paid and nonassessable, were not issued in violation of
the terms of any agreement or other understanding, and were issued in compliance
with all applicable federal and state securities or "blue sky" laws and
regulations. The certificates representing the Shares to be delivered to Buyer
at the Closing are, and the signatures and endorsements thereof or stock powers
relating thereto will be valid and genuine.
4.6 Subsidiaries and Investments. Except as set forth on
Schedule 4.6 the Company does not own or control (directly or
indirectly), nor has it ever owned or controlled (directly or
indirectly), any shares of capital stock of or other equity interest in any
corporation, partnership, joint venture or other entity. Neither seller owns or
controls (directly or indirectly) any interest in any corporation, partnership,
joint venture or other entity which is a competitor or potential competitor of
the Company.
4.7 Title to Assets. Except as described in Schedule 4.7 hereto, the Company
has good and marketable title to all its assets (or, with respect to any real or
personal property leases, a valid leasehold interest therein), free and clear of
any and all Encumbrances. The Company's assets constitute all of the assets that
are used in connection with, necessary for, or beneficial to the operation of
the Business. All of the assets of the Company are reflected on the Audited
Balance Sheet or, under GAAP, are not required to be reflected thereon.
10
4.8 No Violation. The authorization, execution, delivery, and performance of
this Agreement and any Sellers' Document, and the consummation of the
transactions as contemplated hereby and thereby, do not and will not (1) violate
any of the provisions of the Governing Documents of the Company; (2) violate,
conflict with, result in the breach of or constitute a default under, require
any notice or consent under, give rise to a right of termination of, or
accelerate the performance required by, any terms or provisions of any material
agreement, instrument, or writing of any nature to which the Company is a party
or is bound; or (3) violate, or result in the breach of, conflict with, or
require any notice, filing or consent under any statute, rule, regulation or
other provision of law, or any order, judgment or other direction of a court or
other tribunal, or any other governmental requirement, permit, registration,
license or authorization applicable to the Company, or any of its assets or the
Business; or (4) result in the creation of any lien, claim, encumbrance, or
restriction on any of the Company's assets. Neither Seller is, and the Company
is not, party to any non-competition or similar agreement which in any way
restricts the operation of the Business.
4.9 Financial Statements. Schedule 4.9 contains true copies of the balance
sheets of the Company as December 31, 1995 and December 31, 1994, and the
related statements of income, and retained earnings and statements of cash flows
for the fiscal years ended December 31, 1995 and 1994 as audited by ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ & ▇▇▇, Certified Public Accountants (collectively, the "Financial
Statements"; the Company's balance sheet as at December 31, 1995 is hereinafter
referred to as the "Audited Balance Sheet" and December 31, 1995 as the "Audited
Balance Sheet Date"). Each of the forego ing Financial Statements is complete
and correct, is in accordance with the Company's books and records, has been
prepared in accordance with GAAP and presents fairly the financial position,
and the results of operations and cash flows of the Company as of
the dates and for the fiscal periods indicated.
4.10 Liabilities. All liabilities of the Company (whether accrued, unmatured,
contingent, or otherwise and whether due or to become due) are either set forth
on Schedule 4.10 or adequately reserved against and included in the Audited
Balance Sheet, in accordance with GAAP, except for liabilities incurred since
the Audited Balance Sheet Date in the ordinary course of business as theretofore
conducted that are not materially adverse to the operations or prospects of the
Business.
4.11 No Adverse Change. Since the Audited Balance Sheet Date, the Company has
operated its business diligently and only in the ordinary course of business as
theretofore conducted, and the Company has not and through the Closing Date, the
Company shall not have:
(a) failed to maintain its books, accounts and records in the usual,
regular and ordinary manner and in accordance with good business practices and
consistent with past practice;
(b) experienced any strike or work stoppage or slowdown or loss of
employees or customers which adversely affects or could adversely affect the
Company or the Business or operations of the Company;
11
(c) to the best of Sellers' and the Company's knowledge, suffered any
material adverse effects to the Business, assets, or prospects of the Company as
a result of the adoption of any statute, rule, regulation or order;
(d) except for the incentive compensation arrangements set forth in
Schedule 4.11(d) incurred any general increase in the compensation of, or
benefits for, employees or independent contractors performing services for the
Company (including, without limitation, any increase pursuant to any bonus,
pension, profit-sharing or other plan or commitment); nor, specifically, granted
any increase in any compensation or benefits payable to any individual officer,
manager, employee, consultant, agent or broker of the Company having annual
remuneration in excess of $10,000;
(e) incurred any commitments for the future purchase of goods or services
involving more than $25,000 other than purchase orders placed in the ordinary
course of business.
(f) incurred any accepted purchase order or quotation, arrangement or
understanding for the future sale of services or products of the Company that
has not shown a gross profit or which the Company expects will not be
profitable;
(g) suffered any loss (or become aware of any prospective loss) of
revenues attributable to contracts from ▇▇▇▇▇▇ Tire & Rubber Company or M&M/Mars
in the aggregate on an annualized basis.
(h) except for distributions to shareholders, suffered any material
adverse change in the financial condition or results of operations of the
Company or its assets, liabilities, earnings, properties, net worth, business,
operations.
4.12 Taxes. The Company has properly filed all federal, foreign, state,
local, sale, use and other tax returns and reports which are required to be
filed by it; all of the foregoing are true, correct, and complete; and all
taxes, interest, and penalties due and payable as shown on such returns or
claimed to be due by any taxing authority have been timely paid. All unpaid
federal, foreign, state, local, and other taxes, fees, assessments, duties, and
other similar governmental charges payable by the Company or which will, with
the passage of time, become payable by the Company (including interest and
penalties) whether or not disputed with respect to any period prior to the
Audited Balance Sheet Date, except as set forth on Schedule 4.12 have been
adequately reserved against in accordance with GAAP and included in the Audited
Balance Sheet. There are no outstanding waivers or extensions of time with
respect to the assessment or audit of any tax or tax return of the Company, or
claims now pending or matters under discussion with any taxing authority in
respect of any tax of the Company. The Company has furnished to Buyer true
copies of the federal, foreign, state, and local tax returns of the Company for
the three fiscal years ended on Audited Balance Sheet Date. Buyer will not incur
or be obligated for, and the assets of the Company will not be subject to, any
sales, use or other tax or excise in connection with the acquisition of the
Shares. Except as set forth on Schedule 4.12, the Company has not received any
notice of any failure to file any such return or report or failure to pay any
taxes or assessments. The Company is not the subject of any pending or
threatened tax examination nor is the Company a party to any proceeding or
inquiry by any government for the assessment or the proposed assessment or for
the collection of taxes, or interest or penalties with respect thereto, nor has
12
any claim for the assessment or proposed assessment or for the collection of
taxes, or interest or penalties with respect thereto, been asserted against the
Company. There are no liens for taxes that are due and unpaid on any of the
properties or assets of the Company. The United States Federal income tax
returns of, and the state, local and foreign tax returns filed by the Company
have not been audited by the United States Internal Revenue Service or the
relevant state, local and foreign tax authorities for any fiscal years of the
Company ended on or after April 30, 1991, which are the only fiscal years which
are open and subject to audit or for which the statutes of limitations for
claims for tax deficiencies have not yet expired. The results of
all prior audits by the Internal Revenue Service and the relevant state, local
and foreign tax authorities are properly reflected in the Audited Balance Sheet
and any deficiencies proposed or assessed have been paid. Neither the Company
nor any predecessor corporation has ever filed any consent pursuant to Section
341(f) of the Internal Revenue Code of 1986, as amended or any predecessor
statute. None of the Company's assets are subject to a safe harbor leasing
transaction under Section 168 of the Internal Revenue Code.
4.13 Real Property. The Company owns no real property. Schedule 4.13 sets
forth a list of all real properties currently used or leased by the Company
(collectively, the "Real Property"). The Company has the right to quiet
enjoyment of all Real Property in which it holds a leasehold interest for the
full term, including all renewal rights, of the lease or similar agreement
relating thereto. The use and operation of all Real Property conform to all
applicable building, zoning, safety and subdivision laws, Environmental Laws and
other Laws. All work required to be done by the Company as landlord or tenant
has been duly performed. To the best of Sellers' and the Company's knowledge, no
condemnation or other proceeding is pending or threatened, which would affect
the use of any such property by the Company. Except as set forth on Schedule
4.13, the Company's buildings and other structures, equipment and other assets
(whether leased or owned) are in good operating condition and repair, subject to
ordinary wear and tear.
4.14 Environmental Matters. Except as provided in Schedule 4.14:
(a) Compliance; No Liability. The Company and Sellers have operated the
Business and each parcel of Real Property in compliance with all applicable
Environmental Laws or regulations. Neither Sellers nor the Company is subject to
any citation, notice of violation, liability, penalty or expense (including
attorneys' fees) and will not hereafter suffer or incur any loss, liability,
penalty or expense (including attorneys' fees) by virtue of any violation of any
Environmental Law or regulation occurring prior to the Closing, any
environmental activity conducted on or with respect to any property at or prior
to the Closing or any environmental condition existing on or with respect to any
property at or prior to the Closing, in each case whether or not the Company or
Sellers permitted or participated in such act or omission.
(b) Treatment; CERCLIS. Except as set forth on Schedule 4.14(b), neither
the Company nor either Seller has treated, stored, recycled or disposed of any
Hazardous Substance on any Real Property, and no other Person has treated,
stored, recycled or disposed of any Hazardous Substance on any part of the Real
Property. There has been no release of any Hazardous Substance at, on or under
any Real Property. Neither the Company nor either
13
Seller has transported any Hazardous Substance or arranged for the
transportation of any Hazardous Substance to any location that is listed or
proposed for listing on the National Priorities List pursuant to CERCLA or on
CERCLIS or to any other location that is the subject of federal, state or local
enforcement action or other investigation that may lead to claims against the
Company for cleanup costs, remedial action, damages to natural resources, to
other property or for personal injury including claims under CERCLA. None of the
Real Property is listed or proposed for listing on the National Priorities List
pursuant to CERCLA, CERCLIS or any state or local list of sites requiring
investigation or cleanup.
(c) Notices; Existing Claims; Certain Hazardous Substances; Storage Tanks.
Neither the Company nor either Seller has received any request for information,
notice of claim, demand or other notification that it is or may be potentially
responsible with respect to any investigation, abatement or cleanup of any
threatened or actual release. Neither the Company nor either Seller is required
to place any notice or restriction relating to the presence of any Hazardous
Substance at any Real Property or in any deed to any Real Property or upon any
structure constructed by the Company. The Company has provided to Buyer a list
of all sites to which the Company or either Seller has transported Hazardous
Substances for recycling, treatment, disposal, other handling or otherwise.
There have been no past, and there are no pending or contemplated, claims by the
Company or either Seller under any Environmental Laws based on actions of others
that may have impacted on the Real Property, and neither the Company nor either
Seller has entered into any agreement with any Person regarding any
Environmental Law, remedial action or other environmental liability or expense.
There are and have been no PCBs or friable asbestos present on or in any
structure or equipment constructed by the Company or, to the best of Sellers' or
the Company's knowledge, located on any Real Property. To the best of Sellers'
and the Company's knowledge, all storage tanks located on the Real Property,
whether underground or aboveground, are identified on Schedule 4.14(c), and all
such tanks and associated piping are in sound condition and are not leaking and
have not leaked.
4.15 Intellectual Property.
(a) Schedule 4.15 hereto contains a true and correct
description of the following:
(i) All patents, trade marks, copyrights, trade names, service marks
and other trade designations, including common law rights, registrations,
applications for registration, technology, know-how or processes ("Intellectual
Property") currently owned, in whole or in part, by the Company and all
licenses, royalties,
assignments and other similar agreements relating to the foregoing
to which the Company is a party; and
(ii) All agreements relating to Intellectual Property that the
Company is licensed or authorized to use from others or which the Company
licenses or authorizes others to use.
(b) Except as set forth on Schedule 4.15, the Company owns the
Intellectual Property free and clear of and without conflict with the rights of
others. Each item of Intellectual Property owned or used by the Company
immediately prior to the Closing shall be owned or available for use by Buyer on
identical terms and conditions immediately subsequent to the Closing. The
Company has not interfered with, infringed upon, misappropriated or otherwise
come into conflict with any Intellectual Property rights of third parties, and
the Company has not received any charge, complaint, claim, demand or notice
alleging any such interference, infringement, misappropriation or violation. To
14
the best of Sellers' and the Company's knowledge, no third party has interfered
with, infringed upon, misappropriated or otherwise come into conflict with any
Intellectual Property rights of the Company.
4.16 Contracts, Leases and Commitments; Customers and Suppliers. The Company
has furnished to Buyer true copies of all contracts, leases, agreements and
commitments to which the Company is a party or by which it or its assets are
bound or which otherwise relate to the Business, which contracts, leases and
commitments are listed in Schedule 4.16, including summaries of the terms of any
unwritten commitments. Except as set forth in Schedule 4.16: (1) the Company and
the other parties thereto, have complied in all material respects with all of
the Company's contracts, leases, and commitments, all of which are valid and
enforceable; (2) all of the Company's contracts, leases, and commitments are in
full force and effect and there exists no event or condition which with or
without notice or lapse of time would be a default thereunder, give rise to a
right to accelerate or terminate any provision thereof, or give rise to any
lien, claim, encumbrance, or restriction on any of the assets or properties of
the Company; (3) all of the Company's contracts, leases, and commitments have
been entered into on an arm's-length basis; and (4) none of the Company's
purchase commitments is in excess of the normal requirements of its business or
at an excessive price. Except for purchase orders or sales orders or invoices
made, taken, or received by the Company in the ordinary course of its business
consistent with past practice, the Company is not a party, nor is any of its
assets or Business subject, to any contract, lease, or commitment not listed in
such Schedule (including, without limita tion, financing or security agreements
or guaranties, repurchase agreements, agency agreements, manufacturers'
representative agreements, commission agreements, employment, or collective
bargaining agreements, pension, bonus, or profit-sharing agreements, group
insurance, medical or other fringe benefit plans, and leases of real or personal
property), other than (i) contracts terminable without penalty on not more than
thirty days' notice that do not involve the receipt or expenditure of more than
$10,000 in any one year, or (ii) contracts that do not involve the receipt or
expenditure of more than $5,000 individually or $10,000 in the aggregate in any
one year.
