EXHIBIT 2.4
FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT
THIS FIRST AMENDMENT, dated October 21, 1998 ("Amendment"), to the Stock
Purchase Agreement (the "Original Agreement"), dated June 12, 1998, among
Nationwide Electric, Inc., a Delaware corporation ("NEI"), The ▇▇▇▇▇▇▇ Company,
a Georgia corporation (the "Company"), the shareholders of the Company
("Shareholders"), and ▇▇▇▇▇▇▇-▇▇▇▇▇ Company, a Georgia corporation (the
"Operating Company") (capitalized terms used herein and not otherwise defined
shall have the meanings ascribed to them in the Original Agreement).
WHEREAS, NEI has determined not to conduct an Initial Public Offering of
its common stock at this time; and
WHEREAS, notwithstanding the decision not to proceed with such offering at
this time, the parties to the Original Agreement desire to proceed with the
closing of the exchange of Company Stock for cash and stock of NEI in accordance
with the terms and conditions of the Original Agreement as amended by this
Amendment; and
WHEREAS, in lieu of such offering, NEI has determined to conduct a private
offering of its securities, a portion of the proceeds of which will be used to
provide cash necessary to consummate the transactions contemplated by the NEI
Plan of Organization.
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements herein contained, the parties hereto,
intending to be legally bound hereby, agree to amend the Agreement as follows:
1. Amendment to Article I. Article I of the Agreement is hereby amended
as follows:
(a) The following shall be added to such Article I:
"Private Offering Memorandum" shall mean the private offering
memorandum, dated September 29, 1998, prepared by NEI in connection with
the offering of capital stock of NEI in an offering which will be exempt
from the registration requirements of the 1933 Act, as it may be amended to
reflect (i) negotiations between the proposed purchasers of such stock, and
(ii) the termination of the Asset Purchase Agreement, dated June 2, 1998,
between NEI, Potter Electric Company and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
"Purchasers" shall mean the prospective purchasers of stock of NEI
offered pursuant to the Private Offering Memorandum.
"Series B Convertible Preferred Stock" shall mean the Series B
Convertible Preferred Stock, par value $.01 per share, of NEI.
"Series C Convertible Preferred Stock" shall mean the Series C
Convertible Preferred Stock, par value $.01 per share, of NEI.
(b) All references to the "Registration Statement" and/or the
"Prospectus" (except as either of those terms may be used in the Agreement
without initial capital letters) shall be deleted and replaced by the
"Private Offering Memorandum." All references to "▇▇▇▇▇▇▇-▇▇▇▇▇ Electric
Company, Inc." shall refer to ▇▇▇▇▇▇▇-▇▇▇▇▇ Company, a Georgia corporation.
(c) The following definitions set forth in the Original Agreement
shall be deleted in their entirety and the following definitions shall be
substituted in lieu thereof:
"Other Founding Company" shall mean Henderson Electric Company, Inc.,
a Kentucky corporation.
"NEI Plan of Organization" shall mean the acquisition or merger of the
Founding Companies by or into NEI or its subsidiaries.
(d) The following definitions set forth in the Original Agreement
shall be deleted in their entirety: "Effective Date," "IPO," "Pricing,"
"Prospectus," "Registration Statement" and "Underwriters."
2. Amendment to Section 2.2. Section 2.2 of the Agreement is amended by
deleting the first sentence of Section 2.2 of the Original Agreement in its
entirety and substituting in lieu thereof the following sentence:
The aggregate Purchase Price to be received by the Shareholders in exchange
for the Company Stock shall consist of cash and shares of NEI Stock
determined in accordance with SCHEDULE 2.2 attached hereto; provided,
however, that the actual number of shares of NEI Stock shall be based upon
a value of $12.00 per share of NEI Stock, rounded up to the nearest whole
share; provided, further, that if the price per share in NEI's next round
of financing (which is a bona fide third party transaction involving the
sale of securities for aggregate consideration in excess of $1,000,000)
subsequent to the private placement to Kansas City Power & Light Company or
its affiliates in which it acquired 500,000 shares of Series B Preferred
Stock and 1,000,000 shares of Class B Nonvoting Common Stock at a price of
$12.00 per share (with certain ratchet protections substantially similar to
those provided for in this Section 2.2), whether in a private placement or
an initial public offering (the "Price") is less than $12.00 per share,
then an additional number of shares shall be issued to the Shareholders, in
the same proportions set forth above, as if such Price had been used in
making the computation in the immediately preceding clause, less the number
of shares of NEI Stock issued at the Closing.