4.17 Inventory. The Company does not maintain any inventory other than
nonmaterial amounts required to perform its obligations under existing
construction or other contracts.
4.18 Accounts Receivable. Except as set forth in Schedule 4.18 hereto, all of
the Company's accounts receivable have arisen in the ordinary course of business
and, together with the allowance for doubtful accounts, have been reflected in
the Company's Financial Statements in accordance with GAAP. All such accounts
receivable are bona fide, valid and binding receivables representing obligations
for the face dollar amount thereof and will be collected in full (subject to the
allowance for doubtful accounts as set forth on the Company's Financial
Statements) within ninety (90) days of their due date and are subject to no
defenses, counterclaims or set-offs of any nature whatsoever. The allowance for
doubtful accounts set forth in the Company's Financial Statements is fully
adequate to cover any losses anticipated on such receivables.
4.19 Permits; Compliance with Law. The Company holds all permits,
certificates, licenses, franchises, privileges, approvals, registrations and
authorizations required under any applicable Law or otherwise advisable in
connection with the operation of its assets and Business ("Permits"). All
Permits of the Company are listed on Schedule 4.19. Each Permit is valid,
15
subsisting and in full force and effect. The Company is in compliance with and
has fulfilled and performed its obligations under each Permit, and no event or
condition or state of facts exists (or would exist upon the giving of notice or
lapse of time or both) that could consti tute a breach or default under any
Permit. The Business is and has been operated in material compliance therewith
and all laws and regulations (federal, state, local, and foreign) applicable to
it, and all required reports and filings with governmental authorities have been
properly made. During the five years preceding the date hereof, no notice,
citation, summons or order has been received by the Company and no complaint has
been served on the Company no penalty has been assessed and no investigation,
proceeding or review has been instituted or threatened (a) with respect to
alleged violation by the Company of any law or Permit or (b) with respect to any
alleged failure by the Company to have any Permit.
No event has occurred or condition or state of facts exists that could give rise
to any such violation of any law or Permit.
4.20 Employees. Schedule 4.20 hereto contains a list of the names, office
locations, compensation, and years of credited service for vacation and pension
plan purposes of all full- and part-time supervisory and executive employees of
the Company as of September 30, 1996 and a description of all employee "perks"
or other benefit practices not set forth in such plans or in agreements listed
in Schedule 4.21 hereto. No strike or labor dispute involving the Company has
occurred during the last three years or is threatened. Except as set forth on
Schedule 4.20, none of the Company's employees are covered by any union or
collective bargaining agreement. No key employee of the Company has indicated to
the Company that he or she is considering terminating his or her employment with
the Company. The Company has complied with applic able wage and hour, equal
employment, safety, and other legal requirements relating to its employees. The
consummation of the transactions contemplated by this Agreement will not give
rise to any liability of the Company for severance pay or termination pay.
4.21 Employee Benefit Plans.
(a) Schedule 4.21 contains a true and complete list of each pension,
retirement, profit sharing, deferred compensation, stock option, stock purchase,
bonus, medical, welfare, disability, severance or termination pay, insurance or
incentive plan, and each other employee benefit plan, program, agreement or
arrangement, whether funded or unfunded, sponsored, maintained or contributed to
or required to be contributed to by the Company or by any trade or business,
whether or not incorporated, that together with the Company would be deemed a
"single employer" within the meaning of Section 4001 of ERISA (a "Company ERISA
Affiliate"), for the benefit of any employee or terminated employee of the
Company or any Company ERISA Affiliate (the "Plans"). Schedule 4.21 identifies
each Plan that is an "employee benefit plan," within the meaning of Section 3(3)
of ERISA (the "ERISA Plans").
(b) The Company does not participate currently and has never participated
in and is not required currently and has never been required to contribute to or
otherwise participate in any "multi-employer plan," as defined in Sections
3(37)(A) and 4001(a)(3) of ERISA and Section 414(f) of the Code.
(c) True and complete copies of each of the Plans and related trusts have
been furnished to Buyer. To the extent not yet furnished to Buyer, there shall
be furnished to Buyer within ten (10) days of the date hereof, with respect to
each of the Plans, the most recent financial statement and the most recent
actuarial
16
report prepared with respect to any of such Plans that is funded, the most
recent Internal Revenue Service ("Service") determination letter, the most
recent Summary Plan Description and the most recent Annual Report together with
a statement setting forth any such documents which cannot be furnished; and any
such documents furnished and the nature of the documents which cannot be
furnished shall be reasonably satisfactory to Buyer.
(d) With respect to each Plan intended to be "qualified" within the
meaning of Section 401(a) of the Code, a determination letter from the Service
has been received to the effect that the Plan is qualified under Section 401 of
the Code and any trust main tained pursuant thereto is exempt from federal
income taxation under Section 501 of the Code, and nothing has occurred or will
occur through the Closing Date (including without limitation the transactions
contemplated by this Agreement) which would cause the loss of such qualification
or exemption or the imposition of any penalty or tax liability.
(e) All contributions required by each Plan or by law with respect to all
periods through the Closing Date shall have been made by such date (or provided
for by the Company by adequate reserves on its financial statements) and no
excise or other taxes have been incurred or are due and owing with respect to
the Plan because of any failure to comply with the minimum funding standards of
ERISA and the Code.
(f) No "accumulated funding deficiency", as defined in Section 302 of
ERISA, has been incurred with respect to any Plan, whether or not waived.
(g) No "reportable event" of the type set forth in Section 4043 of ERISA
has occurred and is continuing with respect to any Plan.
(h) There are no violations of ERISA or the Code with respect to the
filing of applicable reports, documents, and notices regarding any Plan with the
Secretary of Labor, Secretary of the Treasury, or the Pension Benefit Guaranty
Corporation (the "PBGC") or furnishing such documents to participants or
beneficiaries, as the case may be.
(i) No claim, lawsuit, arbitration, or other action has been threatened,
asserted, or instituted against any Plan, any trustee or fiduciaries thereof,
the Company, or any of the assets of any trust maintained under any Plan.
(j) All amendments required to bring any Plan into conformity with any of
the applicable provisions of ERISA and the Code have been duly adopted.
(k) Any bonding required with respect to any ERISA Plan in accordance with
applicable provisions of ERISA has been obtained and is in full force and
effect.
(l) Each Plan has been operated and administered in accordance with its
terms and the terms and the provisions of ERISA and the Code (including rules
and regulations thereunder) appli cable thereto.
17
(m) Each Plan intended to be "qualified" within the meaning of Section
401(a) of the Code is so qualified and the trusts maintained under such Plan is
exempt from taxation under section 501(a) of the Code.
(n) The Company has not incurred nor reasonably expects to
incur, any liability to the PBGC.
(o) No "prohibited transaction," as such term is defined in Section 4975
of the Code and Section 406 of ERISA, has occurred with respect to any Plan (and
the transactions contemplated by this Agreement will not constitute or directly
or indirectly result in such a "prohibited transaction") which could subject the
Company, Buyer, or any officer, director or employee of any of the foregoing, or
any trustee, administrator or other fiduciary, to a tax or penalty on prohibited
transactions imposed by either Section 502 of ERISA or Section 4975 of the Code;
(p) No Plan is under audit by the Service or the Department
of Labor.
(q) The present value, determined on a termination basis, of all accrued
benefits, vested and unvested, under each Plan, determined using the actuarial
valuation assumptions and methods (including interest rates) contained in the
most recent actuarial report for such Plan, does not exceed the assets thereof
allocable to such benefits.
(r) Except as set forth on Schedule 4.21(r), no welfare benefit plan
(within the meaning of Section 3(1) of ERISA) provides for continuing benefits
or coverage for any participant or beneficiary of a participant after such
participant's termination of employment except as may be required by COBRA at
the expense of the participant or the beneficiary of the participant;
(s) Except as set forth on Schedule 4.21(s), since the Audited Balance
Sheet Date, the Company has not maintained or contributed to, nor does it
currently maintain or contribute to, any severance pay plan;
(t) No individual shall accrue or receive any additional benefits,
service, or accelerated rights to payment of benefits under any Plan as a result
of the actions contemplated by this Agreement;
(u) Each Plan has complied with all of the requirements of COBRA.
4.22 Insurance. Schedule 4.22 hereto contains a complete and correct list of
all policies of insurance of any kind or nature covering the Company, including,
without limitation, policies of life, fire, theft, casualty, product liability,
workmen's compensation, business interruption, employee fidelity, and other
casualty and liability insurance, indicating the type of coverage, name of
insured, the insurer, the premium, the expiration date of each policy and the
amount of coverage. All such policies (i) are with insurance companies
reasonably believed by the Company and the Sellers to be financially sound and
reputable and are in full force and effect; (ii) are sufficient for compliance
with all require ments of law and of all applicable leases, mortgages and other
agreements; (iii) are valid, outstanding and enforceable policies; and (iv)
provide insurance coverage for the assets and operations of the Company in
amounts consistent with the past insurance practices of the Company. Complete
18
and correct copies of such policies have been furnished to Buyer. Since the
Audited Balance Sheet Date, the Company has not been denied any insurance
coverage which it has requested or made any material reduction in the scope or
change in the nature of its insurance coverage. Schedule 4.22 further states
whether the personal injury insurance maintained by the Company has been on an
"occurrence" or "claims made" basis during the six-year period prior to the date
hereof.
4.23 Litigation. Schedule 4.23 contains a complete and correct list of all
actions, suits, proceedings, claims, or governmental investigations pending or
threatened against, the Company or any of its assets, or, in connection with the
Company's Business, or any of the Company's officers, directors, or employees
(provided that for the purposes of this sentence, a lawsuit which has been filed
but which has not been served shall be deemed to be merely threatened and not
pending and a governmental investigation which has been initiated but for which
no notice has been given to the Company shall also be deemed to be merely
threatened and not pending). To the best of Sellers' and the Company's
knowledge, there are no facts or state of facts existing that (with or without
the giving of notice or the passage of time or both) could form the basis for
any such suit, proceeding, action, claim or investigation.
4.24 Transactions with Affiliates. Except as set forth on
Schedule 4.24 or on Schedule 4.16, and except for ordinary dealings
with its employees, since the Audited Balance Sheet Date, the Company has had no
direct or indirect dealings with any key employee, officer, director or
shareholder of the Company or with any of their affiliates, associates, or
relatives. Except as set forth on Schedule 4.24 or on Schedule 4.16, and except
for employment arrangements with its employees, the Company has no obligation to
or claim against any key employee, officer, director or shareholder of the
Company, or any of their affiliates, associates, or relatives, and no such
person or entity has any obligation to or claim against the Company. Schedule
4.24 or Schedule 4.16 reasonably describes the nature and extent of any
products, services, or benefits provided since the Audited Balance Sheet Date,
to the Company by any such person or entity other than ordinary employment
services and indicates whether there was a corresponding charge equal to the
fair market value of such products, services or benefits. None of any key
employee, officer, director or shareholder of the Company, or any of their
affiliates, associates, or relatives has any direct or indirect interest of any
kind in any business or entity which is competitive with Seller.
4.25 Books and Records. The books and records of the Company are complete and
correct in all material respects and have been maintained in accordance with
good business practices.
4.26 Improper Payments. The Company and its officers and agents have not made
any illegal or improper payments to, or provided any illegal or improper benefit
or inducement for, any governmental official, supplier, customer, or other
person, in an attempt to influence any such person to take or to refrain from
taking any action relating to the Company. The Company's employees may from time
to time have made customary holiday gifts of nominal value to suppliers or
customers.
4.27 Officers and Directors; Bank Accounts, etc. Schedule 4.27 hereto lists
all officers and directors of the Company; all bank accounts and safe deposit
boxes maintained by the Company and all authorized signatories therefor,
19
specifying their respective authority; and all credit cards under which
employees of the Company may incur liability, and the persons holding such
cards. No person or entity holds any general or special power of attorney from
the Company.
4.28 No Misstatements. No representation, warranty, or other statement by the
Sellers or Company herein or in any Sellers' Document contains or will contain
an untrue statement of a material fact, or omits or will omit to state a
material fact necessary to make the statements contained herein or therein not
materially misleading. The Company is not aware of any matter that could
reasonably be expected to have a materially adverse effect on the
Company's Business or prospects that has not been disclosed in writing to Buyer.
4.29 Backlog. Sellers and the Company are not aware of any circumstances or
set of facts that would cause the Company's revenues during fiscal year 1997 to
be materially lower than the revenues during the fiscal year 1996.
4.30 Securities Laws. Each Seller is acquiring stock issuable as part of the
Earn-out Consideration for his own account, with the intent of holding such
securities for investment, and without the intent of participating, directly or
indirectly, in a distribution of such securities in any manner which would
violate federal or applicable state securities laws. Each Seller, by reason of
his business or financial experience, has the capacity to protect his interests
in connection with his purchase of such securities. Upon receipt of such
securities, each Seller will be the sole beneficial owner thereof. Each Seller
acknowledges that the offer and sale of such securities have not been and will
not be accomplished or accompanied by the means of any form of general or public
solicitations or advertisements.
ARTICLE V
Representations and Warranties of Buyer and Able Telcom
Buyer and Able Telcom represent, warrant and agree that:
5.1 Corporate Status of Buyer and Able Telcom. Each of Buyer and Able Telcom
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Florida. Buyer has all requisite corporate power and
authority to own, operate and lease its properties and assets, to conduct its
business as it is now being conducted, to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby.
5.2 Authority Concerning this Agreement. The execution, delivery and
performance by Buyer and Able Telcom of this Agreement and any Buyers' Document
and the consummation of the transactions contemplated hereby and thereby, have
been duly and validly authorized and approved by all necessary corporate action.
This Agreement is (and, when executed and delivered, each Buyer's Document will
be) valid and binding upon Buyer and Able Telcom and enforceable against each of
Buyer and Able Telcom in accordance with their respective terms, except to the
extent that enforcement thereof may be limited by applicable bankruptcy,
reorganization, insolvency or moratorium laws, or other laws affecting the
enforcement of creditors' rights or by the principles governing the availability
of equitable remedies.
20
5.3 No Violation. The authorization, execution, delivery, and performance of
this Agreement and any Buyer's Document and the consummation of the transactions
as contemplated hereby and thereby do not and will not (1) violate any of the
provisions of the Governing Documents of Buyer or Able Telcom; (2) violate,
conflict with, result in the breach of or constitute a default under, require
any notice or consent under, give rise to a right of termination of, or
accelerate the performance required by, any terms or provisions of any material
agreement, instrument, or writing of any nature to which Buyer or Able Telcom is
a party or is bound; or (3) violate, or result in the breach of, conflict with,
or require any notice, filing or consent under any statute, rule, regulation or
other provision of law, or any order, judgment or other direction of a court or
other tribunal, or any other governmental requirement, permit, registration,
license or autho rization applicable to Buyer or Able Telcom; or (4) result in
the creation of any lien, claim, encumbrance, or restriction on any of its
Assets.
5.4 Securities. Able Telcom Shares, when issued and paid for pursuant to the
terms of this Agreement will be duly authorized, validly issued, fully paid and
nonassessable.
5.5 Change in Financial Condition. The financial statements of Able Telcom
dated October 31, 1995 and all interim financial statements, and Able Telcom's
Annual Report on Forms 10-K and it Quarterly Reports on Form 10-Q as filed with
the Securities and Exchange Commission for the fiscal year ending October 31,
1995, and the fiscal quarters ended January 31, April 30, and July 31, 1995, are
true and complete and accurately reflect the financial position of Able Telcom.
ARTICLE VI
Covenants of Seller
6.1 Current Leases. From and after the Closing, Sellers agree to continue to
lease the building owned by them to the Company on a month-to-month "triple net
lease" basis upon substantially the same terms and conditions (including a
monthly rent of $5,000) subject to which Sellers currently lease such building
to the Company. Sellers and the Company shall terminate the lease between them
with respect to the airplane owned by Sellers.
6.2 Access to Properties and Records. The Company agrees that between the
date hereof and the Closing Date, the Company shall give to Buyer and its
authorized accountants, counsel, advisors, and other representatives full
access, during reasonable business hours, to any and all of its premises,
properties, assets, inventories, contracts, books, records (including tax
returns filed and those in preparation) and affairs and will cause its officers
to furnish to Buyer and its representatives any and all financial and operating
data and other information regarding the financial condition, results of
operations, business, properties, assets, liabilities or future prospects of the
Company as they may from time to time request. Such access shall include, but
21
shall not be limited to, the placing of one or more employees and authorized
representatives at any office or premises for the purpose of enabling such
employees and representatives to become familiar with the operations of the
Company and permitting Buyer's independent public accountants full (but
confidential) access to work papers and other records of the Company's
accountants relating to the Company. The Company shall promptly furnish to Buyer
all financial statements of the Company that are prepared in the ordinary course
of business, including without limitation monthly reports of sales, revenue and
cash flow.
6.3 Election under Code Section 338(h)(10). Sellers acknowledge that Buyer
will make an election under Section 338(h)(10) of the Code, and a corresponding
election under Georgia and any local tax laws, with respect to the purchase and
sale of the Shares. The Company will accrue for such tax on its books after the
Closing Date (such tax then being the sole responsibility of the Company). Each
party shall provide the other party with all notices and information reports
filed with tax authorities and agencies with respect to the Section 338(h)(10)
elections.
6.4 Environmental. Sellers agree, within 30 days of the
Closing, at their sole expense, and in accordance will all
applicable regulations:
(a) to remove the cracked and weathered concrete slab along the eastern
property line on which waste oil drums are stored and to undertake remedial
action with respect to any environmental contamination found to exist
thereunder;
(b) to remove an unmarked 55-gallon drum that appears to contain loop
sealant and to undertake remedial action with respect to any leaks therefrom;
(c) to remove and dispose of approximately twenty 55-gallon
drums appearing on the site.
6.5 Change of Information. Sellers or the Company shall give Buyer prompt
notice of any change in any of the information contained in the representations
and warranties of the Company or Sellers hereunder, the Schedules hereto or the
documents furnished by Sellers or the Company in connection herewith which
occurs prior to the Closing.
6.6 Standstill. Unless the transactions contemplated by this Agreement shall
be terminated as permitted hereunder, neither Sellers nor the Company shall
solicit inquiries or proposals or participate in any negotiations concerning, or
provide any person with any information in connection with, any acquisition or
purchase by merger, consolidation, sale of stock or assets or otherwise of all
or substantially all of the assets or capital stock of the Company. Sellers
shall promptly notify Buyer if they or the Company receives any such inquiries
or proposals.
ARTICLE VII
Covenants of Buyer and Able Telcom
7.1 Election under ss. 1362(e). Buyer will join with Seller in making an
election under Section 1362(e)(3) of the Code, and a corresponding election
under Georgia and any local tax laws, with respect to the purchase and sale of
the Shares. Each party shall provide the other party with all notices and
information reports filed with tax authorities and agencies with respect to the
Section 1362 election.
22
7.2 Confidentiality. Prior to the Closing of the Escrow referred to in the
Escrow Agreement, Buyer shall not, without the consent of Seller or the Company,
divulge any information about Seller or the Company acquired in connection with
this Agreement or the transactions contemplated herein without the prior written
consent of all parties hereto, except to the extent (i) obligated or mandated by
applicable law or regulation, (ii) necessary for Buyer or Able Telcom to defend
or prosecute any litigation, arbitration or mediation in connection with this
Agreement or the transactions contemplated hereby, or (iii) rightfully received
from an independent third party without restriction and without a breach of this
Agreement.
7.3 Conduct of Business Prior to the Closing. Buyer agrees that from the date
hereof until the Closing of the Escrow the business of the Company shall be
operated diligently and conducted only in the ordinary course of business
consistent with present practices and with the participation and consent of
▇▇▇▇▇ ▇. ▇▇▇▇ in all matter affecting the Business of the Company.
7.4 Employee Stock Options. Able Telcom shall make available
for key employees of the Company under its 1995 Qualified Stock
Option Plan 50,000 options to purchase Able Telcom Shares.
7.5 Negative Covenants. Buyer and Sellers agree that from the
date hereof until the Closing of the Escrow, except as otherwise
consented to or approved by Buyers and Sellers, the Company shall
not (i) amend its Governing Documents; (ii) change its authorized
or issued capital stock or issue any Securities Rights with respect to shares of
its capital stock; (iii) modify, amend or cancel any of the provisions of any of
its leases (other than as otherwise provided herein) or contracts or enter into
any new contract that is not terminable by it on not more than thirty (30) days
notice, except for those made in the ordinary course of business; (iv) increase
the remuneration (including wages, bonuses, salaries, expense accounts and
benefits of any kind) of any director, officer or employee of the Company; (v)
enter into any employment or consulting contract (other than the Employment
Agreements attached hereto as Exhibit 3.3(a)(iv)) or arrangement that is not
terminable at will and without penalty or continuing obligation nor shall the
Company enter into any contract relating to benefits or take any action of the
kind referred to in Section 4.21 hereof or enter into or amend any employee
benefit plan; (vi) enter into any contract or commitment the performance of
which may extend beyond the Closing, except those made in the ordinary course of
business, the terms of which are consistent with past practice; (vii) alter the
premises listed on Schedule 4.13; (viii) permit or suffer any director, officer
or shareholder of the Company or any agent thereof to remove or purchase
anything of value (except merchandise inventory purchased at regular retail
prices less customary applicable discounts or credited at such prices less such
discounts against salary payable or to become payable to such persons) located
at the premises of any office, or other facility of the Company; (ix) enter into
any commitment for any capital expenditures which in any one instance exceed
$25,000, or in the aggregate, exceed $50,000; (x) cease the sale and
distribution of any products presently sold or distributed by the Company or
(xi) make any distributions to its shareholders, or any affiliates thereof, in
any form whatsoever, including, without limitation, dividends, share redemptions
or any non-cash distributions; (xii) fail to pay any taxes or any other
liability or charge when due (other than charges contested in good faith by
appropriate proceedings); (xiii) change or revoke any tax election or make any
agreement or settlement with any taxing authority except for the Section
338(h)(10) election as described in Section 6.3 herewith; (xiv) take any action
that is reasonably likely to result in the occurrence of any event set forth in
23
Section 4.11; or (xv) take any action or omit to take any action that will cause
a breach or termination of any Company Contract (other than termination by
fulfillment of the terms thereunder).
ARTICLE VIII
Miscellaneous Provisions
8.1 Nature and Survival of Representations and Warranties.
All representations and warranties made by Buyer and Sellers
hereunder shall survive the Closing until the earlier to occur of
the third anniversary of the date of this Agreement (except for the
representations and warranties contained in Section 4.12, which shall survive
until the expiration of the applicable statute of limitations and Section 4.23,
which shall survive until the fifth anniversary of this Agreement) or the date
at which the Buyer sells the Division to a third party, except that with respect
to a breach of the representations and warranties relating to taxes, such
representations and warranties shall survive the Closing until six months after
the expiration of the applicable statute of limitations and with respect to
breach of representations and warranties relating to environmental laws or title
to the Shares, such representations and warranties shall survive indefinitely.
The expiration of any representation or warranty shall not affect any claim made
in writing prior to the date of such expiration. The representations and
warranties hereunder shall not be affected or diminished by any investigation
made or any information provided at any time by or on behalf of the party for
whose benefit such representations and warranties were made or by the closing of
the transactions contemplated hereby.
8.2 Further Actions. At any time and from time to time after the Closing, at
Buyer's request and without further consideration, Sellers shall cooperate and
execute and deliver such other instruments of sale, conveyance, transfer,
assignment and confirmation and take such further action as Buyer may reasonably
deem necessary or desirable in order to more effectively convey, transfer and
assign to Buyer, and to confirm Buyer's title to, all of the Shares of Sellers,
to put Buyer in actual possession and operating control of the Company and the
Business, and to assist Buyer in exercising all rights with respect thereto.
8.3 Brokers. Each party represents to the other that it has had no dealings
with any broker or finder in connection with the transactions contemplated by
this Agreement. Should any claim be made for a broker's, finder's or similar
fee, on account of any actions or dealings by a party or its agents, such party
shall indemnify, defend, protect and hold the other party harmless from and
against any and all liability and expenses, including reason able attorneys'
fees, incurred by reason of any claim made by such broker.
8.4 Indemnification.
(a) By Sellers. Sellers shall, jointly and severally, indemnify, defend,
protect and hold harmless Buyer, and its affiliates (including Able Telcom),
promptly upon demand at any time and from time to time, against any and all
losses, liabili ties, claims, actions, damages, and expenses, including, without
limitation, reasonable attorneys' fees and disbursements incurred by Buyer or
its affiliates (collectively, "Losses"), arising out of or in connection with
any of the following: (i) any misrepresen tation or breach of any warranty made
by Sellers in any Sellers' Document; (ii) any breach or nonfulfillment of any
24
covenant or agreement made by Sellers in Sellers' Documents; (iii) the claims of
any broker or finder engaged by Sellers; and (iv) without in any manner limiting
the foregoing, any liabilities or obligations of, or claims or causes of action
against, Sellers or the Company which arise with respect to or relate to any
period or periods on or prior to the Closing Date hereof, except for those which
are set forth or reserved against in the Closing Balance Sheet or are set forth
in a schedule hereto, or were incurred in the ordinary course of business as
heretofore conducted and are not materially adverse to the operations or
prospects of the Business.
(b) By Buyer. Buyer and Able Telcom shall, jointly and severally,
indemnify, defend, protect and hold Sellers and its affiliates (including its
shareholders) harmless, promptly upon demand at any time and from time to time,
against any and all Losses arising out of or in connection with any of the
following: (a) any misrepresentation or breach of any warranty made by Buyer or
Able Telcom in any of Buyer's Documents or (b) any breach or nonfulfillment of
any covenant or agreement made by Buyer or Able Telcom in Buyer's Documents.
(c) Threshold for Indemnification. Neither Buyer nor Seller shall be
required to indemnify the other pursuant to this Section 8.4 until the aggregate
amount required to be paid thereunder exceeds Twenty-five Thousand Dollars, in
which case the Indemnifying Party shall then be required to so indemnify the
indemnified party for any and all Damages exceeding $25,000.
(d) Cap for Damages. In no event shall Sellers be liable to Buyer or Able
Telcom under this Agreement for any amount exceeding the Cash Consideration and
the Earn-out Consideration paid to Sellers by Buyer or Able Telcom hereunder as
of the date a claim for Damages is made by Buyer or Able Telcom upon Sellers;
provided however that to the extent that Damages exceed such amount, Buyer's and
Able Telcom's right to setoff in Section 8.4(f) hereof shall apply to such
excess.
(e) Defense. The obligations and liabilities of the parties hereunder with
respect to a third party claim shall be subject to the following terms and
conditions:
(i) An indemnified party shall give the indemnifying party written
notice of a third party claim promptly after receipt by the indemnified party of
notice thereof, and the indemnifying party may undertake at its sole cost and
expense the defense, compromise and settlement thereof by representatives of its
own choosing reasonably acceptable to the indemnified party. The assumption of
the defense, compromise and settlement of any such
third party claim by the indemnifying party shall be an acknowledgment of the
obligation of indemnifying party to indemnify the indemnified party with respect
to such claim hereunder. If the indemnified party desires to participate in, but
not control, any such defense, compromise and settlement, it may do so at its
sole cost and expense. If, however, the indemnifying party fails or refuses to
undertake the defense of such third party claim within ten (10) days after
written notice of such claim has been given to the indemnifying party by the
indemnified party, the indemnified party shall have the right to undertake the
defense of such claim with counsel of its own choosing with all costs charged to
the indemnifying party.