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3. Amendment to Section 2.3. Section 2.3 of the Agreement is amended by
deleting the clause "which may be prior or subsequent to the Pricing," in the
first sentence of Section 2.3 of the Original Agreement.
4. Amendment to Section 2.4. Section 2.4 of the Agreement is amended by
deleting the clause "which shall be not later than 15 days after the closing of
the IPO," in the first sentence of Section 2.4 of the Original Agreement and
substituting therefor "which shall occur not later than 15 days following the
date of the Amendments.
5. Deletion of Section 2.5. Section 2.5 of the Original Agreement is
deleted in its entirety.
6. Amendment to Section 3.23.2. Section 3.23.2 of the Agreement is
amended by deleting the first sentence of Section 3.23.2 of the Original
Agreement in its entirety and substituting in lieu thereof the following
sentence:
If, prior to the Closing Date, the Company or the Operating Company or any
Shareholder becomes aware of any fact or circumstance which would affect in
any material respect the accuracy of a representation or warranty of the
Company or the Operating Company or the Shareholders in this Agreement or a
representation or disclosure with respect to the Company or the Operating
Company or the Shareholders in the Private Offering Memorandum, the
Company, the Operating Company and the Shareholders shall immediately give
notice of such fact or circumstance to NEI.
7. Amendment to Section 3.24. Section 3.24 of the Agreement is amended by
deleting the first sentence of Section 3.24 of the Original Agreement in its
entirety and substituting in lieu thereof the following sentence:
3.24 Acknowledgment. The Shareholders acknowledge and agree: (a)
that there exists no firm commitment, binding agreement or promise of any
kind, express or implied, that the offering described in the Private
Offering Memorandum will be consummated; (b) that neither NEI or any of its
officers, directors, agents or representatives nor any Purchasers shall
have any liability to the Company, the Operating Company, the Shareholders
or any other Person for any failure of the private offering described in
the Private Offering Memorandum to be consummated or the failure of NEI to
sell its securities in such offering at a particular price or within a
particular range of prices or to occur at all; (c) that NEI has not
committed to pay any dividends on the NEI Stock and that, in all
likelihood, no dividends will be paid on the NEI Stock in the foreseeable
future; (d) that there is no guaranty the NEI Stock will appreciate or not
depreciate in value, that an active market will exist for the NEI Stock, or
that the Shareholders will be able in the future to sell their NEI Stock at
a price equal to or greater than the offering price described in the
Private Offering Memorandum; and (e) that the decision of the Shareholders
to enter into this Agreement and to exchange the Company
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Stock for NEI Stock and cash has been made independent of, and without
reliance upon, any statements, opinions, communications or due diligence
investigations made or performed by any Purchasers.
8. Amendment to Section 4.3. Section 4.3 of the Agreement is hereby
amended by deleting the first sentence of Section 4.3 of the Original Agreement
in its entirety and substituting in lieu thereof the following sentence:
The authorized capital stock of NEI consists of (a) 30,000,000 shares of
voting common stock, par value $.01 per share, (b) 1,200,000 shares of
Class A Nonvoting Common Stock, par value $.01 per share, (c) 1,250,000
shares of Class B Nonvoting Common Stock, par value $.01 per share, and (d)
10,000,000 shares of Preferred Stock, par value $.01 per share, of which
6,000 shares have been designated Series A Nonvoting Convertible Preferred
Stock, 1,000,000 shares have been designated Series B Convertible Preferred
Stock and 1,000,000 shares have been designated Series C Convertible
Preferred Stock, and all such shares are free and clear of all liens,
security interests, pledges, charges, voting trusts, restrictions,
encumbrances and claims of every kind.
9. Amendment to Section 4.4. Section 4.4 of the Agreement is hereby
amended by deleting Section 4.4 set forth in the Original Agreement in its
entirety and substituting in lieu thereof the following new Section 4.4:
4.4 Transactions in Capital Stock. Except (i) for the Other
Agreements and the rights and privileges associated with the 6,000 shares
of Series A Nonvoting Convertible Preferred Stock, the 500,000 shares of
Series B Preferred Stock, 1,089,999 shares of Class A Nonvoting Common
Stock and 1,000,000 shares of Class B Nonvoting Common Stock issued to KLT
Energy Services, Inc., (ii) for the shares of Series C Preferred Stock
available for issuance upon exchange of NEI Stock being offered to the
shareholders of the Founding Companies, (iii) as contemplated by the
Private Offering Memorandum, including, without limitation, the grant and
exercise of options to employees of NEI and its subsidiaries, and (iv) in
connection with any future acquisitions, mergers or financings which may be
conducted by NEI or its subsidiaries: (a) there are no options, warrants,
calls, conversion rights or commitments of any kind which obligate NEI to
issue any of its authorized but unissued capital stock; and (b) NEI has no
obligation (contingent or otherwise) to purchase, redeem or otherwise
acquire any of its securities or any interest therein or to pay any
dividend or make any distribution in respect thereof.
10. Amendment to Section 4.8.3. Section 4.8.3 of the Agreement is hereby
amended by deleting clauses (a) and (b) and the words "and (c)" of Section 4.8.3
set forth in the Original Agreement in their entirety.
11. Deletion of Section 4.13. Section 4.13 of the Original Agreement is
deleted in its entirety.
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12. Amendment to Section 5.1. Section 5.1 of the Agreement is hereby
amended by deleting Section 5.1 set forth in the Original Agreement in its
entirety and substituting in lieu thereof the following new Section 5.1:
5.1 Access. Shareholders, the Company and the Operating Company
shall permit NEI and its representatives and the Purchasers and their
representatives to perform such reasonable inspections, investigations and
due diligence with respect to the Company and the Operating Company and
their respective assets, business and financial condition as NEI or the
Purchasers reasonably deem advisable. Shareholders, the Company and the
Operating Company shall provide NEI and its representatives and the
Purchasers and their representatives full access to and an opportunity to
inspect all properties, facilities, books, records, accounts, contracts and
documents of the Company and the Operating Company, and shall make
themselves, their counsel and the officers and employees of the Company and
the Operating Company reasonably available to NEI and its representatives
and the Purchasers and their representatives and otherwise cooperate with
NEI's and the Purchasers' due diligence investigations. Shareholders and
the Company shall furnish NEI and its representatives and the Purchasers
and their representatives all information with respect to the business and
affairs of the Company and the Operating Company as any such persons may
reasonably request. Shareholders, the Company and the Operating Company
shall permit NEI and its representatives and the Purchasers and their
representatives to have access to other third parties, including
contractors, suppliers and bankers with which the Company or the Operating
Company does business, as reasonably required for verification of any
information obtained by NEI or the Purchasers during their due diligence
investigation. Shareholders and the Company shall permit NEI to conduct
appraisals of the Operating Company's equipment and/or real estate at NEI's
expense. NEI will provide prior notice to and will coordinate such due
diligence investigations with Shareholders to avoid disruption or undue
interference with the operations of the Operating Company or relations with
customers or other third parties. Shareholders shall deliver to NEI copies
of all environmental audits, risk assessments and other investigations
performed with respect to the Operating Company or its assets at any time
prior to the Closing Date. Notwithstanding the foregoing, the
representations and warranties in Article III shall not be affected by any
due diligence investigation conducted by NEI, the Purchasers or their
respective representatives.