25
(ii) No settlement of a third party claim involving the asserted
liability of the indemnifying party under this Section 8.4 shall be made without
the prior written consent of both the indemnifying party and the indemnified
party. In the event that the indemnifying party wishes to accept or to offer a
settlement of a third party claim and the indemnified party rejects the
settlement, and the claim is later resolved by settlement, compromise or by
final judgment of a court of law, the indemnifying party's maximum liability to
the indemnified party shall not exceed the rejected settlement amount.
(f) Right of Set-Off.
(i) In the event any claim of a right to indemnification is made by
Buyer, or other indemnified party under this Section 8.4, such party may, at its
sole option, satisfy all or a portion of its Losses by way of set-off against
the Earn-out Consideration and any other payments due to Sellers.
(ii) This Section in no way constitutes a limitation on Buyer's
rights hereunder or a measure of liquidated damages and Buyer may seek full
indemnification for all damages suffered and may pursue all rights and remedies
available to it, at law or in equity, against any party hereto, jointly with
other parties hereto or severally, without seeking recourse against any other
party and without exercising any right of offset.
(g) Insurance proceeds/tax benefits. The liability of the Sellers with
respect to any claim for indemnification shall be reduced by the tax benefit
actually realized by Buyer and any insurance proceeds received by Buyer as a
result of any Loss upon which the claim for indemnification is based. The amount
of any such tax benefit shall be determined by taking into account the effect,
if any and to the extent determinable, of timing differences resulting in
acceleration of Losses or deferral of gains.
8.5 Notices. All notices or other communications in connection with this
Agreement shall be in writing and shall be considered given when personally
delivered or when mailed by registered or certified mail, postage prepaid,
return receipt requested, or when sent via commercial courier or telecopier,
directed as follows:
If to Sellers: ▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
J. ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
Rock & Leitz, P.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
26
If to Buyer: Transportation Management Group, Inc.
c/o Able Telcom Holding Corp.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Holland & Knight
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
8.6 Miscellaneous.
(a) Entire Agreement. This Agreement (which includes the schedules and
exhibits hereto) sets forth the parties' final and entire agreement with respect
to its subject matter and supersedes any and all prior understandings and
agreements, including, but not limited to the Letter of Intent. This Agreement
can be amended, supplemented, or changed, and any provision hereof can be
waived, only by a written instrument making specific reference to this
Agreement signed by the party against whom enforcement of any such amendment,
supplement, change, or waiver is sought.
(b) Successors. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respec tive heirs, executors,
administrators, personal representatives, successors, and assigns; provided,
however, that neither this Agreement nor any right or obligation hereunder may
be assigned or transferred, except that Buyer may assign this Agreement and its
rights hereunder to any direct or indirect wholly-owned subsidiary of Buyer and
to financial institutions providing financing for the transaction.
(c) Construction of Agreement. The section headings in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. When the context in which the words are used
in this Agreement indicates that such is the intent, words in the singular
number shall include the plural and vice versa. References to any gender shall
include any other gender that may be applicable in the circumstances. This
Agreement shall be construed without regard to any presumption or other rule
requiring construction against the party causing this Agreement to be drafted.
(d) Publicity. No party shall issue any press release or make any other
publicly available disclosure of the terms of this transaction without the prior
written consent of Buyer and Sellers; provided, however, that the restrictions
of this covenant shall not apply (i) if otherwise required by law, (ii) if
necessary or appropriate in connection with the transactions contemplated
hereunder, (iii) to the extent such information shall have otherwise become
publicly available.
27
(e) Severability. If any provision of this Agreement shall be held by any
court of competent jurisdiction to be illegal, invalid, or unenforceable, such
provision shall be construed and enforced as if it had been more narrowly drawn
so as not to be illegal, invalid or unenforceable, and such illegality,
invalidity or unenforceability shall have no effect upon and shall not impair
the enforceability of any other provision of this Agreement.
(f) Counterparts. This Agreement may be executed in one or more
counterparts, each one of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Delivery of an executed
counterpart of this Agreement via telephone facsimile transmission shall be
effective as delivery of a manually executed counterpart of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
28
IN WITNESS WHEREOF, on the date first above written, the parties have duly
executed this Agreement.
Traffic Management Group, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Its: President
-------------------------------------
Able Telcom Holding Corp.
a Florida corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Its: President
-------------------------------------
Georgia Electric Company
a Georgia corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Its: President
-------------------------------------
Sellers:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
/s/ J. ▇▇▇▇▇ ▇▇▇▇
------------------------------------------
J. ▇▇▇▇▇ ▇▇▇▇
29
EXHIBIT 2.3(f)
FORM OF
SUBSCRIPTION AGREEMENT
ABLE TELCOM HOLDING CORP., a Florida corporation (the "Corpora tion"), and
▇▇▇▇▇ ▇. ▇▇▇▇ and J. ▇▇▇▇▇ ▇▇▇▇ (each, an "Investor"), hereby agree as follows:
1. Sale and Purchase of Shares.
a. Subject to the prior approval of the Corporation's Board of Directors,
the Corporation agrees to issue to the Investor, and the Investor agrees to
purchase from the Corporation, ____________ shares (the "Shares") of the
Corporation's common stock, $.01 par value per share (the "Common Stock"), on
the terms and conditions set forth in this Subscription Agreement (the
"Agreement").
b. It is understood that all pertinent documents, records and books and
other information pertaining to this investment have been made available for
inspection by each Investor and his attorney and/or accountant and that the
books and records of the Corporation will be available, upon reasonable notice,
for inspection by each Investor during reasonable business hours at the office
of the Corporation at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
2. Closing for the Shares.
a. The Corporation shall issue the shares as partial consideration for the
covenants of Investor contained in that certain Stock Purchase Agreement dated
October 12, 1996 by and between the Corporation; Traffic Management Group, Inc.,
a Florida corporation; Georgia Electric Company, a Georgia corporation, and the
Investors.
b. The Corporation shall issue and deliver a certificate
representing the Shares at the times set forth in the Stock
Purchase Agreement
3. Certain Representations of the Investor.
The Investor hereby represents and warrants to the Corpora tion, its
officers and directors, the following:
a. Each Investor is an individual resident of ▇▇▇▇▇▇▇▇▇
County, Georgia.
1
b. Each Investor has read carefully and understands this Agreement and has
consulted his own attorney or accountant with respect to the investment
contemplated hereby and its suitability for the Investor.
c. The Corporation has made available to each Investor, or his designated
representatives, during the course of this transac tion and prior to the
purchase of any of the securities referred to herein, the opportunity to ask
questions of and receive answers from the officers and directors of the
Corporation concerning the terms and conditions of the offering or otherwise
relating to the financial data and business of the Corporation, to the extent
that the Corporation or its officers and directors possess such information or
can acquire it without unreasonable effort or expense. The Corporation has also
made available to the Investor for inspection, documents, records, books and
other written information about the Corporation, its business and this invest
ment.
d. Each Investor understands and represents that: (i) the Investor must
bear the economic risk of this investment for an indefinite period of time
because the Shares have not been registered under the Securities Act of 1933, as
amended (the "1933 Act"), or under any state securities laws and, therefore,
cannot be resold unless they are subsequently registered under the 1933 Act and
the pertinent state securities laws or unless an exemption from such
registration is available; (ii) the Investor is purchasing the Shares for
investment for his own account and not for the account of any other person, and
not with any present view toward resale or other "distribution" thereof within
the meaning of the 1933 Act; and (iii) the Investor agrees not to resell or
otherwise dispose of all or any part of the Shares, except as permitted by law,
including, without limitation, any and all applicable provisions of this
Agreement and any regulations under the 1933 Act.
e. Each Investor has such knowledge and experience in financial and
business matters that he is capable of evaluating the merits and risks of an
investment in the Shares. Each Investor represents, warrants and covenants that
he is an "Accredited Investor" within the meaning of Rule 501 of the 1933 Act.
In particular, the Investor qualifies as such pursuant to Subsections (a)(5) and
(6) of Rule 501, which provides that an Accredited Investor shall include:
(5) any natural person whose individual net worth, or joint net worth
with that person's spouse, at the time of his purchase exceeds
$1,000,000; and
(6) any natural person who had an individual income
in excess of $200,000 in each of the two most
recent years or joint income with that person's spouse in excess
of $300,000 in each of those years and has a reasonable
expectation of reach ing the same income level in the current
year.
f. Each Investor is aware that an investment in the Shares is highly
speculative and subject to substantial risks. Each Investor is capable of
bearing the high degree of economic risk and burdens of this investment,
including the possibility of a complete loss of his investment and the lack of a
public market and limited transferability of the Shares, which may make the
liquidation of this investment impossible for an indefinite period of time. The
financial condition of each Investor is such that he is under no present or
contemplated future need to dispose of any of the Shares to satisfy any existing
or contemplated undertaking, need or indebtedness.
g. All of the information that either Investor has set forth or
represented in this Agreement, with respect to his financial position and
business and investment experience is correct and complete as of the date of
this Agreement and, if there should be any material change in such information
prior to the purchase of Shares, the Investor will immediately furnish the
revised or corrected information to the Corporation.
2
h. Each Investor agrees that he shall be bound by all of the terms,
conditions, duties and obligations of this Agreement insofar as such matters
affect the Corporation and/or the Investor.
4. Restricted Stock and Legend.
a. Each Investor acknowledges that the Shares offered hereunder are being
offered pursuant to a private placement exemption under the 1933 Act, and that
the Shares are deemed "restricted securities" as defined in the 1933 Act. Until
the securities offered hereunder become registered with the Securities and
Exchange Commission, each certificate representing a share of Common Stock shall
bear a legend in substantially the following form:
THE SHARE(S) REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE
SECURITIES LAWS, AND THE CORPORATION HAS RELIED UPON AN EXEMPTION TO THE
REGISTRATION REQUIREMENT UNDER THE ACT FOR THE SALE OF THE SHARE(S)
REPRESENTED BY THIS CERTIFICATE TO ITS HOLDER. THEREFORE, THE SHARES
REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED STOCK AND MAY NOT BE SOLD OR
TRANSFERRED TO ANY THIRD PARTY WITHOUT EITHER BEING REGIS TERED UNDER THE ACT
OR AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT REGISTRATION IS NOT
REQUIRED UNDER THE ACT.
b. Prior to any transfer or attempted transfer of any of the Shares issued
hereunder, or any interest therein, each Investor shall give the Corporation
written notice of his intention to make such transfer, describing the manner of
the intended transfer and the proposed transferee. Promptly after receiving such
written notice, the Corporation shall present copies thereof to counsel for the
Corporation and to any special counsel designated by such Investor or by such
holder. If in the opinion of each of such counsel the proposed transfer may be
effected without registration of the Shares under the applicable federal or
state securities laws, as promptly as practicable, the Corporation shall notify
the Investor of such opinions, whereupon the Shares proposed to be transferred
shall be transferred in accordance with the terms of said notice. The
Corporation shall not be required to effect any such transfer prior to the
receipt of such favorable opinion(s); provided, however, the Corporation may
waive the requirement that Investor obtain an opinion of counsel, in its sole
and absolute discretion. As a condition to such favorable opinion, counsel for
the Corporation may require an investment letter to be executed by the proposed
transferee.
5. No Assignment.
This Agreement is neither transferable nor assignable by either Investor,
without the prior written consent of the Corpora tion.
6. General.
This Agreement shall: (i) be binding upon each Investor and the
Corporation and their respective representatives, successors, and permitted
assigns; (ii) be governed, construed and enforced in accordance with the
internal laws of the State of Florida; and (iii) all covenants, agreements,
3
representations and warranties made herein or otherwise made in writing by any
party pursuant hereto shall survive the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby. This Agreement may
be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
______ day of ______________, 19__.
"CORPORATION"
ABLE TELCOM HOLDING CORP.
a Florida corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: President
"INVESTOR"
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
"INVESTOR"
/s/ J. ▇▇▇▇▇ ▇▇▇▇
---------------------------
J. ▇▇▇▇▇ ▇▇▇▇
4
Exhibit 3.3(a)(iv)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of
October 12, 1996 by and between Transportation Safety Contractors, Inc., a
Florida corporation (the "Company"), and J.
▇▇▇▇▇ ▇▇▇▇ ("Employee").
WHEREAS, the Company, through its Board of Directors, desires to retain the
services of Employee, and Employee desires to be retained by the Company, on the
terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. Employment. The Company hereby employs Employee, and
Employee hereby accepts employment, upon the terms of and subject
to this Agreement.
2. Term. The term (the "Term") of this Agreement shall
commence on October 12, 1996, and shall continue until October 11,
2001 unless earlier terminated in accordance with the terms hereof.
3. Duties. During his employment hereunder, Employee will serve as President
of the Company, and shall be responsible for the day-to-day operations of such
Company, subject to the supervision and direction by the Chief Executive Officer
of Able Telcom Holding Corp., a Florida corporation and the indirect corporate
parent of the Company ("Able Telcom"). As part of his duties hereunder, Employee
shall, if requested by the Chief Executive Officer of Able Telcom, serve as an
executive officer or director (subject to Employee's consent in the case of a
directorship) of Able Telcom or an affiliate thereof. Employee shall diligently
perform such duties and shall devote his entire business skill, time and effort
to his employment and his duties hereunder and shall not during the Term,
directly or indirectly, alone or as a member of a partner ship, or as an
officer, director, employee or agent of any other person, firm or business
organization engage in any other business activities or pursuits requiring his
personal service that materially conflict with his duties hereunder or the
diligent performance of such duties.