13. Amendment to Section 5.16. Section 5.16 of the Agreement is hereby
amended by deleting Section 5.16 set forth in the Original Agreement in its
entirety and substituting in lieu thereof the following new Section 5.16:
5.16 Cooperation in Preparation of Private Offering Memorandum. The
Company, the Operating Company and the Shareholders shall furnish or cause
to be furnished to NEI all information concerning the Company, the
Operating Company and the Shareholders required for inclusion in, and will
cooperate in all reasonable respects with NEI in the preparation of, the
Private Offering Memorandum (including audited and
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unaudited historical and pro forma financial statements prepared in
accordance with GAAP, in form suitable for inclusion in the Private
Offering Memorandum). The disclosure of information with respect to the
Company, the Operating Company and the Shareholders in the Private Offering
Memorandum and in the conduct of the offering described therein shall not
constitute a violation of any confidentiality agreement, including Section
11.2 of this Agreement, among the parties hereto. All information and
disclosures provided by Shareholders, the Operating Company or the Company
in accordance with this Section 5.16 shall be subject to the provisions of
Sections 3.23, 3.24 and 3.26 hereof. The Company, the Operating Company and
the Shareholder Representative agree promptly to advise NEI if at any time
prior to the Closing Date they discover that any information contained in
the Private Offering Memorandum concerning the Company, the Operating
Company or the Shareholders becomes inaccurate or incomplete in any
material respect, and to provide the information needed to correct any such
inaccuracy. NEI shall reimburse Shareholders for any legal and accounting
fees incurred by them in performing the covenants in this Section 5.16, up
to a maximum aggregate reimbursement of $2,000.
14. Amendment to Section 5.17. Section 5.17 of the Agreement is hereby
amended by deleting Section 5.17 set forth in the Original Agreement in its
entirety and substituting in lieu thereof the following new Section 5.17:
5.17 Authorized Capital. Prior to the Closing Date, NEI shall
maintain its authorized capital stock as set forth in Section 4.3 hereof.
15. Amendment to Section 6.3. Section 6.3 of the Agreement is hereby
amended by deleting Section 6.3 set forth in the Original Agreement in its
entirety and substituting in lieu thereof the following new Section 6.3:
6.3 No Litigation. No action or proceeding before any court or
governmental agency shall have been instituted or threatened to restrain or
prohibit the purchase and sale of the Company Stock or the private offering
described in the Private Offering Memorandum.
16. Deletion of Section 6.5. Section 6.5 of the Original Agreement is
deleted in its entirety.
17. Amendment to Section 6.7. Section 6.7 of the Agreement is hereby
amended by deleting Section 6.7 set forth in the Original Agreement in its
entirety and substituting in lieu thereof the following new Section 6.7:
6.7 Opinion of Counsel. Shareholders shall have received from NEI's
counsel a written opinion, dated as of the Closing Date, in substantially
the form attached hereto as Schedule 6.7.
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18. Amendment to Section 6.8. Section 6.8 of the Agreement is hereby
amended by deleting Section 6.8 set forth in the Original Agreement in its
entirety and substituting in lieu thereof the following new Section 6.8:
6.8 No Material Adverse Change. There shall not have been any
material adverse change in the business or financial condition of NEI on a
consolidated basis from that reflected in the Private Offering Memorandum,
and the closing of Other Agreement with the Other Founding Company shall
have occurred, or shall occur simultaneously with Closing of this
Agreement.
19. Amendment to Section 7.8. Section 7.8 of the Agreement is hereby
amended by deleting Section 7.8 set forth in the Original Agreement in its
entirety and substituting in lieu thereof the following new Section 7.8:
7.8 Opinion of Counsel. NEI shall have received from Shareholders'
counsel a written opinion, dated as of the Closing Date, in substantially
the form attached hereto as Schedule 7.8.