4. Compensation.
a. Salary. During his employment hereunder, Employee shall be paid a
salary of $150,000 per year, payable in equal installments not less than
monthly ("Base Salary"). The Employee's Base Salary shall be reviewed at
least annually by the Board of Directors or any Committee of the Board to
which authority has been delegated to review executive compensation. The Base
Salary shall be increased, in the Company's sole discretion, based on such
review.
b. Insurance. During his employment hereunder, Employee
shall be entitled to participate in all such health, life,
disability and other insurance programs, if any, that the
Company may offer to other key executive employees of the
Company from time to time.
c. Other Benefits. During his employment hereunder, Employee shall be
entitled to all such other benefits, if any, that the Company may offer to
other key executive employees of the Company from time to time. Without
limiting the generality of the foregoing, the Company and Employee agree that
1
Employee shall be entitled to participate in Able Telcom's 1995 Qualified
Stock Option Plan to the extent mutually agreed between Employee and Able
Telcom.
d. Expense Reimbursement. Employee shall, upon submission of appropriate
supporting documentation, be entitled to reimbursement of reasonable
out-of-pocket expenses incurred in the performance of his duties hereunder in
accordance with policies established by the Company. Such expenses shall
include, without limitation, reasonable entertainment expenses, gasoline and
toll expenses and cellular phone use charges, if such charges are directly
related to the business of the Company.
e. Grounds for Termination. The Board of Directors of the Company may
terminate this Agreement for Cause. As used herein, "Cause" shall mean any of
the following: (i) an act of willful misconduct or gross negligence by Employee
in the performance of his duties or obligations to the Company; or (ii)
conviction of Employee of a felony or any crime involving dishonesty (excepting
non-alcohol-related traffic offenses); or (iii) a material act of dishonesty or
breach of trust on the part of Employee resulting or intended to result directly
or indirectly in personal gain or enrichment at the expense of the Company.
5. Termination by Employee. Employee may terminate this Agreement with Good
Reason. In the event of termination by Employee for Good Reason, Employee shall
be entitled to the benefits of Paragraph 6.b of this Agreement. "Good Reason"
means a material breach of the provisions of this Agreement or the Stock
Purchase Agreement (defined below) by the Company and Employee provides at least
30 days' prior written notice to the Company of
the existence of such breach and his intention to terminate this Agreement (no
such termination shall be effective if such breach is cured during such period).
For purposes of this Agreement, the "Stock Purchase Agreement" is the agreement
entered into of even date herewith between, among others, the Company, the
Employee and Able Telcom pursuant to which the Company was purchased by Traffic
Management Group, Inc., a wholly owned subsidiary of Able Telcom.
6. Payment and Other Provisions Upon Termination.
a. In the event Employee's employment with the Company (including its
subsidiaries) is terminated by the Company for Cause as provided in Paragraph
4.e then, on or before Employee's last day of employment with the Company,
the provisions of this Paragraph 6.a shall apply. These same provisions shall
apply if Employee terminates his employment without Good Reason as described
in Paragraph 5.
(1) Salary. The Company shall pay in a lump sum to Employee at the time
of Employee's termination such amount of compensation due Employee for
services rendered to the Company. Any and all other rights granted to
Employee under this Agreement shall terminate as of the date of
termination.
(2) Noncompetition/Nonsolicitation Period. The provisions of Paragraphs
11 and 12 shall, at the option of the Company in its sole discretion,
continue to apply with respect to Employee for a period of up to two years
following the date of termination, (a) unless the Company provides a
written notice to Employee within 5 business days after Employee's termina
tion that the Company does not wish to exercise its right to require that
Employee not compete and not solicit in accordance with Paragraphs 11 and
12 hereof; and (b) provided Company thereafter pays to Employee in
periodic installments, without interest, in accordance with the regular
salary payment practices of the Company an amount equal to (x) the amount
of Employee's annual Base Salary as in effect immediately prior to
Employee's date of termination, multiplied by (y) the number of months
that the Company is requiring the non-competition and non-solicitation
covenants to remain in place, divided by 12.
2
b. In the event Employee's employment with the Company (including its
subsidiaries) is terminated by the Company for any reason other than for
Cause as provided in Paragraph 4.e and other than as a consequence of
Employee's death, disability, or normal retirement under the Company's
retirement plans and practices, then the following provisions apply. These
same provisions shall apply if Employee terminates his employment with Good
Reason as described in Paragraph 5. In addition to the amounts stated below,
Employee shall be paid any other amounts by the Company to which he is
entitled.
(1) Salary. On or before Employee's last day of employment with the
Company, the Company shall pay in a lump sum to Employee as compensation
for services rendered to the Company a cash amount equal to one-half the
amount of Employee's annual Base Salary. At the election of the Company,
the cash amount referred to in this Paragraph 6.b.(1) may be paid to
Employee in periodic installments, without interest, in accordance with
the regular salary payment practices of the Company, with the first such
installment to be paid on or before Employee's last day of employment with
the Company, and no interest shall be paid with respect to any amount not
paid on the Employee's date of termination.
(2) Benefit Plan Coverage. The Company shall maintain in full force and
effect for Employee and his dependents for six months after the date of
termination, all life, health, accident, and disability benefit plans and
other similar employee benefit plans, programs and arrangements in which
Employee or his dependents were entitled to participate immediately prior
to the date of termination, in such amounts as were in effect immediately
prior to the date of termina tion.
(3) Other Compensation. Any awards previously made to Employee under
any of the Company's compensation plans or programs and not previously
paid shall immediately vest on the date of his termination and shall be
paid on that date and included as compensation in the year paid.
(4) Noncompetition/Nonsolicitation Period. The provisions of Paragraphs
11 and 12 shall continue, beyond the time periods set forth in such
paragraphs, to apply with respect to Employee for six (6) months following
the date of termination, and at the end of such six (6) month period, the
Company shall have the right to extend the time period of noncompetition
and nonsolicitation for an additional six (6) months by giving written
notice to Employee of such extension and paying to Employee an amount
equal to one-half the amount of Employee's annual Base Salary as in effect
immediately prior to his date of termination. At the election of the
Company, the cash amount referred to in the prior sentence of this
Paragraph 6.b.(4), 6.b.(4) may be paid to Employee in periodic
installments in accordance with the regular salary payment practices of
the Company, with the first such installment to be paid on or before the
delivery of the notice described in the first sentence of this Paragraph
6.b.(4), 6.b.(4), and no interest shall be paid with respect to any amount
paid in installments.
7. Termination by Reason of Death. If Employee shall die while employed by
the Company both prior to termination of employment and during the effective
term of this Agreement, all Employee's rights under this Agreement shall
terminate with the payment of such amounts of annual Base Salary as have accrued
but remain unpaid
through the month in which his death occurs, plus three additional months of the
fixed salary. In addition, Employee's eligible dependents shall receive
continued benefit plan coverage under Paragraph 6.b.(2) for three months from
the date of Employee's death.
3
8. Termination by Disability. Employee's employment hereunder may be
terminated by the Company for disability. In such event, all Employee's rights
under this Agreement shall terminate with the payment of such amounts of annual
Base Salary as have accrued but remain unpaid as of thirtieth (30th) day after
such notice is given except and all benefits under Paragraphs 6.b.(2) and
6.b.(3) shall be extended to Employee as described in such paragraphs. In
addition, the noncompetition and nonsolicitation provisions of Paragraphs 11 and
12 shall continue to apply to Employee for a period of one year from the date of
termination. For purposes of this Agreement, "disability" is defined to mean
that, as a result of Employee's incapacity due to physical or mental illness:
a. Employee shall have been absent from his duties as an
officer of the Company on a substantially full-time basis for
three consecutive months; and
b. Within thirty (30) days after the Company notifies Employee in writing
that it intends to replace him, Employee shall not have returned to the
performance of his duties as an officer of the Company on a full-time basis.
9. Arbitration. In the event that one party alleges a breach or should seek
to enforce or interpret any provision contained herein (a "Dispute"), such
parties hereto shall select an arbitrator (the "Arbitrator") and shall subject
the Dispute to arbitration in accordance with the applicable Commercial
Arbitration Rules of the American Arbitration Association. The arbitration
procedures described herein shall take place in Tampa, Florida. The Arbitrator
shall submit a written report stating its decision and a reasonably detailed
description of its analysis and the factors that led to such decision to each
party within sixty (60) days after the appointment of the Arbitrator. This
arbitration result shall be final and binding on each the parties.
10. Costs of Arbitration or Suit. If arbitration or litigation
shall be brought in connection with a Dispute, each party shall
bear its own costs and expenses in prosecuting or defending such
action.
11. Noncompetition. The parties hereby acknowledge that the Company has a
legitimate business purpose protecting the Company's goodwill, that Employee
will be instrumental in generating goodwill for the Company, and that it is
reasonable and necessary for the Company under certain circumstances to restrict
competition by the Employee following termination of his employment under this
Agreement. Accordingly, during the term of this Agreement and for such
additional periods as may otherwise be set forth herein in
reference to this Paragraph 11, Employee shall not, without the Company's prior
written consent, by himself or in partnership or in conjunction with or as an
employee, officer, director, manager, consultant or agent of any other person,
firm, corporation or other entity, either directly or indirectly, undertake or
carry on or be engaged or have any financial or other interest in, or in any
other manner advise or assist any person, firm, corporation or other entity
engaged or interested in, any business, activity, or enterprise which is similar
to or competes with any aspect of the business carried on by the Company,
including, without limitation, any business engaged in the business of (a)
installing, testing and maintaining intelligent highway and communication
systems, including computerized traffic management systems, wireless and fiber
optic data networks, weather sensors, voice, data and video systems, and (b)
installing and maintaining industrial equipment and control systems. For
purposes of this Section 11, the term "Territory" shall mean the states of
Georgia, North Carolina, South Carolina, Tennessee, Florida, Alabama,
Mississippi, Ohio, Kentucky, Pennsylvania, New Jersey and Texas.
12. Nonsolicitation of Employees and Customers. At all times during
Employee's employment hereunder, or for such additional periods as may otherwise
be set forth in this Agreement in reference to this Paragraph 12, Employee shall
not, directly or indirectly, for himself or for any other person or entity (i)
4
attempt to employ, employ or enter into any contractual arrangement with any
employee or former employee of the Company or the Buyer unless such employee or
former employee has not been employed, by the Company, the Buyer or his
affiliates or predecessors in interest, for a period in excess of six months nor
(ii) call on or solicit any of the actual or targeted prospective Customers (as
hereafter defined) of the Company or the Buyer or his affiliates or predecessors
in interest with respect to any matters related to or competitive with the
business of the Company or the Buyer. For the purposes of this subsection, the
term "Customer" shall mean any individual or entity, or an affiliate,
subsidiary, or predecessor in interest thereof, for whom the Company (a)
installs, tests or maintains intelligent highway and communication systems,
including computerized traffic management systems, wireless and fiber optic data
networks, weather sensors, voice, data and video systems, or (b) installs and
maintains industrial equipment and control systems or to whom the Company sells
products of any sort or nature whatsoever during the term of Employee's
employment with the Company.
13. Confidentiality.
a. Nondisclosure. Employee acknowledges and agrees that the Confidential
Information (as defined below) is a valuable, special and unique asset of the
Company's business. Accord ingly, except in connection with the performance
of his duties hereunder, Employee shall not at any time during or subsequent
to the term of his employment hereunder disclose, directly or indirectly, to
any person or entity any proprietary or confidential information (including,
without limitation, any trade secrets, customer or supplier lists, pricing
information, marketing arrangements, or strategies, business plans, internal
performance statistics, training manuals, or other information concerning the
Company or its affiliates that is competitively sensitive or confidential,
other than such information as is publicly available from a source other than
Sellers, the Company or its officers and directors, and referred to herein
collec tively as "Confidential Information") relating to the Company or its
affiliates or subsidiaries; and Employee shall not, without the prior written
consent of Buyer, to disclose such information to anyone other than (i)
disclosure to Buyer and those designated by Buyer, and (ii) any disclosure
which is required by law.
b. Return of Confidential Information. Upon termination of Employee's
employment, for whatever reason and whether voluntary or involuntary, or at
any time at the request of the Company, Employee shall promptly return all
Confidential Information in the possession or under the control of Employee
to the Company and shall not retain any copies or other reproductions or
extracts thereof. Employee shall at any time at the request of the Company
destroy or have destroyed all memoranda, notes, reports, and documents,
whether in "hard copy" form or as stored on magnetic or other media, and all
copies and other reproduc tions and extracts thereof, prepared by Employee
and shall provide the Company with a certificate that the foregoing materials
have in fact been returned or destroyed.
c. Books and Records. All books, records and accounts whether prepared by
Employee or otherwise coming into Employee's possession, shall be the
exclusive property of the Company and shall be returned immediately to the
Company upon termination of Employee's employment hereunder or upon the
Company's request at any time.
14. Injunction/Specific Performance Setoff. Employee acknowledges that a
breach of any of the provisions of Paragraphs 11, 12, or 13 hereof would result
in immediate and irreparable injury to the Company which cannot be adequately or
reasonably compensated at law. Therefore, Employee agrees that the Company shall
be entitled, if any such breach shall occur or be threatened or attempted, to a
decree of specific performance and to a temporary and permanent injunction,
without the posting of a bond, enjoining and restraining such breach by Employee
or his agents,
5
either directly or indirectly, and that such right to injunction shall be
cumulative to whatever other remedies for actual damages to which the Company is
entitled. Employee further agrees that the Company may set off against or recoup
from any amounts due under this Agreement or any other Agreement to the extent
of any losses incurred by the Company as a result of any breach by Employee of
the provisions of Paragraphs 11, 12, or 13 hereof.
15. Severability. Any provision in this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
only to the extent of such prohibition or unenforceability without invalidating
or affecting the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
16. Successors. This Agreement shall be binding upon Employee and inure to
his and his estate's benefit, and shall be binding upon and inure to the benefit
of the Company and any permitted successor of the Company. Neither this
Agreement nor any rights arising hereunder may be assigned or pledged by:
Employee or anyone claiming through Employee; or by the Company, except to any
corporation which is the successor in interest to the Company by reason of a
merger, consolidation or sale of substantially all of the assets of the Company.
17. Controlling Law. This Agreement shall in all respects be
governed by, and construed in accordance with, the laws of the
State of Florida.
18. Notices. Any notice required or permitted to be given
hereunder shall be written and sent by registered or certified
mail, telecommunicated or hand delivered at the address set forth
herein or to any other address of which notice is given:
To the Company: Transportation Safety Contractors, Inc.
c/o Able Telcom Holding Corp.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
To Employee: ▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
19. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto on the subject matter hereof
and may not be modified without the written agreement of both
parties hereto.
20. Waiver. A waiver by any party of any of the terms and
conditions hereof shall not be construed as a general waiver by
such party.