20. Amendment to Section 7.11. Section 7.11 of the Agreement is hereby
amended by deleting Section 7.11 set forth in the Original Agreement in its
entirety and substituting in lieu thereof the following new Section 7.11:
7.11 No Litigation. No action or proceeding before any court or
governmental agency shall have been instituted or threatened to restrain or
prohibit the purchase and sale of the Company Stock.
21. Amendment to Section 7.14. Section 7.14 of the Agreement is hereby
amended by deleting Section 7.14 set forth in the Original Agreement in its
entirety and substituting in lieu thereof the following new Section 7.14:
7.14 Other Founding Company. NEI shall have entered into the Other
Agreement with the Other Founding Company and the closing of Other
Agreement with the Other Founding Company shall have occurred, or shall
occur simultaneously with Closing of this Agreement.
22. Deletion of Section 7.16. Section 7.16 of the Original Agreement is
deleted in its entirety.
23. New Section 8.6. The Agreement is amended by adding the following new
Section 8.6:
8.6 Exchange Right. If on or before December 31, 1999, NEI has not
consummated an initial public offering of its NEI Stock, the Shareholders
shall have the
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right to exchange their shares of NEI Stock received pursuant to this
Agreement for an equal number of shares of Series C Convertible Preferred
Stock upon the surrender to NEI of the certificates evidencing such shares
of NEI Stock endorsed in blank. Upon receipt of such certificates from a
Shareholder endorsed in blank, NEI shall promptly deliver to such
Shareholder a certificate evidencing an equal number of shares of Series C
Convertible Preferred Stock. Upon issuance, all shares of Series C
Convertible Preferred Stock will be duly authorized, validly issued, fully
paid and nonassessable and will be offered and issued by NEI in compliance
with all applicable securities laws.
24. Amendment to Section 9.1. Clause (c) of the first sentence of Section
9.1 of the Agreement is hereby amended by deleting such clause in the Original
Agreement in its entirety and substituting in lieu thereof the following new
clause (c) to the first sentence of Section 9.1:
(c) any liability under the 1933 Act, the 1934 Act or other federal or
state law or regulation, at common law or otherwise, arising out of or
based upon any untrue statement or alleged untrue statement of material
fact relating to the Company or the Operating Company or the Shareholders
which was based upon information provided to NEI or its counsel by the
Company or the Operating Company or the Shareholders and contained in the
Private Offering Memorandum, or arising out of or based upon any omission
or alleged omission to state therein a material fact relating to the
Company or the Operating Company or the Shareholders required to be stated
therein or necessary to make the statements therein not misleading;
provided, that such indemnity shall not inure to the benefit of NEI to the
extent such untrue statement (or alleged untrue statement) was made in, or
omission (or alleged omission) occurred in, any preliminary draft of the
Private Offering Memorandum and the Shareholders provided written corrected
information to NEI for inclusion in the final Private Offering Memorandum
and such information was not so included, and provided further, that no
Shareholder shall be liable for any indemnification pursuant to this
Section 9.1(c) to the extent solely attributable to a breach of any
representation, warranty or agreement made by any other Shareholder;
25. Amendment to Section 9.2. Clause (c) of the first sentence of Section
9.2 of the Agreement is hereby amended by deleting such clause in the Original
Agreement in its entirety and substituting in lieu thereof the following new
clause (c) to the first sentence of Section 9.2:
(c) any liability under the 1933 Act, the 1934 Act or other federal or
state law or regulation, at common law or otherwise arising in connection
with the Other Agreements, or arising out of or based upon any untrue
statement or alleged untrue statement of material fact relating to NEI or
any of the Other Founding Companies contained in the Private Offering
Memorandum or arising out of or based upon any omission or alleged omission
to state therein a material fact relating to NEI or any of the Other
Founding Companies required to be stated
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therein or necessary to make the statements therein not misleading, except
to the extent such statement or omission relates to the Company, the
Operating Company or the Shareholders;
26. Amendment to Section 10.1. Section 10.1 of the Agreement is hereby
amended by deleting Section 10.1 set forth in the Original Agreement in its
entirety and substituting in lieu thereof the following new Section 10.1:
10.1 Termination. This Agreement may be terminated at any time prior
to the Closing Date, but only:
10.1.1 By the mutual written consent of NEI and the
Shareholders;
10.1.2 By the Shareholders if this transaction shall not have
Closed by January 22, 1999, for any reason other than failure of the
Shareholders to satisfy any of the conditions in Article VII which are
within their control;
10.1.3 By the Shareholders, the Company and the Operating
Company if the applicable conditions set forth in Article VI hereof
have not been satisfied or waived by January 22, 1999;
10.1.4 By NEI if the applicable conditions set forth in Article
VII hereof have not been satisfied or waived by January 22, 1999; or
10.1.5 By NEI if NEI in its sole discretion elects not to
consummate the securities offering described in the Private Offering
Memorandum or if NEI in its sole discretion elects not to proceed with
the NEI Plan of Organization.