21. Counterparts. This Agreement may be executed in counter
parts, each of which shall be deemed an original and both of which
together shall constitute a single agreement.
22. Interpretation. In the event of a conflict between the
provisions of this Agreement and any other agreement or document
defining rights and duties of Employee or the Company upon
Employee's termination, the rights and duties set forth in this
Agreement shall control.
23. Survival. Notwithstanding the provisions of Paragraph 2,
the provisions of Paragraphs 9, 11, 12 and 13 shall survive the
expiration or early termination of this Agreement.
6
IN WITNESS WHEREOF, this Employment Agreement has been executed by the
parties as of the date first above written.
COMPANY:
Transportation Safety Contractors, Inc.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: President
EMPLOYEE:
/s/ J. ▇▇▇▇▇ ▇▇▇▇
---------------------------------------
J. ▇▇▇▇▇ ▇▇▇▇
Able Telcom acknowledges
and agrees to be bound by
the terms of Section ? hereof.
ABLE TELCOM HOLDING CORP.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Its:
7
Exhibit 3.3(a)(iv)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered
into as of October 12, 1996 by and between Georgia Electric
Company, a Georgia corporation ("the Company"), and ▇▇▇▇▇ ▇. ▇▇▇▇
("Employee").
WHEREAS, the Company, through its Board of Directors, desires to retain the
services of Employee, and Employee desires to be retained by the Company, on the
terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. Employment. The Company hereby employs Employee, and
Employee hereby accepts employment, upon the terms of and subject
to this Agreement.
2. Term. The term (the "Term") of this Agreement shall
commence on October 12, 1996, and shall continue until October 11,
2001 unless earlier terminated in accordance with the terms hereof.
3. Duties. During his employment hereunder, Employee will serve as President
of the Company, and shall be responsible for the day-to-day operations of such
Company, subject to the supervision and direction by the Chief Executive Officer
of Able Telcom Holding Corp., a Florida corporation and the indirect corporate
parent of the Company ("Able Telcom"). As part of his duties hereunder, Employee
shall, if requested by the Chief Executive Officer of Able Telcom, serve as an
executive officer or director (subject to Employee's consent in the case of a
directorship) of Able Telcom or an affiliate thereof. Employee shall diligently
perform such duties and shall devote his entire business skill, time and effort
to his employment and his duties hereunder and shall not during the Term,
directly or indirectly, alone or as a member of a partner ship, or as an
officer, director, employee or agent of any other person, firm or business
organization engage in any other business activities or pursuits requiring his
personal service that materially conflict with his duties hereunder or the
diligent performance of such duties.
4. Compensation.
a. Salary. During his employment hereunder, Employee shall be paid a
salary of $150,000 per year, payable in equal installments not less than
monthly ("Base Salary"). The Employee's Base Salary shall be reviewed at
least annually by the Board of Directors or any Committee of the Board to
which authority has been delegated to review executive compensation. The Base
Salary shall be increased, in the Company's sole discretion, based on such
review.
b. Insurance. During his employment hereunder, Employee
shall be entitled to participate in all such health, life,
disability and other insurance programs, if any, that the
Company may offer to other key executive employees of the
Company from time to time.
c. Other Benefits. During his employment hereunder,
Employee shall be entitled to all such other benefits, if any,
that the Company may offer to other key executive employees of
the Company from time to time.
1
d. Expense Reimbursement. Employee shall, upon submission of appropriate
supporting documentation, be entitled to reimbursement of reasonable
out-of-pocket expenses incurred in the performance of his duties hereunder in
accordance with policies established by the Company. Such expenses shall
include, without limitation, reasonable entertainment expenses, gasoline and
toll expenses and cellular phone use charges, if such charges are directly
related to the business of the Company.
5. Grounds for Termination. The Board of Directors of the Company may
terminate this Agreement for Cause. As used herein, "Cause" shall mean any of
the following: (i) an act of willful misconduct or gross negligence by Employee
in the performance of his duties or obligations to the Company; or (ii)
conviction of Employee of a felony or any crime involving dishonesty (excepting
non-alcohol-related traffic offenses); or (iii) a material act of dishonesty or
breach of trust on the part of Employee resulting or intended to result directly
or indirectly in personal gain or enrichment at the expense of the Company.
6. Termination by Employee. Employee may terminate this Agreement with Good
Reason. In the event of termination by Employee for Good Reason, Employee shall
be entitled to the benefits of Paragraph 7.b of this Agreement. "Good Reason"
means a material breach of the provisions of this Agreement or the Stock
Purchase Agreement (defined below) by the Company and Employee provides at least
30 days' prior written notice to the Company of the existence of such breach and
his intention to terminate this Agreement (no such termination shall be
effective if such breach is cured during such period). For purposes of this
Agreement, the "Stock Purchase Agreement" is the agreement entered into of even
date herewith between, among others, the Company, the Employee and Able Telcom
pursuant to which the Company was purchased by Traffic Management Group, Inc., a
wholly owned subsidiary of Able Telcom.
7. Payment and Other Provisions Upon Termination.
a. In the event Employee's employment with the Company (including its
subsidiaries) is terminated by the Company for Cause as provided in Paragraph
5 then, on or before Employee's last day of employment with the Company, the
provisions of this Paragraph 7.a shall apply. These same provisions shall
apply if Employee terminates his employment without Good Reason as described
in Paragraph 6.
(1) Salary. The Company shall pay in a lump sum to Employee at the time
of Employee's termination such amount of compensation due Employee for
services rendered to the Company. Any and all other rights granted to
Employee under this Agreement shall terminate as of the date of
termination.
(2) Noncompetition/Nonsolicitation Period. The provisions of Paragraphs
12 and 13 shall, at the option of the Company in its sole discretion,
continue to apply with respect to Employee for a period of up to two years
following the date of termination, (a) unless the Company provides a
written notice to Employee within 5 business days after Employee's termina
tion that the Company does not wish to exercise its right to require that
Employee not compete and not solicit in accordance with Paragraphs 12 and
13 hereof; and (b) provided Company thereafter pays to Employee in
periodic installments, without interest, in accordance with the regular
salary payment practices of the Company an amount equal to (x) the amount
of Employee's annual Base Salary as in effect immediately prior to
Employee's date of termination, multiplied by (y) the number of months
that the Company is requiring the non-competition and non-solicitation
covenants to remain in place, divided by 12.
b. In the event Employee's employment with the Company (including its
subsidiaries) is terminated by the Company for any reason other than for
Cause as provided in Paragraph 5 and other than as a consequence of
Employee's death, disability, or normal retirement under the Company's
2
retirement plans and practices, then the following provisions apply. These
same provisions shall apply if Employee terminates his employment with Good
Reason as described in Paragraph 6. In addition to the amounts stated below,
Employee shall be paid any other amounts by the Company to which he is
entitled.
(1) Salary. On or before Employee's last day of employment with the
Company, the Company shall pay in a lump sum to Employee as compensation
for services rendered to the Company a cash amount equal to one-half the
amount of
Employee's annual Base Salary. At the election of the Company, the cash
amount referred to in this Paragraph 7.b.(1) may be paid to Employee in
periodic installments, without interest, in accordance with the regular
salary payment practices of the Company, with the first such installment
to be paid on or before Employee's last day of employment with the
Company, and no interest shall be paid with respect to any amount not paid
on the Employee's date of termination.
(2) Benefit Plan Coverage. The Company shall maintain in full force and
effect for Employee and his dependents for six months after the date of
termination, all life, health, accident, and disability benefit plans and
other similar employee benefit plans, programs and arrangements in which
Employee or his dependents were entitled to participate immediately prior
to the date of termination, in such amounts as were in effect immediately
prior to the date of termina tion.
(3) Other Compensation. Any awards previously made to Employee under
any of the Company's compensation plans or programs and not previously
paid shall immediately vest on the date of his termination and shall be
paid on that date and included as compensation in the year paid.
(4) Noncompetition/Nonsolicitation Period. The provisions of Paragraphs
12 and 13 shall continue, beyond the time periods set forth in such
paragraphs, to apply with respect to Employee for six (6) months following
the date of termination, and at the end of such six (6) month period, the
Company shall have the right to extend the time period of noncompetition
and nonsolicitation for an additional six (6) months by giving written
notice to Employee of such extension and paying to Employee an amount
equal to one-half the amount of Employee's annual Base Salary as in effect
immediately prior to his date of termination. At the election of the
Company, the cash amount referred to in the prior sentence of this
Paragraph 7.b.(4), 7.b.(4) may be paid to Employee in periodic
installments in accordance with the regular salary payment practices of
the Company, with the first such installment to be paid on or before the
delivery of the notice described in the first sentence of this Paragraph
7.b.(4), 7.b.(4), and no interest shall be paid with respect to any amount
paid in installments.
8. Termination by Reason of Death. If Employee shall die while employed by
the Company both prior to termination of employment and during the effective
term of this Agreement, all Employee's rights under this Agreement shall
terminate with the payment of such amounts of annual Base Salary as have accrued
but remain unpaid through the month in which his death occurs, plus three
additional months of the fixed salary. In addition, Employee's eligible
dependents shall receive continued benefit plan coverage under
Paragraph 7.b.(2) for three months from the date of Employee's death.
9. Termination by Disability. Employee's employment hereunder may be
terminated by the Company for disability. In such event, all Employee's rights
under this Agreement shall terminate with the payment of such amounts of annual
Base Salary as have accrued but remain unpaid as of thirtieth (30th) day after
such notice is given except and all benefits under Paragraphs 7.b.(2) and
3
7.b.(3) shall be extended to Employee as described in such paragraphs. In
addition, the noncompetition and nonsolicitation provisions of Paragraphs 12 and
13 shall continue to apply to Employee for a period of one year from the date of
termination. For purposes of this Agreement, "disability" is defined to mean
that, as a result of Employee's incapacity due to physical or mental illness:
a. Employee shall have been absent from his duties as an
officer of the Company on a substantially full-time basis for
three consecutive months; and
b. Within thirty (30) days after the Company notifies Employee in writing
that it intends to replace him, Employee shall not have returned to the
performance of his duties as an officer of the Company on a full-time basis.
10. Arbitration. In the event that one party alleges a breach or should seek
to enforce or interpret any provision contained herein (a "Dispute"), such
parties hereto shall select an arbitrator (the "Arbitrator") and shall subject
the Dispute to arbitration in accordance with the applicable Commercial
Arbitration Rules of the American Arbitration Association. The arbitration
procedures described herein shall take place in Atlanta, Georgia. The Arbitrator
shall submit a written report stating its decision and a reasonably detailed
description of its analysis and the factors that led to such decision to each
party within sixty (60) days after the appointment of the Arbitrator. This
arbitration result shall be final and binding on each the parties.
11. Costs of Arbitration or Suit. If arbitration or litigation
shall be brought in connection with a Dispute, each party shall
bear its own costs and expenses in prosecuting or defending such
action.
12. Noncompetition. The parties hereby acknowledge that the Company has a
legitimate business purpose protecting the Company's goodwill, that Employee
will be instrumental in generating goodwill for the Company, and that it is
reasonable and necessary for the Company under certain circumstances to restrict
competition by the Employee following termination of his employment under this
Agreement. Accordingly, during the term of this Agreement and for such
additional periods as may otherwise be set forth herein in reference to this
Paragraph 12, Employee shall not, without the Company's prior written consent,
by himself or in partnership or in
conjunction with or as an employee, officer, director, manager, consultant or
agent of any other person, firm, corporation or other entity, either directly or
indirectly, undertake or carry on or be engaged or have any financial or other
interest in, or in any other manner advise or assist any person, firm,
corporation or other entity engaged or interested in, any business, activity, or
enterprise which is similar to or competes with any aspect of the business
carried on by the Company, including, without limitation, any business engaged
in the business of (a) installing, testing and maintaining intelligent highway
and communication systems, including computerized traffic management systems,
wireless and fiber optic data networks, weather sensors, voice, data and video
systems, and (b) installing and maintaining industrial equipment and control
systems. For purposes of this Section 12, the term "Territory" shall mean the
states of Georgia, North Carolina, South Carolina, Tennessee, Florida, Alabama,
Mississippi, Ohio, Kentucky, Pennsylvania, New Jersey and Texas.
13. Nonsolicitation of Employees and Customers. At all times during
Employee's employment hereunder, or for such additional periods as may otherwise
be set forth in this Agreement in reference to this Paragraph 13, Employee shall
not, directly or indirectly, for himself or for any other person or entity (i)
attempt to employ, employ or enter into any contractual arrangement with any
employee or former employee of the Company or the Buyer unless such employee or
former employee has not been employed, by the Company, the Buyer or his
affiliates or predecessors in interest, for a period in excess of six months nor
(ii) call on or solicit any of the actual or targeted prospective Customers (as
4
hereafter defined) of the Company or the Buyer or his affiliates or predecessors
in interest with respect to any matters related to or competitive with the
business of the Company or the Buyer. For the purposes of this subsection, the
term "Customer" shall mean any individual or entity, or an affiliate,
subsidiary, or predecessor in interest thereof, for whom the Company (a)
installs, tests or maintains intelligent highway and communication systems,
including computerized traffic management systems, wireless and fiber optic data
networks, weather sensors, voice, data and video systems, or (b) installs and
maintains industrial equipment and control systems or to whom the Company sells
products of any sort or nature whatsoever during the term of Employee's
employment with the Company.
14. Confidentiality.
a. Nondisclosure. Employee acknowledges and agrees that the Confidential
Information (as defined below) is a valuable, special and unique asset of the
Company's business. Accord ingly, except in connection with the performance
of his duties hereunder, Employee shall not at any time during or subsequent
to the term of his employment hereunder disclose, directly or indirectly, to
any person or entity any proprietary or confidential information (including,
without limitation, any trade secrets, customer or supplier lists, pricing
information, marketing arrangements, or strategies, business plans, internal
performance statistics, training manuals, or other information concerning the
Company or its affiliates that is competitively sensitive or confidential,
other than such information as is publicly available from a source other than
Sellers, the Company or its officers and directors, and referred to herein
collec tively as "Confidential Information") relating to the Company or its
affiliates or subsidiaries; and Employee shall not, without the prior written
consent of Buyer, to disclose such information to anyone other than (i)
disclosure to Buyer and those designated by Buyer, and (ii) any disclosure
which is required by law.
b. Return of Confidential Information. Upon termination of Employee's
employment, for whatever reason and whether voluntary or involuntary, or at
any time at the request of the Company, Employee shall promptly return all
Confidential Information in the possession or under the control of Employee
to the Company and shall not retain any copies or other reproductions or
extracts thereof. Employee shall at any time at the request of the Company
destroy or have destroyed all memoranda, notes, reports, and documents,
whether in "hard copy" form or as stored on magnetic or other media, and all
copies and other reproduc tions and extracts thereof, prepared by Employee
and shall provide the Company with a certificate that the foregoing materials
have in fact been returned or destroyed.
c. Books and Records. All books, records and accounts whether prepared by
Employee or otherwise coming into Employee's possession, shall be the
exclusive property of the Company and shall be returned immediately to the
Company upon termination of Employee's employment hereunder or upon the
Company's request at any time.
15. Injunction/Specific Performance Setoff. Employee acknowledges that a
breach of any of the provisions of Paragraphs 12, 13, or 14 hereof would result
in immediate and irreparable injury to the Company which cannot be adequately or
reasonably compensated at law. Therefore, Employee agrees that the Company shall
be entitled, if any such breach shall occur or be threatened or attempted, to a
decree of specific performance and to a temporary and permanent injunction,
without the posting of a bond, enjoining and restraining such breach by Employee
or his agents,
5
either directly or indirectly, and that such right to injunction shall be
cumulative to whatever other remedies for actual damages to which the Company is
entitled. Employee further agrees that the Company may set off against or recoup
from any amounts due under this Agreement or any other Agreement to the extent
of any losses incurred by the Company as a result of any breach by Employee of
the provisions of Paragraphs 12, 13, or 14 hereof.
16. Severability. Any provision in this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
only to the extent of such prohibition or unenforceability without invalidating
or affecting the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
17. Successors. This Agreement shall be binding upon Employee and inure to
his and his estate's benefit, and shall be binding upon and inure to the benefit
of the Company and any permitted successor of the Company. Neither this
Agreement nor any rights arising hereunder may be assigned or pledged by:
Employee or anyone claiming through Employee; or by the Company, except to any
corporation which is the successor in interest to the Company by reason of a
merger, consolidation or sale of substantially all of the assets of the Company.
18. Controlling Law. This Agreement shall in all respects be
governed by, and construed in accordance with, the laws of the
State of Florida.
19. Notices. Any notice required or permitted to be given
hereunder shall be written and sent by registered or certified
mail, telecommunicated or hand delivered at the address set forth
herein or to any other address of which notice is given:
To the Company: Georgia Electric Company
c/o Able Telcom Holding Corp.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
To Employee: ▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
20. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto on the subject matter hereof
and may not be modified without the written agreement of both
parties hereto.
21. Waiver. A waiver by any party of any of the terms and
conditions hereof shall not be construed as a general waiver by
such party.
22. Counterparts. This Agreement may be executed in counter
parts, each of which shall be deemed an original and both of which
together shall constitute a single agreement.
23. Interpretation. In the event of a conflict between the
provisions of this Agreement and any other agreement or document
defining rights and duties of Employee or the Company upon
Employee's termination, the rights and duties set forth in this
Agreement shall control.
24. Survival. Notwithstanding the provisions of Paragraph 2,
the provisions of Paragraphs 10, 12, 13 and 14 shall survive the
expiration or early termination of this Agreement.
6
IN WITNESS WHEREOF, this Employment Agreement has been executed by the
parties as of the date first above written.
COMPANY:
Georgia Electric Company
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: Chairman
EMPLOYEE:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
7
ESCROW AGREEMENT
Dated: October 12, 1996
The parties to this agreement ("Agreement") are Traffic Management
Group, Inc., Inc., a Florida corporation and Able Telcom Holding Corp., a
Florida corporation (each a "Buyer" and collectively "Buyers"); ▇▇▇▇▇ ▇. ▇▇▇▇
and J. ▇▇▇▇▇ ▇▇▇▇ (each a "Seller" and collectively, "Sellers"); and Rock &
Leitz, P.C. (the "Escrow Agent").
Buyers and Sellers have entered into a Stock Purchase Agreement
dated as of October 12, 1996 (the "Stock Purchase Agreement"), a copy of which
is attached hereto as Exhibit A and incorporated herein by reference.
Accordingly, the parties agree as follows:
1. Appointment of Escrow Agent.
Buyers and Sellers appoint Rock & Leitz, P.C. as Escrow Agent, and
Rock & Leitz, P.C. accepts that appointment and agrees to hold and dispose of
the Escrow Shares in accordance with the terms of this Agreement.
2. The Escrow Documents
a. Pursuant to Section 3.3(a)(v) of the Stock Purchase Agreement,
Sellers have delivered to Escrow Agent, and the Escrow Agent
hereby acknowledges receipt of, the following (collectively
"Sellers' Docu ments") to be held in escrow in accordance with
the terms of this Agreement:
(i) Certificate No. 16 representing 450 shares of
common stock of Georgia Electric Company, a
Georgia corporation ("Georgia Electric"),
issued in the name of Traffic Management
Group, Inc. (such shares, together with all
dividends and other amounts from time to time
held by the Escrow Agent under this Agreement,
being referred to below as the "Escrow
Shares");
(ii) The Stock Purchase Agreement, duly executed by Sellers
and Georgia Electric, together with all Schedules and
Exhibits thereto as provided therein;
(iii) An Employment Agreement between Georgia
Electric and ▇▇▇▇▇ ▇. ▇▇▇▇, duly executed
by ▇▇▇▇▇ ▇. ▇▇▇▇;
(iv) An Employment Agreement between Transportation
Safety Contractors, Inc., a Florida corpora
tion ("TSC"), and J. ▇▇▇▇▇ ▇▇▇▇, duly executed
by J. ▇▇▇▇▇ ▇▇▇▇;
(v) Such other documents, instruments, and certificates as
may Buyer may have requested in accordance with the
Stock Purchase Agree ment and listed on Appendix A
hereto.
1
b. Pursuant to Section 3.3(b)(iii) of the Stock Purchase
Agreement, Buyers have delivered to Escrow Agent, and the
Escrow Agent hereby acknowledges receipt of a "Funding
Deposit" in the amount of $100,000, the following
(collectively, "Buyers' Documents") to be held in escrow in
accordance with the terms of this Agreement:
(i) The Stock Purchase Agreement, duly executed by Buyers,
together with all Schedules and Exhibits thereto as
provided therein;
(ii) An Employment Agreement between Georgia
Electric, a Florida corporation and ▇▇▇▇▇ ▇.
▇▇▇▇, duly executed by Georgia Electric;
(iii) An Employment Agreement between TSC and
J. ▇▇▇▇▇ ▇▇▇▇, duly executed by TSC;
(iv) Such other documents, instruments, and certificates as
may Sellers may have requested in accordance with the
Stock Purchase Agree ment and listed on Appendix B
hereto.
c. Certificates of the respective corporate secretar
ies of Buyers shall be delivered to the Escrow
Agent on or before the Funding Date.
3. Release of the Escrow Documents.
a. Funding Date.
(i) For purposes of this Agreement, the "Funding
Date" is October 31, 1996.
(ii) The Funding Date may be amended by Sellers to a later
date that Sellers may determine; provided that they
notify the Escrow Agent of
such change prior to 12:00 p.m. on the first
business day following the Funding Date.
b. Delivery of Escrow Documents. The Escrow Agent
shall deliver the Buyers' Documents and the Sellers' Documents
(collectively, the "Escrow Documents") as follows:
(i) If the Escrow Agent receives, on or before 12:00 p.m. on
the Funding Date, confirmation, either oral or written, by a duly
authorized representative of the Buyer's bank ("Buyer's Bank") of a
wire transfer, of the full amount of the Cash Consideration (less
the Funding Deposit) (as such term is defined in the Stock Purchase
Agreement), together with a Fed Wire confirmation number and ABA
routing number, for credit to the accounts of Sellers, then the
Escrow Agent shall promptly deliver to Buyers the Funding Deposit
and the Sellers' Documents listed in Paragraph 2.a, above and shall
promptly deliver to Sellers the Buyers' Documents listed in
Paragraph 2.b, above.
(ii) If the Escrow Agent fails to receive, on or
before 12:00 p.m. on the Funding Date, confirmation
described in Paragraph 3.b.(i) then the Escrow Agent
shall:
2
(a) Notify, promptly upon the opening of business on the
first business day following the Funding Date, both Sellers
and Buyers that no notification of the wiring of the Cash
Consider ation has been received by the Escrow Agent; and
(b) Promptly after 12:00 p.m. on the date following the
Funding Date, deliver to Sellers the Funding Deposit and the
Sellers' Documents listed in 2.a and deliver to Buyers the
Buyers' Documents listed in 2.b; provided however, if the
Sellers have amended the Funding Date as provided in Paragraph
3.a.(ii) within the time period set forth therein, then the
Escrow Agent shall retain both Buyers' Documents and Sellers'
Documents and shall consider Paragraph 3.a of this Agreement
to be amended to reflect such change (and in such case all
references herein to "Funding Date" shall refer to the Funding
Date as amended).
c. The Escrow Agent may at any time commence an action in the nature
of interpleader or other legal proceedings and may deposit the Escrow
Documents with the clerk of a court of competent jurisdiction.
d. Upon any delivery or deposit of the Escrow Documents
as provided in Paragraph 3.b, the Escrow Agent shall be
released and discharged from any further obligation under this
Agreement. Such delivery is referred to herein and in the
Stock Purchase Agreement as the "Closing of the Escrow."
4. Concerning the Escrow Agent
a. The Escrow Agent shall not have any liability to any of the
parties to this Agreement or to any third party arising out of its
services as Escrow Agent under this Agreement, except for damages directly
resulting from the Escrow Agent's gross negligence or willful misconduct.
b. Buyer and Sellers jointly and severally shall indemnify the
Escrow Agent and hold it harmless against any loss, liability, damage or
expense (including reasonable attorneys' fees) that the Escrow Agent may
incur as a result of acting as escrow agent under this Agreement, except
for any loss, liability, damage or expense arising from its own gross
negligence or willful misconduct. For this purpose, the term "attorneys'
fees" includes fees payable to any counsel retained by the Escrow Agent in
connection with its services under this Agreement and, with respect to any
matter arising under this Agreement as to which the Escrow Agent performs
legal services, its standard hourly rates and charges then in effect.
c. The Escrow Agent shall be entitled to rely upon any judgment,
notice, instrument or other writing delivered to it under this Agreement
without being required to determine the authenticity of, or the
correctness of any fact stated in, that document and irrespective of any
facts the Escrow Agent may know or be deemed to know in any other
capacity. The Escrow Agent may act in reliance upon any instrument or
signature believed by it to be genuine and may assume that any person
purporting to give any notice or receipt or advice or make any statement
or execute any document in connection with this Agreement has been duly
authorized to do so.
d. The Escrow Agent shall have no duties or responsi bilities except
those expressly set forth in this Agreement. The Escrow Agent shall not
have any obligations arising out of or be bound by the provisions of any
other agreement, written or oral, including, but not limited to, the Stock
Purchase Agreement.
3
e. Buyers each acknowledge that the Escrow Agent has represented
Sellers in connection with the Stock Purchase Agreement and this Agreement
and that it may continue to represent Sellers in that connection and in
connection with the transactions contemplated by those agreements,
including, but not limited to, in connection with any disputes that may
arise under either of those agreements. The Escrow Agent shall not be
precluded from or restricted from representing Buyer or otherwise acting
as attorneys for Sellers in any matter, including, but not limited to, any
court proceeding or
other matter related to the Stock Purchase Agreement or the transactions
contemplated by the Stock Purchase Agreement, or this Agreement or the
Escrow Documents, whether or not there is a dispute between Buyers and
Sellers with respect to any such matter. Buyers each irrevocably consent
to any such representation and waives any conflict or appearance of
conflict with respect to any such representation.
f. All of the Escrow Agent's rights of indemnification provided for
in this agreement shall survive the resignation of the Escrow Agent, its
replacement by a successor Escrow Agent, its delivery or deposit of the
Escrow Documents in accordance with this Agreement, the termination of
this Agreement, and any other event that occurs after this date.
g. The Escrow Agent shall have no responsibility with respect to the
sufficiency of the arrangements contemplated by this Escrow Agreement to
accomplish the intentions of the parties.
h. The Escrow Agent shall have not laibility to any of the parties
hto this Agreement, or to third parties, as a result of any act or omission to
act taken on reliance upon the written advice of its counsel.
5. Representations.
Buyers and Sellers each represent and warrant to the Escrow Agent
that it or he, as the case may be, has full power and authority to enter into
and perform this Agreement; that in the case of Buyer the execution and delivery
of this Agreement was duly authorized by all necessary corporate action; and
that this Agreement is enforceable against each of them in accordance with its
terms.
6. Resignation; Successor Escrow Agent.
The Escrow Agent (and any successor escrow agent) may at any time
resign as such upon 15 days' prior notice to each of the other parties. Upon
receipt of a notice of resignation, each of the other parties shall use their
best efforts to select a successor agent within 30 days, but if within that 30
day period the Escrow Agent has not received a notice signed by both of them
appointing a successor escrow agent and setting forth its name and address, the
Escrow Agent may (but shall not be obligated to) select on their behalf a bank
or trust company to act as successor escrow agent, for such compensation as that
bank or trust company customarily charges and on such terms and conditions not
inconsistent with this Agreement as that bank or trust company reasonably
requires. The fees and charges of any successor escrow agent shall be borne
equally by the parties but, in default of which, shall be payable out of the
Escrow Documents. A successor escrow agent selected by the resigning Escrow
Agent may become the Escrow Agent by confirming in writing its acceptance of the
4
position. Buyer and Sellers each shall sign such other documents as the
successor escrow agent reasonably requests in connection with its appointment,
and each of them hereby irrevocably appoints the Escrow Agent as its
attorney-in-fact to sign all such documents in its name and place. The Escrow
Agent may deliver the Escrow Documents to the successor escrow agent selected
pursuant to this provision and, upon such delivery, the successor escrow agent
shall become the Escrow Agent for all purposes under this Agreement and shall
have all of the rights and obligations of the Escrow Agent under this Agreement
and the resigning Escrow Agent shall have no further responsibilities or
obligations under this Agreement.