27. Amendment to Section 11.2.1. Section 11.2.1 of the Agreement is
hereby amended by deleting Section 11.2.1 set forth in the Original Agreement in
its entirety and substituting in lieu thereof the following new Section 11.2.1:
11.2.1 Shareholders jointly and severally agree that they shall not
disclose to any Person (other than NEI and its representatives and the
Purchasers and their representatives) nor use for any purpose (other than
in connection with the offering described in the Private Offering
Memorandum or the conduct of the Operating Company's business prior to the
Closing Date or pursuant to any subpoena or order of any court or
administrative agency) any confidential information, trade secrets,
customer lists, price lists, bids, technical know-how or other confidential
or proprietary information of or with respect to the Company or the
Operating Company, whether or not marked or specifically identified as
confidential.
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28. Amendment to Section 14.1. Section 14.1 of the Agreement is amended
by adding the following clause (c) to the end of the first sentence of Section
14.1 of the Original Agreement:
or, (c) a registration statement filed with the SEC pursuant to the 1933
Act in connection with NEI's initial public offering.
29. Amendment to Section 14.6.1. Section 14.6.1 of the Agreement is
hereby amended by deleting Section 14.6.1 set forth in the Original Agreement in
its entirety and substituting in lieu thereof the following new Section 14.6.1:
14.6.1 Make current public information regarding NEI available as
contemplated in Rule 144 under the 1933 Act for a period of five years
beginning 90 days following the effective date of the registration
statement filed with the SEC pursuant to the 1933 Act in connection with
NEI's initial public offering.
30. Amendment to Section 15.3. The addresses and facsimile numbers for
notice pursuant to Section 15.3 of the Agreement for NEI are amended in their
entirety by substituting in the following addresses and facsimile numbers:
If to NEI: Nationwide Electric, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: President
with a copy to: ▇▇▇▇▇▇▇, Mag & Fizzell, P.C.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
31. Amendment to Section 15.12. Section 15.12 of the Agreement is hereby
amended by adding the following subsection (f) to the end of Section 15.12 of
the Original Agreement:
(f) NEI covenants and agrees to cause one or more of the following
events to occur as NEI shall determine: (1) the continuation and
maintenance of the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Company Profit Sharing Plan (the "Plan")
in full force and effect for the benefit of participants who shall include
the current participants in the Plan during the period described in the
following sentence; (2) the merger of the assets of the Plan into another
plan (the "Successor Plan") intended to be qualified under Section 401(a)
of the Internal Revenue Code, which shall include the current participants
in the Plan as participants in the Successor Plan; or (3) the termination
of the Plan with the option being given to all participants who are current
participants in the Plan to direct the transfer of their account balances
to another plan (the
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"Transfer Plan") intended to be qualified under Section 401(a) of the
Internal Revenue Code. NEI further covenants and agrees to keep the Plan or
the Successor Plan or the Transfer Plan in effect as long as any of the
Shareholders remain employed by NEI or any of its affiliates.