7. Notices.
All notices, instructions, objections or other communications under
this Agreement shall be in writing and shall be deemed given when sent by United
States registered mail, return receipt requested, to the respective parties at
the following addresses (or at such other address as a party may specify by
notice given in accordance with this paragraph):
If to Buyers, to it at:
Able Telcom Holding Corp.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
with a copy to:
Holland & Knight
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
If to Sellers, to them at:
Georgia Electric Company
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇, Esq.
Rock & Leitz, P.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to the Escrow Agent:
▇▇▇▇▇ ▇▇▇▇▇, Esq.
Rock & Leitz, P.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
8. Miscellaneous.
a. Escrow Agent shall be reumerated by Buyers for its
services hereunder at tis normal hourly rate, not to exceed a total
fee of $750.
5
b. If any provision of this Agreement is determined by any court of
competent jurisdiction to be invalid or unenforceable in any jurisdiction the
remaining provisions of this Agreement shall not be affected thereby, and the
invalidity or unenforceability in any jurisdiction shall not invalidate or
render unenforceable that provision in any other jurisdiction. It is understood,
however, that the parties intend each provision of this Agreement to be valid
and enforceable and each of them waives all rights to object to any provision of
this Agreement.
c. This Agreement shall be binding upon and inure solely to the
benefit of the parties and their respective successors and permitted assigns,
and shall not be enforceable by or inure to the benefit of any third party. No
party may assign its rights or obligations under this Agreement or any interest
in the Escrow Documents without the written consent of the other parties, and
any other purported assignment shall be void. In no event shall the Escrow Agent
be required to act upon, or be bound by, any notice, instruction, objection or
other communication given by a person other than, nor shall the Escrow Agent be
required to deliver the Escrow Documents to any person other than, Buyer or
Sellers.
d. This Agreement shall be governed by and construed in accordance
with the law of the State of Georgia applicable to agreements made and to be
performed in Georgia (without resort to conflicts of law principles).
e. The courts of Georgia and the United States District Courts for
Georgia shall have exclusive jurisdiction over the parties (and the subject
matter) with respect to any dispute or controversy arising under or in
connection with this Agreement. A summons or complaint or other process in any
such action or proceeding served by mail in accordance with section 6 of this
Agreement or in such other manner as may be permitted by law shall be valid and
sufficient service.
f. This Agreement contains a complete statement of all of the
arrangements among the parties with respect to its subject matter and cannot be
changed or terminated orally. Any waiver must be in writing.
g. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and
all of which taken together shall constitute one and the same
instrument.
h. The section headings used herein are for convenience of reference
only and shall not affect the construction or interpretation of this Agreement.
6
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
Buyers:
TRAFFIC MANAGEMENT GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
Name:▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:President
ABLE TELCOM HOLDING CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
Name:▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:President
Sellers:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇
/s/ J. ▇▇▇▇▇ ▇▇▇▇
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J. ▇▇▇▇▇ ▇▇▇▇
Escrow Agent:
Rock & Leitz, P.C.
-----------------------------
By: Rock & Leitz, P.C.
7
Exhibit 3.3(a)(i)
October 12, 1996
Traffic Management Group, Inc.
Able Telcom Holding Corp.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Re: Georgia Electric Company
Gentlemen:
We have acted as special counsel to Georgia Electric Company, a
Georgia corporation (the "Company"), and ▇▇▇▇▇ ▇. ▇▇▇▇ and J. ▇▇▇▇▇ ▇▇▇▇, the
sole shareholders of the Company (each a "Seller" and collectively, the
"Sellers"), in connection with the sale of the Stock pursuant to the Stock
Purchase Agreement dated as of October __ 1996 (the "Agreement") between the
Company, the Sellers and Traffic Management Group, Inc., a Florida corporation
("Buyer"), which is a wholly owned subsidiary of Able Telcom Holding Corp. This
opinion letter is provided to you at the request of the Sellers pursuant to
Section 3.3(a)(i) of the Agreement. Except as otherwise indicated herein,
capitalized terms used in this opinion letter are defined as set forth in the
Agreement
As to various questions of fact material to this opinion, we have
relied upon the represen tations made in the Agreement and certificates of
public officials and representatives of the Company, corporate documents and
records, a Certificate of Seller, a copy of which is attached hereto as Exhibit
A, and have made such other investigations, as we have deemed necessary in order
to give the opinions hereinafter set forth. We have assumed the authenticity of
all documents submitted to us as originals, the genuineness of all signatures,
the legal capacity of natural persons and the conformity to the originals of all
documents submitted to us as copies. We have also assumed that all documents
examined by us have been duly and validly authorized, executed and delivered by,
and are legally valid and binding on and enforceable against, each of the
parties thereto other than the Buyers.
When reference is made in this opinion to our "knowledge" of certain
matters or to matters "known to us," it means the actual present knowledge and
conscious awareness of such matters by the attor neys at our firm directly
involved in the represen tation of the Sellers in respect of the transac tions
contemplated by the Agreement, which knowl edge was communicated to or obtained
by such attorneys solely in their capacity as attorneys, without any independent
investigation by us.
Based upon the foregoing, and subject to the foregoing, we are of
the opinion that:
1
Traffic Management Group, Inc.
Able Telcom Holding Corp.
October 19, 1996
Page 2
1. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Georgia.
2. The Company has all requisite corporate power and authority to own,
operate and lease its properties and assets, to conduct its business as it is
now being conducted, to execute, deliver and perform its obligations under the
Agreement and to consummate the transactions contemplated thereby.
3. The authorized capital stock of the Company consists solely of 2,500
shares of common stock, $100 par value per share, of which 450 shares (the
"Shares") are issued and outstanding. No shares of capital stock are held in the
Com pany's treasury. All of the Shares are validly issued, fully paid and
nonassessable, were not issued in violation of the terms of any agreement or
other understanding, and were issued in compli ance with all applicable federal
and state securi ties or "blue sky" laws and regulations.
4. To our knowledge, there are no existing options, warrants, calls,
commitments or other agreements requiring the issuance or sale of any additional
shares of stock or other securities of the Company, and to our knowledge, there
are not share of stock or other securities of the Company that are reserved for
issuance or sale for any
purpose. To our knowledge, there are not agree ments, commitments or
restrictions related to ownership or voting of any shares of stock or other
securities of the Company.
5. Each of the Sellers:
a. is the holder of record, as shown on
the Company's stock transfer records, of 225 shares
of the Stock,
b. to our knowledge owns all of such
Shares free and clear of all Encumbrances, and upon
delivery of the Shares hereunder. To our knowledge
Buyer will acquire title thereto, free and clear of
any and all Encumbrances.
c. has the legal capacity to own and hold the Shares and to execute,
deliver and perform their respective obligations under this Agreement and to
consummate the transactions contemplated hereby, and the instruments executed
pursuant thereto are effective to transfer to the Purchaser all right, title and
interest in and to the shares.
d. The Agreement and the Sellers' Documents have been duly executed
and delivered by the Company and the Sellers, are valid and binding upon the
Company and the Sellers and are enforce able, in accordance with their
respective terms, against the Company and the Sellers except to the extent that
2
Traffic Management Group, Inc.
Able Telcom Holding Corp.
October 19, 1996
Page 3
enforcement thereof may be limited by applicable bankruptcy, reorganization,
insolvency or moratorium laws, or other laws affecting the enforcement of
creditors' rights or by the princi ples governing the availability of equitable
remedies.
e. The execution and delivery of the Agreement and the Sellers'
Documents by the Sellers and the Company do not, and the consummation of the
transactions contemplated thereby will not, violate or conflict with any
provision of the Company's Articles of Incorporation or Bylaws or, to our
knowledge, conflict with or result in any breach of any contract or agreement to
which the Company or Seller is a party or by which the Company or the Seller is
bound or to which the properties or assets of either of them are subject or
violate, or result in a breach of or conflict with, or, require any notice,
filing or consent under, any statute, rule, regulation or other provision of law
or to our knowledge, any order, judgment or other direction of any court or
other tribunal or any other governmental requirement, permit, registra tion,
license or other authorization applicable to Sellers or the Company, or any of
their assets or business.
f. To our knowledge, there is no litigation, proceeding or
investigation pending, threatened or proposed in any manner involving the
Sellers or the Company or any of the properties or assets of the Company or
which questions the validity of the Agreement or any action taken or to be taken
by the Sellers under the Agreement.
The opinions set forth herein are limited to the laws of the United States
and the State of Georgia. No opinion is expressed as to the laws of any other
jurisdiction or the effect which the laws of any other jurisdiction might have
on the subject matter of the opinions expressed herein under conflict of laws
principles or otherwise.
This opinion is rendered to you and is solely for your benefit in
connection with the above transaction. This opinion may not be relied upon by
you for any other purpose or furnished to, quoted or relied upon by any other
person, firm or corporation for any purpose without our prior written consent.
Very truly yours,
3
Traffic Management Group, Inc.
Able Telcom Holding Corp.
October 19, 1996
Page 1
Exhibit 3.3(b)(i)
October 12, ▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Messrs. Hall and Hall:
We have acted as counsel to Traffic Management Group, Inc. and Able Telcom
Holding Corp., each a Florida corporation (the "Buyers"), in connection with the
purchase of all of the outstanding common stock (the "Stock") of Georgia
Electric Company, a Georgia corporation (the "Company") pursuant to that certain
Stock Purchase Agreement, dated as of October 12, 1996, as amended (the
"Agreement"), among you, the Company and the Buyers. This opinion is given
pursuant to Section 3.3(b)(i) of the Agreement. (Capitalized terms used herein
without definition have the same meaning herein as in the Agreement.)
As to various questions of fact material to this opinion, we have relied
upon the representa tions made in the Agreement and certificates of public
officials and representatives of the Buyers, corporate documents and records,
and have made such other investigations, as we have deemed necessary in order to
give the opinions hereinafter set forth. We have assumed the authenticity of all
documents submitted to us as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
documents submitted to us as copies. We have also assumed that all documents
examined by us have been duly and validly autho rized, executed and delivered
by, and are legally valid and binding on and enforceable against, each of the
parties thereto other than the Buyers.
When reference is made in this opinion to our "knowledge" of certain
matters or to matters "known to us," it means the actual present knowledge and
conscious awareness of such matters by the attor neys at our firm directly
involved in the represen tation of the Buyers in respect of the transactions
contemplated by the Agreement, which knowledge was communicated to or obtained
by such attorneys solely in their capacity as attorneys, without any independent
investigation by us.
Based on the foregoing and subject to the qualifications and assumptions
set forth herein, we give you our opinion as follows:
1
▇▇▇▇▇ ▇. ▇▇▇▇ and J. ▇▇▇▇▇ ▇▇▇▇
October 12, 1996
Page 2
g. Each Buyer is a corporation validly existing and in good standing under
the laws of the state of Florida. Each Buyer has all requisite corporate power
and authority to own, operate and lease its properties and assets, and to
conduct its business as it is now being conducted.
2. Each of the Buyers has the full right, corporate power and authority to
enter into and perform the Agreement and all other agreements, notes,
certificates, exhibits, schedules and documents executed or delivered or to be
executed or delivered by such Buyer in connection with the Agreement
(collectively, with the Agreement, "Buy ers' Documents"). The execution,
delivery, and performance by the Buyers of Buyers' Documents have been duly and
validly authorized and approved by all necessary corporate action of the Buyers.
The Agreement has been duly executed and delivered by Buyers, and Buyers'
Documents are legal, valid, and binding obligations of the Buyers, enforceable
in accordance with their respective terms, subject to bankruptcy,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and that the availability of equitable remedies,
whether sought in a proceeding at law or in equity, may be subject to the
discretion of the court in which any action is brought.
3. The authorization, execution, delivery,
and performance of Buyers' Documents and the con
summation of the transactions contemplated hereby
and thereby do not and will not (1) violate any of the provisions of the
Articles of Incorporation or By-Laws of either Buyer, (2) to our knowledge, with
or without the passage of time or both, violate, conflict with, result in a
breach of or constitute a default under, require any notice or consent under,
give rise to a right of termination of, or accelerate the performance required
by, any terms or provisions of any agreement, instrument or writing known to us
to which either Buyer is a party or is bound or any of its assets or business is
subject, or (3) violate, conflict with or result in a breach of, or require any
notice, filing or consent under, any statute, rule, regulation or other
provision of law, or, to our knowledge, any order, judgment or other direction
of a court or other tribunal, or any other governmental require ment, permit,
registration, license, or authori zation applicable to either Buyer.
4. To our knowledge, there is no litigation, proceeding or investigation
pending, threatened or proposed in any manner involving Buyers or any of the
properties or assets of Buyers which questions the validity of the Agreement or
any action taken or to be taken by Buyers under the Agreement.
5. The Stock Consideration, if and when issued in accordance with the
terms of the Agree ment, will be validly issued, fully paid, and nonassessable.
2
▇▇▇▇▇ ▇. ▇▇▇▇ and J. ▇▇▇▇▇ ▇▇▇▇
October 12, 1996
Page 3
For purposes of our opinions herein, we have assumed that Florida law
(excluding conflicts of laws provisions thereof) applies to and governs the
Agreement and the other Buyer's Documents.
The opinions set forth herein are limited to the laws of the United States
and the State of Florida. No opinion is expressed as to the laws of any other
jurisdiction or the effect which the laws of any other jurisdiction might have
on the subject matter of the opinions expressed herein under conflict of laws
principles or otherwise.
This opinion is rendered to you and is solely for your benefit in
connection with the above transaction. This opinion may not be relied upon by
you for any other purpose or furnished to, quoted or relied upon by any other
person, firm or corporation for any purpose without our prior written consent.
Very truly yours,
Holland & Knight
3