32. Amendment to Schedules. Schedule 2.2 of the Agreement is hereby
amended by deleting Schedule 2.2 attached to the Original Agreement in its
entirety and substituting in lieu thereof the new Schedule 2.2 attached hereto.
Schedules 6.7 and 7.4 attached hereto are added to the Agreement.
33. Full Force and Effect. All provisions of the Original Agreement not
specifically affected by this Amendment shall remain in full force and effect
without alteration or modification. Sections of the Original Agreement which are
deleted by this Amendment shall remain intentionally omitted and no renumbering
of subsequent Section headings shall be made.
34. Counterparts. This Amendment may be executed in counterparts, each of
which shall be deemed an original and all of which, taken together, shall
constitute a single instrument.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
set forth above.
NATIONWIDE ELECTRIC, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Title: Chairman of the Board
----------------------------------
"NEI"
SHAREHOLDERS: THE ▇▇▇▇▇▇▇ COMPANY
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------ ----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Title: President
----------------------------------
The "Company"
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇ COMPANY
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------ ----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ Title: President
----------------------------------
The "Operating Company"
The ▇▇▇▇▇▇▇-▇▇▇▇▇ Company Profit
Sharing Trust Segregated Accounts
F/B/O ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
and ▇▇▇▇▇ ▇▇▇▇▇▇
By: Compass Bank, Trustee
By: /s/ ▇▇▇ ▇▇▇▇▇
---------------------------------
Title: Vice President
------------------------------
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SCHEDULE 2.2
PURCHASE PRICE
--------------
TOTAL PURCHASE PRICE DUE AT CLOSING/(1)/ $15,585,000
Cash 65%
NEI Stock 35%
ASSETS TO BE RETAINED All furniture and office furnishings in
BY SHAREHOLDERS ▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ individual office
LIABILITIES TO BE
LIQUIDATED BY
SHAREHOLDERS PRIOR
TO THE CLOSING DATE None
The Purchase Price shall be allocated amongst the Shareholders as follows:
Number
Total Cash of Shares Stock Basket
----- ---- --------- ----- ------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ $4,200,157.50 $4,095,153.56 0 $ 0 $105,003.94
▇▇▇▇▇ ▇▇▇▇▇▇ 900,033.75 877,532.91 0 0 22,500.84
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 900,033.75 877,532.91 0 0 22,500.84
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Segregated Account 6,709,342.50 2,723,268.94 318,195 3,818,340 167,733.56
▇▇▇▇▇ ▇▇▇▇▇▇ Segregated Account 1,437,716.25 583,565.34 68,184 818,208 35,942.91
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Segregated Account 1,437,716.25 583,565.34 68,184 818,208 35,942.91
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Segregated Account will not share in the
Earnout.
--------------------------
/(1)/ In addition to the cash portion of the Purchase Price payable at
Closing, NEI agrees to pay to the Shareholders as additional Purchase Price, in
cash, an earnout amount (the "Earnout") equal to 25% of the amount by which the
consolidated EBIT of the Company (without taking into effect any overhead or
other costs attributable to NEI or any Other Founding Company) for each of the
fiscal years ending March 31, 1999 and 2000 (each, an "Earnout Period") exceeds
$2,500,000. For purposes of this provision, "consolidated" shall mean the
Company and the Operating Company only. The Earnout, if any, shall be paid by
wire transfer to the account or accounts designated by the Shareholder
Representative, not later than 15 business days after NEI's independent
certified public accountants shall have delivered to NEI, with a copy to the
Shareholder Representative, the audited consolidated financial statements of the
Company for each fiscal year during the Earnout Period. For purposes of
computing the Earnout, NEI shall maintain separate consolidated books and
records for the Company and the Operating Company or the Division corresponding
thereto.
